What is the IRS Mileage Rate for 2020 and will Business Travelers be affected?

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The IRS Mileage Rates for 2020 have been released and it’s an actually a small decrease over 2019’s mileage rates. We examine what the IRS Mileage Rate for 2020 for (business use, as well as medical and charitable mileage rates) is and how business travelers may or may not be affected.

What is the IRS Mileage Rate in 2020?

As of January 1, 2020, the standard IRS mileage rates are as follows:

• 57.5 cents per mile driven for business use
• 17 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

What’s interesting is that two of these mileage rates are actually reduced for 2020 when compared with the 2019 IRS mileage rates. In fact 2020 is the first time in four years that the mileage rates decreased as opposed to increase (the change from 2018 to 2019 for the business rate was a 1.5 cent increase).

For example, the more commonly used IRS mileage rate is the business use rate which is now 57.5 cents per mile driven for business purposes. The 2019 IRS Mileage Rate for business was actually a half a cent higher at a full 58 cents per mile driven.

Furthermore, the IRS Mileage Rate for medical expenses (also moving) dropped a full 3 cents which is a substantive drop.

Lastly, the approved 2020 mileage rate for charitable activities stayed steady at 14 cents per mile.

You can read the full IRS mileage announcement for 2020 here.

The full transcript is here.

So what who cares, right? What’s the impact of the 2020 Mileage Allowance on business travelers?

As a Business Traveler (like we are here at the CBoardingGroup) this really won’t affect you much. Now, when you fill out your expense report and submit the mileage it took you to drive to the airport for your next trip you will get paid a half a penny less.

It is a little unusual (but not earth shattering) that the mileage rate decreased this year. Many years it increases. As noted earlier this is the first time in four years the mileage rates have decreased. It last happened in 2016 when the rates dropped 3.5 cents from 2015’s mileage allowance and there was a full nickle drop in 2011.

The IRS notes the methodology used to determine the mileage allowance is as follows:

“The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.“

The End

So, in the end the IRS Mileage Rates for 2020 is a no-big-deal event. Or as an old boss I once had used to say, “merely interesting.” Happy traveling out there in 2020 fellow business travelers.

FAQS for 2020 Mileage Rates:

What is the 2020 Mileage Rate for Business Use?

The 2020 Mileage Rate for business use is 57.5 cents per miles driven. This down .5 cents from 2019 rates.

What is the 2020 IRS Mileage Rate for Medical Use?

The 2020 Mileage Rate for medical use or moving dropped to 17 cents per mile driven, down from 20 cents in 2019.

What is the 2020 IRS Mileage Rate for Charitable Use?

The 2020 Mileage Rate for charitable service is 14 cents per mile driven. This number is flat from 2019 rates.