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How is mileage reimbursement calculated in 2023?

The standard mileage rate for transportation or travel expenses is 65.5 cents per mile for all miles of business use (business standard mileage rate).



For the 2023 tax year, the IRS standard mileage reimbursement rate was set at 65.5 cents per mile for business use. This was a significant increase from previous years to account for rising fuel and vehicle maintenance costs. To calculate your total reimbursement, you simply multiply the total number of qualified business miles driven by 0.655. For example, if you drove 100 miles for work purposes, your reimbursement would be $65.50. This rate is intended to cover all costs of operating a vehicle, including gas, oil, tires, insurance, and depreciation. For medical or moving purposes for qualified active-duty service members, the 2023 rate was 22 cents per mile, and for charitable service, it remained at 14 cents per mile. It is a peer-to-peer best practice to keep a detailed "mileage log" that includes the date, destination, and business purpose of each trip to ensure your reimbursement is non-taxable and defensible in an audit.

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The IRS considers business mileage as any driving done solely for business purposes. For example, driving out of the office to meet clients, get supplies, or run other business errands. Note that commuting between your home and your place of work is not considered business mileage.

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