Now that it is 2020, there are changes occurring everywhere, even in the tax world. One of these changes involves mileage. More specifically, there are new optional standard rates for deductible costs of operating vehicles for the purposes of business, charity, or medical events. In certain cases, these mileage deductions also apply for moving purposes.
For business use, the standard mileage rate has decreased from the 2019 rate of 58 cents per mile. It now lies at 57.5 cents, down half of a cent. Similarly, the mileage rate for medical purposes has also decreased. Last year, the rate stood at 20 cents per mile, but 2020 finds these rates at 17 cents instead. These 17 cents also apply to certain moving expenses this year. This only applies to members of the Armed Forces on active duty that are moving under orders. Normal taxpayers cannot claim deductions for moving expenses. Like every year, the charitable rate stays at 14 cents per mile.
The business standard mileage rate may not be used in certain cases, such as if depreciation methods under the Modified Accelerated Cost Recovery System (MACRS) are used. In addition, claiming a Section 179 deduction for the vehicle also voids the ability to use these rates. The standard mileage rates for businesses can only be used for five vehicles at one time.
While there always is the option of simply calculating actual costs rather than using these rates, it is still nice to know what is going on in the world around you. The charitable standard mileage rate stays the same every year, but the other rates remain fluid and therefore fluctuate from year to year.