2023 Standard Mileage Rates Released, Notice 2023-3

The IRS released the optional standard mileage rates for 2023. Most taxpayers may use these rates to compute deductible costs of operating vehicles for business, medical, and charitable purposes. Some members of the military may also use these rates to compute their moving expense deductions.

2023 Standard Mileage Rates

The standard mileage rates for 2023 are:

• 65.5 cents per mile for business uses;
• 22 cents per mile for medical uses; and
• 14 cents per mile for charitable uses.

Taxpayers may use these rates, instead of their actual expenses, to calculate their deductions for business, medical, or charitable use of their own vehicles.

FAVR Allowance for 2023

For purposes of the fixed and variable rate (FAVR) allowance, the maximum standard automobile cost for vehicles places in service after 2021 is:

• $60,800 for passenger automobiles, and
• $60,800 for trucks and vans.

Employers can use a FAVR allowance to reimburse employees who use their own vehicles for the employer’s business.

2023 Mileage Rate for Moving Expenses

The standard mileage rate for the moving expense deduction is 22 cents per mile. To claim this deduction, the taxpayer must be a member of the Armed Forces of the United States, on active military duty, and moving under an military order and incident to a permanent change of station. The Tax Cuts and Jobs Act of 2017 suspended the moving expense deduction for all other taxpayers until 2026.

Unreimbursed Employee Travel Expenses

For most taxpayers, the Tax Cuts and Jobs Act suspended the miscellaneous itemized deduction for unreimbursed employee travel expenses. However, certain taxpayers may still claim an above-the-line deduction for these expenses. These taxpayers include members of a reserve component of the U.S. Armed Forces, state or local government officials paid on a fee basis, and performing artists with relatively low incomes.

Notice 2022-3, I.R.B. 2021-2, is superseded.