06 January 2020 Federal mileage rates decrease for 2020, luxury vehicle limit is unchanged Effective January 1, 2020, the business standard mileage rate for use of a car (including vans, pickup trucks, and panel trucks) decreases from $0.580 to $0.575 and the rate for medical and relocation mileage decreases from $0.20 to $0.17. Mileage related to charity is set by law and remains at $0.14 per mile. (Notice 2020-05.) It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses incurred after December 31, 2017, with the exception of members of the Armed Forces on active duty moving under orders to a permanent change of station. Note that the business standard mileage rate may not be used (1) after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), (2) after claiming the IRC Section 179 deduction for that vehicle, (3) after claiming depreciation using a method other than straight-line for the estimated useful life, or (4) to compute the deductible expenses for more than four vehicles used simultaneously. (Revenue Procedure 2010-51, IRB 883.) For the rates and limits applicable in 2019, see our special report. Pursuant to the vehicle valuation limit that applies to use of the optional fleet-average and vehicle cents-per-mile valuation methods, the maximum fair market value of the vehicle (including trucks and vans) first made available to employees in calendar year 2020 is $50,400, unchanged from 2019.
Document ID: 2020-0022 | |||||||||||||||||||||
