The Internal Revenue Service (IRS) has announced the optional standard mileage rate used to calculate the costs of operating a car, van, pickup truck, or panel truck for business purposes in 2021. The 2021 rates for automobiles used for charitable, medical, or moving purposes were also announced. 

The new rates beginning January 1, 2021, are:

  • 56 cents per mile for business miles driven, down one half of a cent from the rate for 2020
  • 16 cents per mile driven for medical or moving purposes, down three cents from the rate for 2020
  • 14 cents per mile driven for gratuitous services to a charitable organization (unchanged from 2020)

The TCJA suspends all itemized deductions including unreimbursed employee travel expenses for taxable years beginning after Dec. 31, 2017, and before Jan. 1, 2026. Therefore, the business standard mileage rate can’t be used to claim an itemized deduction for unreimbursed employee travel expenses during the suspension. For more details, see Rev. Proc. 2019-46 (PDF).

For additional information or specifics on how and when to apply the applicable mileage rate expense, read the complete IRS announcement.

LBMC tax tips are provided as an informational and educational service for clients and friends of the firm. The communication is high-level and should not be considered as legal or tax advice to take any specific action. Individuals should consult with their personal tax or legal advisors before making any tax or legal-related decisions. In addition, the information and data presented are based on sources believed to be reliable, but we do not guarantee their accuracy or completeness. The information is current as of the date indicated and is subject to change without notice.