Jhe subject of gasoline prices has dominated the headlines over the past year. After two years of confinement imposed by the COVID, United States locals were looking forward to some form of normalcy returning in 2022.
This has however been far from the case as the country is experiencing a cost of living crisis. While the blockages have contributed to supply chain shortages, the biggest issue has been the sanctioning of Russian oil imports following the country’s invasion of Ukraine.
The sanctions saw gasoline prices hit record highs in June last year as the Federal Reserve was forced to implement a series of interest rate hikes to curb inflation.
Although this has somewhat stabilized the rapid growth of inflation, Americans across the country are still paying more for gasoline than before the pandemic.
In response to the rising gas prices that have plagued America in the first half of 2022, the IRS has decided to increase the standard mileage rate by four cents, which means that the current mileage for the self-employed is 62.5 cents.
What is the standard mileage rate?
As determined by the Department of Tax Services (IRS), the standard mileage rate allows self-employed individuals to deduct a certain amount of tax for each mile of business travel taken.
Why did the IRS increase the standard mileage rate in June 2022?
The IRS increased the standard mileage rate in June to help ease the financial burden on residents of the country.
“The IRS is adjusting standard mileage rates to better reflect recent increases in fuel prices,” the IRS commissioner said. chuck rettig said in an official press release at the time of the increase.
“We are aware that a number of unusual factors have come into play regarding fuel costs, and we are taking this special action to help taxpayers, businesses and others who use this rate.”
What will be the standard kilometer rate for 2023?
The IRS is expected to make an announcement shortly on the mileage rate for 2023.
However, since gasoline prices are falling rapidly, it is fair to assume that the mileage rate will remain constant in 2023.