IRS ANNOUNCES 2021 STANDARD MILEAGE RATE
On December 22, 2020, the IRS released it’s annual optional standard mileage rate for 2021. The optional standard mileage rate is used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning January 1, 2021, the optional standard mileage rates are:
- 56 cents per mile driven for business use
- 16 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
The business mileage rate decreased one and one-half cents for business travel and one cent for medical and certain moving expense from the rates for 2020. The charitable rate is set by statute and remains unchanged for 2021.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Under the Tax Cuts and Jobs Act of 2017, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station.
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