New 2020 Standard Mileage Rates

Author: Larry Chester, President

As of January 1, 2020, the Internal Revenue Service has revised the 2020 optional standard mileage rates used when tabulating the deductible costs of operating a vehicle for business, medical, charitable or moving needs.

The standard mileage rates for use of cars, trucks, vans, panel trucks is now:

• 57.5 cents per mile driven for business purposes,
• 17 cents/mile driven for medical or moving purposes,
• 14 cents/mile driven in service of charitable organizations.

These rates show a decrease from the 2019 rates. The business mileage rate went down one half a cent and the rate decreased three cents for medical and moving purposes. The charitable mileage rate remained the same since it is set by a statute.

Under the Tax Cuts and Jobs Act, taxpayers can not make a miscellaneous itemized deduction in lieu of unreimbursed travel expenses for employees. Plus taxpayers can’t claim a deduction for moving expenses; this is not including active-duty members of the Armed Forces that are moving to a permanent change of station.

This standard business-use mileage rate is based on an annual study of the fixed and variable costs of operating a vehicle. Instead of using the standard mileage rates, taxpayers always have the option of calculating the actual costs of using their automobile.

You may not, however, use the business standard vehicle mileage rate after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a deduction under section 179 for that vehicle.