The Internal Revenue Service lowered the standard mileage rates used to calculate deductible costs of using a vehicle for business, charitable, medical or moving purposes.
- As of January 1, 2020, the business use rate was lowered slightly from 58 cents per mile in 2019 to 57.5 cents per mile in 2020. (2017 was 54.5 cents per mile.)
- The use of a vehicle for medical or for limited moving expenses for members of the armed forces can be deducted at 17 cents, three cents lower than the 2019 rate. It is important to note that the Tax Cuts and Jobs Act (TCJA) eliminated moving expense and unreimbursed employee travel expense deductions for individual taxpayers, now only certain members of the U.S. armed forces can deduct moving expenses.
- When using a vehicle in the service of charitable organizations, the amount is set by statute and remains the same at 14 cents per mile.
- The portion of the business standard mileage rate treated as depreciation is:
- 24 cents per mile for 2016
- 25 cents per mile for 2017 and 2018
- 26 cents per mile for 2019
- 27 cents per mile for 2020
- Under Fixed and Variable Rate (FAVR) plan, the standard vehicle cost cannot exceed $50,400 for autos, trucks, or vans, and the same value is used for fleet-average and vehicle cents-per-mile valuation rules.
If you have any questions about your deductible costs for your vehicles, contact us at 949-860-9893 for help. We look forward to speaking with you soon.