Select Page
Dealing With The New 62.5 Cents Mileage Rate

Due to rising gas prices, the Internal Revenue Service (IRS) announced an increase in the standard mileage rate for business travel. As a result, small businesses that make use of the standard mile rates can deduct 62.5 cents per mile for business mileage. 

This is effective from July 1 to December 31, 2022. It is a 4-cent increase from 58.5 cents, which was the rate at the beginning of the year. 

So, how do you calculate your business mileage deduction with these changes? 

Three-Month Sample Basics 

Basics of the three-month test: 

  • The taxpayer must use their vehicle for business use. 
  • The taxpayer and their family use the vehicle for personal use. 
  • The taxpayer keeps a mileage log for the first three months showing they use the vehicle 75 percent of the time for business. 
  • Can produce receipts of paid bills and invoices showing that the vehicle use is about the same throughout the year. 

Per the IRS regulation, the three-month sample is sufficient to for this taxpayer to prove their 75 percent business use.  

How The IRS Calculates the Three-Month Sample


While you use the vehicle for business purposes, you and your family also use it for personal use. You must keep a mileage log to record all your trips and destinations. Let’s say, from the mileage log of the first three months of the year, it is seen that your business use is 75% of the time. Your bills and invoices must show the same use throughout the year. 

Therefore, the three-month sample can be used to prove a business mileage of 75%. 

It is important for you to note that although the sample is exact for three months, it is not exact for the entire year. Therefore, you must prove that it can be used to calculate the business mileage rate for the year.  

Using The Sample Method For The New Mileage Rate 

If your three-month sample is accurate, you can use it to calculate your business mileage deduction for the whole year. All you have to do is apply the old rate of 58.5 cents to half of the mileage, and 62.5 cents to the second half. 

For example, based on your three-month sample, you drove a total of 30,000 miles for business for the year. This will give you a deduction of $18,150 (15,000 × 58.5 cents + 15,000 × 62.5 cents). 

What If I Have a Mileage Record for The Whole Year? 

If you kept a mileage record for the entire year, then there is no problem. In fact, this is the what the IRS prefers. You would have to kept track of every mile you traveled each day for business and personal use. 

Medical and Moving Mileage Rate 

In addition to the mileage rates for business travel, the rate of medical and moving travel also 

increased. The standard mileage rate for medical and moving travel is now 22 cents per mile. This is 4 cents increase from the old rate of 18 cents per mile. 

Charitable Mileage Rate 

It is the duty of the IRS to update the standard mileage rates for business, medical, and moving travel. In response to the high gas prices, the IRS increased the mileage rates. 

However, Congress is in charge of updating the charitable standard mileage rate. But they have made no changes to the mileage rate for charitable purposes despite the gas prices. It remains unchanged and stays at 14 cents per mile. 

Summary of the Changes in Mileage Rates for 2022 
Purpose  January – June  July – December 
Business  58.5  62.5 
Medical or Moving  18  22 
Charitable  14  14 

If you’d like further guidance with this new change, feel free to call us at 281-440-6279 and speak with one of our tax advisors. We love to educate our clients about tax laws and keep you up to date on how to save the most money on your taxes. 

The Molen & Associates Difference

Mike Forsyth

“Super helpful and timely. This is our first year with them and we look forward to trusting them with our taxes and business books for years to come.”

Caitlin Daulong

“Molen & Associates is amazing! They run an incredibly streamlined process, which makes filing taxes a breeze. So impressed with their attention to detail, organization, and swift execution every year. Cannot recommend them enough!”

Sy Sahrai

“I’ve been with Mr. Molen’s company for few years and I felt treated like family respect and dignity. They are caring, professional and honest, which hard to find these days. Love working with them.”

Shielding Your Business: The Power of IRS Representation in Tax Matters

Tax matters can be a labyrinth of complexities, especially for small business owners juggling a multitude of responsibilities. The mere thought of facing the Internal Revenue Service (IRS) can send shivers down the spine. But fear not – there's a potent guardian in...

Corporate Transparency Act – Beneficial Ownership Reporting: Are You Prepared?

he Corporate Transparency Act (CTA), enacted as part of the Anti-Money Laundering Act of 2020, introduces significant changes in beneficial ownership reporting requirements for certain entities operating in the United States. These regulations, set to take effect on...

The IRS is Cracking Down on S-Corp Salaries: How To Your Reasonable Compensation is Safe

The IRS is turning its attention to S-Corporations (S-Corps) and the salaries paid to shareholder-employees. Ensuring that you are paying yourself a "reasonable compensation" is crucial to staying compliant with the law and avoiding potential financial consequences....

Should You Be Making Quarterly Payments?

Tackling your taxes as a small business owner can often feel like a high-stakes game of strategy and a little guesswork. One of the key moves in this intricate game is mastering the art of quarterly tax payments. If you're looking to stay ahead in the tax arena and...

Slash Your Self-Employment Tax

Hey there, hardworking small business owners! Tax season is no walk in the park, but we've got a game-changing secret to share that could put more money back in your pocket. If you're tired of paying hefty self-employment taxes and want to keep more of your...

How Tax Planning Can Help You Grow, Preserve and Protect Your Wealth

Tax planning services from Molen & Associates help you make smart decisions regarding your taxes. We provide individualized advice and information that can save you money and protect your wealth. Our tax planning strategies go beyond just filing your taxes – we...

Why a Local Family Tax Firm is Your Best Co-Pilot in Space City!

Howdy, Houston small business owners! Tax time can be a real whirlwind, but fear not – we've got your back! When it comes to saving time, money, and headaches on your taxes, partnering with a local family tax firm can be the ultimate secret weapon. In this article,...

Uncovering the Top 5 Deductions to Save Time, Money, and Stress!

Howdy, fellow Houstonians! As small business owners in the heart of Texas, we know that taxes can be a daunting and complex puzzle to solve. But fret not, because today, we're here to equip you with some mighty tax hacks that will not only save you time and money but...

Streamline Your Finances with Molen & Associates: The Power of Corporate Accounting

In the fast-paced corporate world, managing finances with precision and expertise is paramount for the success of any business. Corporate accounting plays a vital role in ensuring that financial records are accurate, compliant, and capable of driving informed...

Mastering Your Numbers: The Secret to Small Business Tax Triumph!

Hey there, fellow small business owners! As entrepreneurs, we know that taxes can be a bit overwhelming, especially when you're trying to run a successful business. But fear not – we're here to equip you with the ultimate tax-saving superpower: mastering your numbers!...

Request an Appointment Today

11 + 4 =

Call us at

Pin It on Pinterest

Share This