San Francisco Tax Preparation / CPA: 2021 Standard Mileage Rates Released

Filed in CCH NEWS FEED by on February 1, 2021

The IRS released the optional standard mileage rates for 2021. Most taxpayers may use these rates to compute deductible costs of operating vehicles for:

  • business,
  • medical, and
  • charitable purposes.

Some members of the military may also use these rates to compute their moving expense deductions.

2021 Standard Mileage Rates

The standard mileage rates for 2021 are:

  • 56 cents per mile for business uses;
  • 16 cents per mile for medical uses; and
  • 14 cents per mile for charitable uses.

Taxpayers may use these rates, instead of their actual expenses, to calculate their deductions for business, medical or charitable use of their own vehicles.

FAVR Allowance for 2021

For purposes of the fixed and variable rate (FAVR) allowance, the maximum standard automobile cost for vehicles places in service after 2020 is:

  • $51,100 for passenger automobiles, and
  • $51,100 for trucks and vans.

Employers can use a FAVR allowance to reimburse employees who use their own vehicles for the employer’s business.

2021 Mileage Rate for Moving Expenses

The standard mileage rate for the moving expense deduction is 16 cents per mile. To claim this deduction, the taxpayer must be:

  • a member of the Armed Forces of the United States,
  • on active military duty, and
  • moving under an military order and incident to a permanent change of station.

The Tax Cuts and Jobs Act of 2017 suspended the moving expense deduction for all other taxpayers until 2026.

Unreimbursed Employee Travel Expenses

For most taxpayers, the Tax Cuts and Jobs Act suspended the miscellaneous itemized deduction for unreimbursed employee travel expenses. However, certain taxpayers may still claim an above-the-line deduction for these expenses. These taxpayers include:

  • members of a reserve component of the U.S. Armed Forces,
  • state or local government officials paid on a fee basis, and
  • performing artists with relatively low incomes.

Notice 2020-5, I.R.B. 2020-4, 380 is superseded.

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