Mileage Rates for 2023: 63.5 Cents (Business) and 14 Cents (Medical)

Mileage reimbursement rates are set by the Internal Revenue Service (IRS) each year. These rates are used to calculate the deductible expenses for business and medical travel. For 2023, the business mileage rate is 63.5 cents per mile, and the medical mileage rate is 14 cents per mile.

Why are mileage rates important?

Mileage rates are important because they allow you to deduct the cost of your travel expenses from your taxes. This can save you a significant amount of money, especially if you drive a lot for business or medical purposes.

How to calculate your mileage deduction

To calculate your mileage deduction, you will need to keep track of the following information:

• The date of each trip
• The starting and ending mileage for each trip
• The purpose of each trip
• The total number of miles driven for business or medical purposes

Once you have this information, you can multiply the total number of miles driven by the applicable mileage rate. This will give you the amount of your mileage deduction.

Tips for maximizing your mileage deduction

There are a few things you can do to maximize your mileage deduction:

• Keep a detailed mileage log. This log should include the information listed above.
• Use a mileage tracking app. There are a number of mileage tracking apps available that can make it easy to keep track of your mileage.
• Get a written statement from your employer. If you are reimbursed for your mileage by your employer, you will need to get a written statement from your employer that includes the following information:
  • The amount of the reimbursement
  • The period of time covered by the reimbursement
  • The purpose of the travel

Common mistakes to avoid

There are a few common mistakes that people make when calculating their mileage deduction:

• Using the wrong mileage rate. The mileage rate for business travel is different from the mileage rate for medical travel. Be sure to use the correct mileage rate for your travel expenses.
• Not keeping track of your mileage. If you do not keep track of your mileage, you will not be able to claim a mileage deduction.
• Mixing business and personal travel. If you use your car for both business and personal purposes, you will need to separate the mileage for each type of travel.

Conclusion

Mileage rates are an important part of tax deductions. By understanding the mileage rates and how to calculate your mileage deduction, you can save money on your taxes.