By now, we have all taken notice to the increase in gas prices. Let’s be honest, gas prices have skyrocketed. Thankfully, the IRS has taken notice and acted on this issue.

Effective July 1st the mileage rate is now 62.5 cents per mile, up 4 cents from 2021.

To break this down into dollars, let’s say you have business miles of 5,500 from July 1^st– December 31^st. That equates to a tax deduction of $3,437.50!  

5,500 miles x .625 = $3,437.50

Pretty simple, right? Yes, but keep reading…

Mileage Deduction- Record Keeping

Now, if you want to take advantage of the new mileage rate, make sure to keep good records of your business miles driven. The IRS requires written support for the deduction. I.E They want to know where you went, when you went, and why!

The good thing is there’s “an app for that”! Actually, there are a few apps to help you and/or your employees track mileage. Below are some of the apps we recommend.

• QuickBooks Self Employed
• MileIQ
• Everlance

If you do not want to use an app, you can manually track mileage via a mileage log.

What should be included in your mileage log? Glad you asked.

• Date
• Business miles driven
• From/To
• Purpose of Trip
• Odometer reading at start and end of year

See below for an example.

Hope this helps! Don’t miss out on the mileage deduction. If you have any additional questions, feel free to leave a comment or e-mail us info@jclynchcpa.com