IRS Lowers Standard Business Mileage Rate for 2020

IRS Lowers Standard Business Mileage Rate for 2020

In a New Year’s Eve announcement, the IRS lowered the standard business mileage rate for 2020. For 2019, the rate was 58 cents per mile. For 2020, the rate is one half of a cent lower, or 57.5 cents per mile. The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile.

The standard medical expense rate dropped from 20 cents per mile for 2019 to 17 cents per mile for 2020. The charitable mileage rate remains fixed at the statutory rate of 14 cents per mile.  This rate can only be changed by Congressional action.

It is important to note that under the current tax law, taxpayers cannot deduct unreimbursed business mileage on Schedule A as an itemized deduction. However, employers can reimburse business expenses up to the standard mileage rates, based on substantiation of the mileage, on a tax-free basis.

View the full IRS announcement.

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