(NewsGlobal.com)- Even the IRS has noticed $5-a-gallon gas prices and higher.
IRS Commissioner Chuck Rettig said adjusting standard mileage rates considers rising fuel prices.
“We’re aware of unusual fuel cost issues,” Rettig stated.
We have issues.
The IRS will raise the optional business mileage rate to 62.5 cents per mile from 58.5 cents per mile. Summer gas prices are soaring.
AAA Michigan reports that Michigan drivers pay $5.22 per gallon for regular, up 87.2 cents from a month ago. AAA’s average gallon price is $5.014. This week’s average in Michigan is $2.05 more than a year ago when it was $3.17.
According to the BLS, gasoline prices rose 48.7% through May.
The federal government and many businesses use the IRS standard mileage rate to reimburse employees for mileage charges. This new bargain won’t help everyone or cover daily commute costs, but each four-cent save adds up.
The higher rate starting July 1 will assist employees in covering increasing gas expenses, auto insurance, repairs, and the growing cost of buying or leasing a car or truck due to the microprocessor shortage.
The Tax Cuts and Jobs Act, in effect through 2025, prohibits using the IRS business standard mileage rate to deduct unreimbursed employee travel expenditures.
Self-employed taxpayers using Schedule C can deduct business mileage at the regular rate. The exact vehicle can only use the standard mileage rate or the business part of actual expenses.
Instead of typical mileage rates, taxpayers might use a more sophisticated approach to compute vehicle costs. Not all firms reimburse mileage at 62.5 cents a gallon.
Mark Steber, chief tax officer at Jackson Hewitt Tax Service, said companies aren’t compelled to reimburse based on the federal mileage rate. Some disagree. Higher rates increase a company’s expenses.
The new IRS rate for deductible medical expenses is 22 cents per mile, up 4 cents.
Active-duty military members who move due to a permanent change of station can deduct 22 cents per mile.
Under the Tax Cuts and Jobs Act, taxpayers can’t deduct moving mileage.
The statute sets the IRS rate for charitable mileage at 14 cents per mile.
Different situations change mileage rates.
We have a “situation.”