What You Need to Know About Standard Mileage Deductions

 In Blog

Contributor Robert Franger, Staff Accountant

Do you drive for business purposes, medical appointments, or charitable events? You may qualify for the standard mileage tax deduction. The Tax Cuts and Jobs Act of 2017 redefined the tax law terrain for many programs, including the mileage initiative. Knowing a few critical facts about what qualifies as mileage that can be claimed can help ensure you don’t miss out on any earned deductions.

Standard Mileage for Business Use By Year:

2018

  • 54.5 cents/mile: business
  • 18 cents/mile: medical
  • 14 cents/mile: charity

2019

  • 58 cents/mile: business
  • 20cents/mile: medical
  • 14 cents/mile: charity

2020

  • 57.5 cents/mile: business
  • 17 cents/mile: medical
  • 14 cents/mile: charity

How is the Standard Mileage Rate Calculated For Business and Medical Purposes?
The standard mileage rate for business is calculated using an annual assessment of both the fixed and variable costs associated with operating a vehicle, including:

  • Depreciation
  • Insurance
  • Gas/oil
  • Tires
  • Repairs
  • Maintenance

It’s important to note that medical mileage uses a different calculation. The standard distance for medical is based on variable costs such as gas and oil. Additionally, beyond the standard calculation, another option is to use the actual expense of your vehicle: you can tally up gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation/lease payments attributable to the portion of total miles driven that are business miles. While this method might give you an exact expense, it is much more challenging to track. The standard mileage deduction offers a more simplistic, straightforward calculation.

When You Can’t Use Standard Mileage Deduction
Individuals cannot use standard mileage deduction if:

  • You operate 5+ cars at the same time (fleet operation)
    • If 5+ vehicles are being used simultaneously, then cannot use this deduction
  • Use the depreciation method for the vehicle other than straight-line
    • If any Modified Accelerated Cost Recovery System (MACRS) depreciation methods are used other than a straight line, then the standard mileage deduction is disallowed
  • Cannot have used section 179 deduction on the car or any additional special depreciation
    • Same as the MACRS situation, if you take 179 or any special deductions, the standard mileage deduction is disallowed

Tracking Your Deductible Miles
Keeping a detailed record of potentially deductible mileage can help you optimize the benefit when you file your taxes. Throughout the year, carefully track:

Personal Miles
Personal miles are not allowable and must be backed out of the total mileage that is eligible for a deduction.

Charitable Miles
Charitable miles receive a deduction of 14 cents a mile.

Medical Miles
Medical miles receive a deduction of 17 cents a mile.

Business Miles
Business miles receive a deduction of 57.5 cents a mile.

By keeping a breakdown of your miles, you can accurately track your mileage deduction as backup documentation that may be required to support your claim to the deduction. It is essential to keep a log and have support for your deduction claim.

Other Important Things to Know About Travel Expenses
Beyond standard mileage, there are some other factors you should know when managing potential travel expenses. Some key details include:

  • According to new laws in the TCJA (suspended from 2018-2025), taxpayers can no longer deduct miscellaneous itemized deductions for unreimbursed employee travel expenses.
  • If you are self-employed, the deduction with be placed on Form 1040, Schedule C
  • Parking fees and tolls attributable to business use are now separately deductible (regardless of the use of standard mileage or actual expenses); tally them up and include them as a separate line item.

Accurately managing your annual mileage deductions can be challenging. Leone, McDonnell & Roberts team of professional tax accountants can help. Contact us today to schedule your appointment.