With average retail gas prices in the U.S. soaring from an average of $3.24 per gallon in January to $5.10 in recent weeks, the cost of sending drive-in attendees to regional meetings and conferences is way up. But there’s a minor of reprieve coming Friday.
On July 1, the Internal Revenue Service will raise the rate used to calculate the deductible costs of operating a car, van, or pickup truck for business purposes to 62.5 cents per mile. Many companies use this IRS rate to calculate reimbursements for employees who use personal vehicles for business. The four-cents-per-mile increase will be in effect through the rest of the year.
The IRS typically updates the standard mileage rate annually but made this mid-year adjustment in recognition of rapid price hikes. The last time the agency made a mid-year adjustment was in 2011.
“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” said IRS Commissioner Chuck Rettig. “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses, and others who use this rate.”