Calling all commuters! The IRS announced the 2020 “standard mileage rates”. Whenever you drive for business, medical reasons, or in support of a charitable organization, you may be able to get a mileage deduction and save money on your taxes.
Beginning on January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 57.5 cents per mile for business miles driven, down from 58 cents in 2019
- 17 cents per mile driven for medical purposes, down from 20 cents in 2019
- 14 cents per mile driven in service of charitable organizations
The standard mileage rate for a business is based on an annual study of the fixed and variable costs of operating an automobile, and the rate for medical purposes is based on the variable costs.
In general, you can only claim the deduction if you use your personal vehicle for your business, medical, or charitable purposes. For example, if you use a vehicle that was purchased by a business you cannot claim business mileage.
*Under the tax reform, you can no longer deduct mileage for moving unless you are active duty military so the standard mileage rate for moving is not included.
Here’s a breakdown of what is covered for each:
With business mileage, your commute to your regular place of business cannot be deducted when you’re an employee. If you are self-employed any driving you do directly related to your business, like meeting with a client or going to a networking event, may be deductible business mileage. If you were an employee in 2017 and had unreimbursed expenses for driving somewhere for work outside of your regular office, then you were able to take the standard mileage deduction on your 2017 taxes. However, under tax reform, miscellaneous expenses like unreimbursed mileage cannot be deducted beginning in 2018 through Dec. 31, 2025.
Good news! You can claim medical miles if you drive to receive medical care, which includes you, your spouse, or your children. The amount of this deduction is added to your medical deduction, which means it will only be included if your total medical expenses exceed 7.5% of your adjusted gross income and you can itemize your tax deductions.
You can also claim charitable mileage for the driving you do in service of a recognized 501 (c)(3) charitable organization. Another good reason to volunteer your time!
Come tax time, don’t worry about knowing these tax rules. TurboTax will ask you simple questions and give you the tax deductions and credits you are eligible for based on your answers. If you have questions, you can also connect live via a one-way video from the comfort of your home to a TurboTax Live CPA or Enrolled Agent with an average 15 years experience to get your tax questions answered. TurboTax Live CPAs and Enrolled Agents are available in English and Spanish year round and can also review, sign, and file your tax return.