2020 IRS Standard Mileage Rate

It is hard to believe that we are in the first quarter of 2020!

As we settle into 2020, people are starting to ask what the 2020 standard mileage rate will be.

The gas and wear and tear on a vehicle to make a simple trip to the hardware store, print shop, or neighborhood bakery adds up for employees making a modest salary.

Many businesses reimburse employees for the use of personal vehicles for work related travel to help cover the cost of these trips.

This benefit allows the employee to be reimbursed for work related travel using personal vehicles.

Businesses use this standard mileage rate for calculating deductible costs associated with business automobile expenses.

Others can use the deduction for miles accumulated for charitable volunteer work, deductible moving expenses, or miles for approved medical care.

The IRS recently announced slight changes to the 2020 Standard Mileage Rate.

The rate for business miles, as well as medical and moving rates, both decreased a few cents per mile from the 2019 rate.

Employers reimburse business related mileage for employees using their vehicles for company related business.

The standard mileage rates that went into effect on January 1, 2020, are now:

• 57.5 cents for every mile of business travel driven – down by one half of a cent from the 2019 rate.

• 17 cents per mile driven for medical or moving purposes – down 3 cents from the 2019 rate.

• 14 cents per mile driven in service of charitable organizations – unchanged.

Mileage reimbursement can be applied to cars, vans, panel or pickup trucks.

How To Track Mileage

I’ve been around for a while and remember when mileage was manually recorded in logbooks that were kept in the vehicle.

A logbook method of tracking miles worked – to a point.

If an employee was in a hurry and forgot to log their miles, it turned into a nightmare trying to go back and recalculate. We didn’t have GPS tracking on phones to do that quickly for us.

Today technology helps a lot! There are countless ways to track mileages.

There are now mileage tracking phone apps and countless technologies that help to track, monitor, and record vehicle mileage.

These new technologies also help with the unpleasant task of reporting mileage to employers.

Logbooks or technology tracking doesn’t matter. Find the best approach for your business and employee population.

You should also note that you may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

Organizations that reimburse employee mileage should require employees to keep accurate records and submit a request for reimbursement on a regular basis.

Keep in mind with the new Tax Cuts and Jobs Act (TCJA), what you are able to deduct may have changed.

Consult your tax professional for questions regarding what your qualified deductions will be.

More information is available at IRS.gov.