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Standard Mileage Rate Down Slightly for 2020, IRS Says

Dec. 31, 2019, 5:46 PM

The standard mileage rate for transportation and travel expenses involving the business use of an automobile in 2020 is to decline to 57.5 cents a mile from 58 cents a mile in 2019, the Internal Revenue Service said Dec. 31.

The rate and other guidance were published in Notice 2020-05, the agency said in a news release.

The standard mileage rate for medical or moving purposes fell to 17 cents a mile from 20 cents. The rate for charitable purposes, which is set by statute, remains 14 cents a mile.

The maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate plan is $50,400 in 2020, unchanged from 2019.

The standard mileage rate for business, which takes effect Jan. 1, 2020, is based on an annual study of the fixed and variable costs of operating an automobile. Employees may use the standard mileage rate as an alternative to accounting for actual operating and fixed expenses.

Under the tax code overhaul (Pub. L. 115-97) that took effect Jan. 1, 2018, employer-paid costs for employee relocations are wages taxable to employees, effective from Jan. 1, 2018, to Dec. 31, 2025. Some costs to move active-duty members of the U.S. military for permanent changes of station remain tax-free.

To contact the reporter on this story: Michael Trimarchi in Washington at mtrimarchi@bloombergtax.com

To contact the editor responsible for this story: Howard Perlman in Washington at hperlman@bloombergtax.com

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