DEductions for Mileage in 2020
Taxpayers have the option of choosing to deduct as costs of using their vehicle a standard mileage rate or the actual costs involved. The best approach is to be able to compute both and take the biggest deduction.
Beginning on Jan. 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
• 57.5 cents per mile driven for business use, down one half of a cent from the rate for 2019,
• 17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and
• 14 cents per mile driven in service of charitable organizations.
So for example if on 2019 a business used a car exclusively for business purposes and drove it 15,000 miles, with the following actual expenses: repairs and maintenance $50, gasoline $2,000, depreciation $3,000, insurance $1,500. Actual expenses total $6,550, and when compared to the standard mileage amount of $8,625 (15,000X0.575), the taxpayer may elect to take the higher deduction of $8,625.