2021 Standard Mileage Rates

Just as the never-ending year of 2020 was concluding, the IRS released the updated standard mileage rates for 2021. The rates for the use of a vehicle (including cars, pickups, vans, or panel trucks) had a small downturn from the 2020 rates.

The new standard mileage rates starting on January 1, 2021, are as follows:

  • 56 cents per mile for business travel driven (down 1.5 cents from 2020)
  • 16 cents per mile driven for medical or moving purposes (down 1 cent from 2020)
  • 14 cents per mile driven in service of charitable organizations (remained the same)

The rate for business use is updated each year based on an annual study of fixed and variable costs of operating an automobile. These costs include, but are not limited to, depreciation, insurance, repairs, tires, maintenance, gas, and oil prices. The rate for medical and moving purposes is only based on variable costs for operating.

As a reminder of the rules under the Tax Cuts and Jobs Act (TCJA), any unreimbursed travel expenses are no longer allowed to be claimed as miscellaneous itemized deductions for individual taxpayers. The TCJA also disallowed the deduction of moving expenses, excluding armed forces on active duty with orders of permanent change. Both rules will continue to be in place through the beginning of 2026.

Along with the Tax Cuts and Jobs Act changes, it should also be noted that no business mileage is allowed when using the Modified Accelerated Cost Recovery System (MACRS) or when a 179 deduction was used. Taxpayers continue to be limited on the number of vehicles (no more than four) that can be applied using the standard rate at one time. Individuals can also use their actual allowable expenses instead of the standard rates given they have kept the appropriate records for evidence.

If any questions arise when implementing these mileage rates or adjustments, please reach out to your local Schneider Downs tax professional.

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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2021 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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