If you’re an employee or employer, you’re probably aware that a lot of things change in the beginning of each year. This year, for instance, we’ve already seen changes to the US overtime policy and new salary history bans in Ohio, New York, and New Jersey. Of course, to keep us on our toes, the IRS has placed a new regulation upon us. On December 31st, 2019, the IRS released the new standard mileage rate for the year 2020. Their official notice explains the rules of the optional standard mileage rate within the next year. Taxpayers will use this rate when computing deductible costs when using a vehicle for business, charitable, medical, or moving expense purposes.
The New Standard Mileage Rates
Starting January 1st, 2020, new mileage rates will apply. These new rates will apply for the use of cars, vans, pickups, and panel trucks.
- 57.5 cents per mile driven for business use.
- 17 cents per mile driven for medical or moving purposes.
- 14 cents per mile driven in service of charitable organizations.
Preparing for the change
If you are planning on tracking mileage for tax purposes, it’s important that you use a system to accurately track mileage. You’ll want accurate records of your odometer readings during the beginning and end of the tax season. It is also wise to keep track of your mileage when using a vehicle for business purposes. When you have proper records, you will be able to record your mileage on your tax return form properly, and you’ll have proper documentation if the IRS asks for your records.