By Stacey J. Gorowitz, CPA, MBA
Each year, the Internal Revenue Service (IRS) sets standard mileage rates for business based on an annual study of fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil.
Beginning on January 1, 2020, the standard mileage rates for the business use of a car, van, pickup or panel truck are:
- 57.5 cents per mile for business miles driven, down one-half cent from 2019
- 17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019
- 14 cents per mile driven in service of charitable organizations, the same as 2019
Here are a few things to keep in mind when considering whether deductions apply to you:
- Business miles are miles you’ve driven specifically for business.
- Business miles are NOT miles driven between home and your workplace. Those are commuting miles and are not deductible.
It is important to note that under the Tax Cuts and Jobs Act (TCJA), taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station.
If you plan to claim a deduction for the business use of a vehicle, you must keep a detailed record or log of business miles driven in order to substantiate your deduction.
For additional information on the IRS standard mileage rates announced for 2020, please click here.
If you have questions about mileage reimbursement or any other tax matter that affects your business, please contact S.J. Gorowitz Accounting & Tax Services, P.C. at any time for more information and assistance.