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The IRS issued notice 2020-5, updating optional standard mileage rates for business a vehicle. As of January 1, 2020, the standard mileage rates of cars, vans, pickups or panel trucks are as follows:
Remember, under the Tax Cuts and Job Act, taxpayers can’t claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. The same applies for a deduction for moving expenses unless a member of the Armed Forces on active duty and moving under orders to a permanent change of station.
The standard mileage rate of business use is based on a yearly study of the fixed and variable costs of operating an automobile, The rate for medical and moving purposes depends on the variable costs. Taxpayers also have the option of calculating the actual costs of using their vehicle as opposed to using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming Section 179 for that vehicle.
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