Resources

The IRS lowered the standard mileage rates that many employers use to reimburse employees for using a car or truck for business-related reasons.
Beginning Jan. 1, the standard rate for calculating the deductible costs of operating an automobile for business purposes will decrease by half a cent to 57.5 cents per mile, according to Dec. 31 guidance, Notice 2020-05, and an accompanying news release.

The business use rate is based on an annual study of the fixed and variable costs of operating an automobile, the IRS said in the news release.

The IRS also lowered the rate for calculating deductible expenses of using a car for medical or moving purposes—the new rate is 17 cents per mile, down three cents from 2019. The agency noted that the 2017 tax law barred deductions for moving expenses except for active duty military members in specific circumstances.

The rate used to calculate deductions related to vehicles driven for charitable purposes remained at 14 cents per mile as set by law, the IRS said.

Please be advised that, based on current IRS rules and standards, the advice contained herein is not intended or written by the practitioner to be used and cannot be used by the taxpayer for the purpose of avoiding penalties.

MillerMusmar CPAs is an established accounting firm with offices in Reston, Virginia and Manassas, Virginia. We have a twenty-five-year history of providing top quality auditing, tax, and accounting services to clients throughout the Washington Metropolitan area and internationally. By combining the expertise of a mid-sized firm with the personal attention, we are both large and small enough to deliver the responsive service to our clients. For more information, please visit our website at www.MillerMusmar.com.