The IRS noticed that average gas prices across the United States exceeded $5.00 a gallon and took action with higher deductible IRS gas mileage rates!
Small businesses that qualify to use and do use the standard mileage rate can deduct 62.5 cents per business mile from July 1 through December 31, 2022. That’s up 4 cents a mile.
This brings up a practical question: what do you do if you track business mileage using the three-month sample method?
Three-Month Sample Basics
As a reminder, here are the basics of how the IRS describes the three-month test:
- The taxpayer uses her vehicle for business use.
- She and other members of her family use the vehicle for personal use.
- The taxpayer keeps a mileage log for the first three months of the taxable year, showing that she uses the vehicle 75 percent of the time for business.
- Invoices and paid bills show that her vehicle use is about the same throughout the year.
According to this IRS regulation, her three-month sample is adequate for this taxpayer to prove her 75 percent business use.