The Internal Revenue Service is raising the standard mileage rate used to calculate tax-deductible business trips because of soaring gasoline prices.
The agency announced a four-cent increase to 62.5 cents per mile, or about 6.8%, in response to the rising prices. Annual inflation ticked upward slightly in May, rising to an annual rate of 8.6% — a 40-year high — largely driven by more prices of food, fuel and housing.
The new rate takes effect July 1.
The IRS typically only updates its mileage rate once per year in the fall for the following calendar year but made an exception.