2020 Business Mileage Rate Calculator
Business: 57.5 cents/mile
Medical/Moving: 17 cents/mile
Charitable: 14 cents/mile
2020 Deduction Summary
Understanding the 2020 IRS Standard Mileage Rates
This calculator is specifically designed for the tax year 2020. Filing taxes for past years requires strict adherence to the rates established by the Internal Revenue Service (IRS) for that specific calendar year. For 2020, the IRS actually lowered the business mileage rate slightly compared to 2019.
Using the standard mileage rate is a method for calculating the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. It simplifies record-keeping by replacing actual expense tracking (gas, insurance, repairs) with a flat rate per mile.
Official 2020 Mileage Rates Breakdown
- Business Use: 57.5 cents per mile (down from 58 cents in 2019).
- Medical & Moving: 17 cents per mile (down from 20 cents in 2019). Note: The moving deduction is generally suspended for non-military taxpayers under the TCJA.
- Charitable Service: 14 cents per mile (set by statute, remains unchanged).
How to Calculate Your 2020 Deduction
To determine your deduction, you simply multiply the number of miles driven for a specific qualified purpose by the applicable rate. While the math is straightforward, ensuring your mileage log is audit-proof is the real challenge.
For example, if you drove 10,000 miles for business in 2020:
10,000 miles x $0.575 = $5,750 tax deduction.
Essential Record-Keeping for 2020 Returns
Even though you are calculating for a previous tax year, the IRS requires that you have contemporaneous records to support your deduction. If you are audited, estimates are typically rejected. A valid mileage log must include:
- The date of the trip.
- The starting and ending location.
- The total distance driven.
- The business purpose of the trip.
- The total mileage on the odometer at the beginning and end of the year.
Business Miles vs. Commuting
A common mistake is claiming commuting miles. Commuting—driving from your home to your regular place of business—is never deductible. Business mileage generally starts when you drive from your office (or home office) to a client site, or between job sites. Understanding this distinction is critical for an accurate 2020 tax return.
FAQ: 2020 Mileage
Can I use the standard mileage rate if I used actual expenses in previous years?
Generally, to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then, in later years, you can choose to use either the standard mileage rate or actual expenses.
Why did the rates decrease in 2020?
The IRS adjusts rates based on an annual study of the fixed and variable costs of operating an automobile. In 2020, factors such as fuel prices and insurance data led to a slight reduction in the standard business rate.