Understanding the Current Mileage Rate for 2023
Calculating your mileage deduction accurately is essential for maximizing your tax savings or employee reimbursement. For the 2023 tax year, the Internal Revenue Service (IRS) adjusted the standard mileage rates to account for inflation and fuel costs. Our Current Mileage Rate 2023 Calculator helps you instantly estimate your deduction value based on the official rates.
Official 2023 IRS Standard Mileage Rates
The IRS set the standard mileage rates for 2023 (effective January 1, 2023) as follows. These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
| Purpose | Rate per Mile |
|---|---|
| Business Use | 65.5 cents |
| Medical & Moving* | 22 cents |
| Charitable | 14 cents |
*Note: The moving deduction is currently only available for active-duty members of the Armed Forces pursuant to a permanent change of station.
How to Calculate Your 2023 Mileage Deduction
To calculate your deduction manually, the formula is straightforward: (Total Business Miles × Rate) + Parking/Tolls.
For example, if you drove 1,000 miles for business in 2023, your calculation would look like this:
- Step 1: 1,000 miles × $0.655 (Business Rate) = $655.00
- Step 2: Add any direct costs like parking or tolls (e.g., $50.00).
- Total Deduction: $705.00
Record Keeping Requirements
Simply knowing the rate is not enough; the IRS requires substantiation for your mileage log. To ensure your deduction stands up to an audit, your mileage log should include:
- The date of the trip.
- The starting point and destination.
- The business purpose of the trip.
- The total mileage driven.
- Odometer readings (start and end) for the tax year.
Business vs. Medical vs. Charitable Miles
It is crucial to categorize your trips correctly. Business miles are driven in the course of your trade or profession. Commuting from your home to your regular place of work is generally not deductible. Medical miles cover transportation primarily for and essential to medical care. Charitable miles are driven in service of a qualified charitable organization.