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Optional standard mileage rates issued for 2020

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Tax Hot Topics newsletterIn Notice 2020-05, the IRS issued the 2020 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. In lieu of using the optional standard rates, taxpayers have the option of calculating the actual costs of using their vehicle, but only if taxpayers maintain adequate records or other sufficient evidence of the actual costs incurred.

Beginning on Jan. 1, 2020, the standard mileage rates for the use of an automobile are:

  • 57.5 cents per mile for business miles driven (down from 58 cents that was in effect for 2019)
  • 17 cents per mile driven for medical or moving purposes (down from 20 cents that was in effect for 2019)
  • 14 cents per mile driven in service of charitable organizations (no change from prior years)

In addition, taxpayers using the standard mileage rates must comply with Rev. Proc. 2019-46, which made numerous modifications to the rules for using optional standard mileage rates and the substantiation rules for automobile costs in order to reflect the changes made by the TCJA, among other items. Rev. Proc. 2019-46 is effective for deductible transportation expenses and specified mileage allowances, reimbursements, or transportation expenses paid or incurred after Nov. 13, 2019. Taxpayers utilizing the 2020 optional standard mileage rates should refer to the guidance in Rev. Proc. 2019-46 in addition to Notice 2020-05.

Contacts:
Jeff Martin
Partner
Washington National Tax Office
T +1 202 521 1526

Keith Mong
Managing Director
Washington National Tax Office
T +1 202 521 1554

James Sanchez
Senior Associate
Washington National Tax Office
T +1 202 861 4107

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