2020 IRS Mileage Rate Calculator
Estimated Tax Deduction
Understanding the 2020 IRS Mileage Rates
The Internal Revenue Service (IRS) provides standard mileage rates annually to help taxpayers calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. For the tax year 2020, the rates saw a slight decrease from the 2019 levels due to lower fuel costs and changes in vehicle depreciation trends.
| Category | 2020 Rate (per mile) |
|---|---|
| Business | 57.5 cents |
| Medical or Moving | 17 cents |
| Charitable | 14 cents |
How to Use This Calculator
To determine your total deduction or reimbursement value for 2020, follow these steps:
- Enter Miles: Input the total number of miles driven for the specific purpose. Note that personal commuting miles are generally not deductible.
- Select Category: Choose whether the miles were for Business, Medical/Moving, or Charitable work. Each has a specific legal rate set by the IRS.
- Review Result: The calculator multiplies your mileage by the corresponding 2020 rate to give you a total dollar amount.
Who Can Claim These Deductions?
In 2020, following the Tax Cuts and Jobs Act, the rules for who can claim these deductions remained specific. Most employees cannot claim a deduction for unreimbursed employee business expenses. However, self-employed individuals, small business owners, and independent contractors (like 1099 workers) can use these rates to offset their taxable income.
Example Calculation
If you were a freelance consultant in 2020 and drove 2,500 miles for client meetings (Business), your calculation would be:
2,500 miles × $0.575 = $1,437.50
If you drove 500 miles for a qualified charitable organization:
500 miles × $0.14 = $70.00
Record Keeping Requirements
To satisfy IRS requirements, you should maintain a contemporaneous log of your mileage. This log should include the date of the trip, the destination, the business purpose, and the number of miles driven. Digital apps or physical logbooks are both acceptable forms of documentation.