What Is the Standard Mileage Rate in 2020?
Beginning January 1, 2020 the IRS Standard Mileage Rate for personal car use will be 57.5 cents per mile for business use, 17 cents per mile for medical and moving mileage and 14 cents per mile for charitable organization mileage.
2020 IRS Standard Mileage Rate
|2020 Standard Mileage Rate|
|Business Mileage||57.5 cents|
|Medical & Moving Mileage||17 cents|
|Charitable Mileage||14 cents|
Who Is Eligible for the IRS Standard Mileage Rate Deduction?
If driving is part of your job, you are entitled to use the federal mileage rate deduction established by the IRS to reimburse you for mileage costs. Whether you work in ridesharing, real estate, sales, delivery, medicine, or any other number of fields as a self-employed individual that require driving, the IRS standard mileage rate deduction can save you much needed money. Driving done for charity or moving can also qualify for reimbursement. Even if you’re not employed by a larger company but rather work as a contractor or freelancer, you can benefit from compensation under the government standard mileage rate.
Of course, not all driving that comes along with employment qualifies for tax deductions. The IRS has a commuting mileage rule in place, stating that “transportation between your home and your main or regular place of work” is not eligible for mileage deduction. In other words, if you work at the same location for a year, driving there and back home is considered personal mileage, and is therefore not tax deductible.
Commuting to and from work is only classified as business mileage under certain circumstances, such as travel to temporary worksites or driving to meet clients at their place of business. If your home counts as your regular office, driving between your home office and another workplace is considered travel from one job to another and therefore qualifies as business mileage. If you are unsure whether or not a trip is considered business mileage, it is best to look into the specifics of the commuting mileage rule to be sure.
What are the 2019 Standard Mileage Rate and previous years?
For 2019, the IRS standard mileage rates are 58 cents per mile for business mileage, 20 cents per mile for medical mileage, and 14 cents per mile for charity mileage. If you wish to look at the standard mileage rates for previous years, you can view the rates for each year since 1997 on the official IRS website. As you can see, the standard business mileage rate has stayed in the 50s cent range for the past decade. Starting January 1, 2020, the IRS Standard mileage rate for transportation and travel expenses has declined to 57.5 cents per mile from 58 cents per mile in 2019.
IRS Standard Mileage Deduction Rates for 2020 and Previous Years
|2020 Standard Mileage Deduction Rate||57.5 cents|
|2019 Standard Mileage Deduction Rate||58 cents|
|2018 Standard Mileage Deduction Rate||54.5 cents|
|2017 Standard Mileage Deduction Rate||53.5 cents|
|2016 Standard Mileage Deduction Rate||54 cents|
|2015 Standard Mileage Deduction Rate||57.5 cents|
|2014 Standard Mileage Deduction Rate||51 cents|
|2013 Standard Mileage Deduction Rate||56 cents|
|2012 Standard Mileage Deduction Rate||55.5 cents|
|2011 Standard Mileage Deduction Rate(s)||51 cents
|2010 Standard Mileage Deduction Rate||50 cents|
Standard Mileage Rate vs. Actual Vehicle Expenses
It’s essential to be aware that the standard business mileage rate does not take into account all the expenses associated with operating a vehicle. As a way to more accurately reimburse drivers, the IRS has established a set of standards allowing for reimbursement based on actual costs as an alternative to using the standard mileage rate. Figuring out which method of reimbursement will save you more money, however, requires you to do some math.
If you are self-employed and would like to use the actual expense method set by the IRS to calculate your mileage reimbursement, you may do so. The IRS guidelines list notable car and truck expenses eligible for deduction, including depreciation, lease payments, registration fees, licenses, gas, insurance, repairs, oil, garage rent, tires, tolls, and parking fees.
If you work for a larger company, they may offer a Fixed and Variable Rate (FAVR) reimbursement plan, which reimburses drivers through a different method. It takes into consideration not only the cost of gas, but also fixed expenses — such as depreciation, insurance, registration fees, and taxes — and variable expenses — like gas, oil changes, tires, and routine maintenance. If your company uses a FAVR reimbursement plan, you should do some research on what exactly is and isn’t covered under it.
How to Keep IRS Compliant Mileage Reports in 2020
If you qualify for tax deductions under the business mileage rate, medical mileage rate, or charity mileage rate, all mileage reports that you file must be accurate, regardless of which method you choose to utilize. Keeping track of this information is often tedious and wastes time that you could be spending more productively, especially if your job involves a lot of driving. Lucky for you, Everlance makes monitoring your miles driven easier than ever.
Everlance is the highest-rated mileage tracker and expense log app, with a 4.9/5.0 star rating on the Apple App Store and Google Play Store. Our app uses GPS data to detect when you are driving automatically. You can then simply swipe to classify each trip you take as business or personal driving. In addition to mileage, Everlance records expenses and revenue so you can easily create and download spreadsheets and PDFs, which report all the data you need to organize receipts for when filing taxes.
Why bother keeping track of messy paperwork or computer documents when Everlance can do the work for you? It takes seven minutes or less to set up an account, so get started today to ensure that your mileage reports are accurate and better organize your business-related finances.