On Dec. 31. 2019, the Internal Revenue Service (IRS) issued the 2020 standard mileage rates, which are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
The mileage, medical, and moving rates all decreased from 2019. For business travel driven, the business mileage rate decreased by one half of a cent. For medical and certain moving expenses, the rate decreased by three cents. The unchanged charitable rate is set by statute.
Beginning on January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 57.5 cents per mile driven for business use (down from 58 cents in 2019);
- 17 cents per mile driven for medical or moving purposes (down from 20 cents in 2019); and
- 14 cents per mile driven in service of charitable organizations (unchanged).
According to the IRS, under the Tax Cuts and Jobs Act, taxpayers can’t 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.
The standard mileage rate is based on an annual study of the fixed and variable costs of operating an automobile. The medical and moving purposes rate is based on variable costs. The IRS reminds taxpayers that they always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
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