The annual update for tax-related automobile mileage rates for 2023 was published by the IRS in Notice 2023-03.[1]

Standard Mileage Rates

The standard mileage rate for 2023 is 65.5 cents per mile for business use (business standard mileage rate).[2]

The standard rate in 2023 for mileage incurred rendering gratuitous services to a charity under IRC §170 is 14 cents per mile.[3]

The standard mileage rate for 2023 is 22 cents per mile for:

• Medical care described in IRC §213 or

• As part of a move for which the expenses are deductible under IRC §217(g) (members of the Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station).[4]

Basis Reduction Amount

The IRS has also announced the basis reduction amounts for automobiles used for business purposes where the optional standard mileage rate is used:

For automobiles a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation is 26 cents per mile for 2019, 27 cents per mile for 2020, 26 cents per mile for 2021, 26 cents per mile for 2022, and 28 cents per mile for 2023. See section 4.04 of Rev. Proc. 2019-46.[5]

Maximum Standard Automobile Cost Under a Fixed and Variable Rate Plan (FAVR)

The notice also provides the 2023 maximum standard automobile cost under a FAVR plan:

For purposes of computing the allowance under a FAVR plan, the standard automobile cost may not exceed $60,800 for automobiles (including trucks and vans). See section 6.02(6) of Rev. Proc. 2019-46.[6]

Maximum Value of Employer-Provided Automobiles for the Fleet-Average Valuation Rule and the Vehicle Cents-per-Mile Valuation Rule

Finally, the Notice provides the maximum value of employer provided automobiles for the fleet-average valuation rule and the vehicle cents-per-mile valuation rule:

For purposes of the fleet-average valuation rule in § 1.61-21(d)(5)(v) and the vehicle cents-per-mile valuation rule in § 1.61-21(e), the maximum FMV of automobiles (including trucks and vans) first made available to employees in calendar year 2023 is $60,800.[7]

[1] Notice 2023-03, December 29, 2023, https://www.irs.gov/pub/irs-drop/n-23-03.pdf (retrieved December 29, 2022)

[2] Notice 2023-03, December 29, 2023, Section 3

[3] Notice 2023-03, December 29, 2023, Section 3

[4] Notice 2023-03, December 29, 2023, Section 3

[5] Notice 2023-03, December 29, 2023, Section 4

[6] Notice 2023-03, December 29, 2023, Section 5

[7] Notice 2023-03, December 29, 2023, Section 6