IRS to refund money due to gas prices: who will benefit?

Gasoline prices are skyrocketing. The national average price per gallon is well above $5.00 due to serious supply chain problems, which have been exacerbated by the Biden administration's decision to incentivize green energy. Under these measures, which discourage domestic production and investment, the U.S. has gone from being the world’s leading oil producer and exporter under the Trump administration to being dependent on foreign oil.  

The rise in the price of gasoline has directly hit the pockets of Americans and has caused a significant increase in the price of food and products. The official inflation rate is 8.7, but for consumers the prices feel much higher. 

To help Americans through these hard times, the IRS announced that it will reimburse some taxpayers for their use of gasoline.

"In response to rising fuel prices, the IRS will adjust its mileage rates for drivers to help taxpayers, businesses, and others,” Commissioner Chuck Rettig said in a statement.

During the last six months of 2022, the standard rate per mile for business travel is estimated to cost 62.5 cents per mile, 4 cents more than the rate in effect at the beginning of the year. The new rate for deductible medical or moving expenses—available to active duty members of the armed forces—will be 22 cents for the remainder of 2022, 4 cents more than the rate in effect at the beginning of 2022. 

This relief will be for those who use their automobile as a means of commuting to work. The new rates will be effective July 1, 2022.

The optional standard business mileage rate is used to calculate the deductible costs of operating an automobile for business uses rather than tracking its actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

Taxpayers always have the option to calculate the actual costs of using their vehicle instead of using standard per-mile rates.

The rate of 14 cents per mile for charitable organizations will remain unchanged. 

Mid-year increases in optional millage rates are rare, the last time the IRS made such an increase was in 2011.