IRS issues 2020 standard mileage rates

The optional standard mileage rates for business use of a vehicle will decrease slightly in 2020 after increasing significantly in 2019.  For business use of a car, van, pickup truck, or panel truck, the rate for 2020 will be 57.5 cents per mile in 2020, down from 58 cents per mile last year.  Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile.

  • Self-employed taxpayers can deduct automobile expenses if they qualify as ordinary and necessary business expenses.

 

  • The standard mileage rate also can also be used as the maximum amount an employer can reimburse an employee for operating an automobile for business purposes without substantiating the actual expense incurred.

 

  • Beginning in 2018, those who work for an employer and receive a W-2 can no longer take a mileage deduction on their personal tax return related to their work as an employee.