IRS Update: 2020 Mileage Rates

The Internal Revenue Services (IRS) recently released updated optional standard mileage rates for 2020. These rates are used to calculate the deductible cost of operating an automobile for business, charitable, medical, or moving purposes. The term “automobile” includes any car, van, pickup, or panel truck. As of January 1, 2020, the standard mileage rates are as follows:

1). For business use of an automobile, the 2020 rate is 57.5 cents per mile (down 0.5 cents from the 2019 rate).

Please note that since the Tax Cuts and Jobs Act (TCJA) suspended the miscellaneous itemized deduction for unreimbursed employee business expenses from 2018 to 2025, the standard mileage rate cannot currently be used to claim a deduction for those expenses. The TCJA did, however, include an exception for members of members of the U.S. armed forces reserves, state or local government officials who are paid on a fee basis, and some performing artists.

2). Driving for medical or moving purposes may be deducted at 17 cents per mile (down 3 cents from the 2019 rate).

Please note that the TCJA suspended the moving expense deduction for individual taxpayers from 2018 to 2025. However, the tax code update did include an exception for members of the U.S. armed forces on active duty whose moves are precipitated by a military order.

3). The rate for service to a charitable organization is unchanged, set by statute at 14 cents per mile.

Please note:

  • These mileage rates are optional standards. Taxpayers may opt to calculate the actual cost of operating their vehicles.
  • If a taxpayer chooses to claim a Section 179 deduction for their vehicle or use a depreciation method under the Modified Accelerated Cost Recovery System (MACRS), they are no longer eligible to use the business standard mileage rate for the vehicle.
  • For more details, visit irs.gov.

Please feel free to contact us with any questions you might have about mileage rates.