As of January 1, 2020, the mileage rates determined by the IRS, with the rate for businesses being 57.5 cents, the rate for medical is 17 cents and the rate for driving in relation to charitable organizations are 14 cents. These rates have changed for 2021.
The published rates cover the cost of individuals using their personal vehicles for things related to business. Whether the individual is an employee and is using their personal vehicle for employer-related activities or the individual is self-employed, the IRS publishes a rate for business mileage. It’s worth noting that employers may or may not use the rate published by the IRS, but if the employer does the mileage reimbursement for their employee that is above the rate, the employee is required to pay income tax on that additional amount.
There are different rules for individuals who are using their personal vehicles for business compared to using them for medical or charitable purposes. There are additional sections associated with this hub that includes information for employees, employers, and the self-employed/business owners.
IRS Mileage Rates For 2021
Beginning January 1, 2021, the summary for the standard mileage rates for vehicles, including vans, pickups, and panel trucks, are as follows:
- $0.56 per mile for business
- $0.16 per mile for medical purposes
- $0.17 per mile for moving (used only for Armed Forces individuals on active duty)
- $0.14 per mile for service of charitable organizations
If you want more detailed information about the standard mileage rates, you can find it on the IRS website.
Previous Years’ Standard Mileage Rates
The IRS standard mileage rates typically change each year, usually going up or down by a cent or two. Here are the mileage rates since 1997:
|Period||Business||Charity||Medical & moving|
|Jul 1 – Dec 31, 2011||55.5||14||23.5|
|Jan 1 – Jun 30, 2011||51||14||19|
|Jul 1 – Dec 31, 2008||58.5||14||27|
|Jan 1 – Jun 30, 2008||50.5||14||19|
How Are Rates Determined?
Each year, the IRS takes the average cost of owning and operating a vehicle and uses it to increase or decrease a given rate. The mileage rates for businesses are also determined by the IRS. These costs include both fixed and variable mileage expenses. The mileage rate for charity has been unchanged since 1998 and is a rate that is set by a statute.
How to Properly Track Mileage
Proper mileage tracking is an often tedious and time-consuming process for employers, employees, contractors, freelancers, and business owners of all types. Using a business expense tracking app like TripLog makes calculating your mileage easier and faster. You can download TripLog for free on iOS or Android, or use our web client.