By The Center Square
The optional standard rate for deductible costs for operating an automobile for business will increase to 65.5 cents per mile in 2023, a 3-cent increase from the current rate, according to the IRS.
The new rates begin Jan. 1 and apply to electric and hybrid-electric vehicles, gasoline, and diesel-powered vehicles, according to an IRS news release.
The IRS has increased the deductible costs for automobiles on business from 53.5 cents in 2017 to 58 cents in 2019. The IRS set the rate at 58.5 cents a mile in January 2022 and then upped it 4 more cents in June 2022 with a mid-year increase.
The IRS said the mid-year increase in June was in recognition of the gasoline price increases. The U.S. average price of a gallon of gas rose to $4.92 per gallon in June, the highest average ever in the U.S. according to the U.S. Energy Information Administration.
The average price of a gallon of gas dropped from $4.92 in June to $3.20 in December, the lowest since Oct. 2021.
By Tom Gantert