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Posted by rohit on June 1, 2024 at 7:13am 0 Comments 0 Likes
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What is the IRS Mileage Rate for 2021, 2022
As we approach the end of 2021, the likelihood of the IRS boosting the standard mileage rate for 2022 becomes more plausible. We're reading the tea leaves of 2022 to see what the next year has in store for us to help you prepare yourself — and your wallet — for next year.
What Factors Affect the IRS Mileage Rate?
The IRS calculates the standard mileage rate each year by analyzing how much it costs to buy and operate an automobile in the United States. The IRS mileage rate is sometimes misunderstood as being linked to petrol costs. While gas prices are clearly a factor, a company mileage study of what it truly costs to buy and run a vehicle found that fuel prices account for just 30% of the total cost. Depreciation accounts for the lion's share of automobile ownership expenditures, accounting for 45 percent. Other expenses include insurance (12%), licenses, registration, and taxes (7%), tires (3%) and maintenance (3%). (3 percent).
All of these various fees start to mount up for automobile owners. According to AAA's Your Operating Costs study, the national average cost of owning and driving a car will be $9666 in 2021, up from $9561 in 2020 and $9282 in 2019. While these figures cannot be directly compared owing to AAA altering its approach this year, they still indicate an upward trend in car expenses. With growing inflation and supply chain disruptions, 2022 is shaping up to be a costly year for owning and operating a gasoline or electric car in the United States.
Insurance Rates Will Rise Due to Rising Maintenance Costs
According to S&P Global Market Intelligence's annual US Auto Insurance Market Report, the prices of repairing and replacing automobiles are rising quickly as a result of a variety of factors such as labor shortages, supply chain disruptions, and inflation. The underwriting profit margins of insurance firms will be severely reduced as a result of this. Insurance firms are anticipated to raise their prices in response.
This is a trend that we are already experiencing. According to Quadrant Information Services, the average vehicle insurance premium for a good driver with excellent credit in 2021 is $1,592, up from $1,555 in 2020. Prepare for an increase in personal insurance rates in 2022. Personal car direct premiums will rise from 3.1 percent in 2021 to 5.4 percent in 2022, according to S&P's research.
Gas prices will also continue to rise.
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