2021 Standard Mileage Rates from the IRS

The IRS’s optional standard mileage rates went into effect on Jan. 1, 2021. As in previous years, the new rates are used to “calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.” The rates apply to cars, vans, pickups, and panel trucks.

The new rates are:

• 56 cents per mile for business use, down 1.5 cents from the rate for 2020,
• 16 cents per mile for medical or moving purposes for qualified active-duty military members, down 1 cent from the rate for 2020, and
• 14 cents per mile driven in service of charitable organizations, which is unchanged from 2020.

Under the Tax Cuts and Jobs Act, you can’t claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. You also can’t claim a deduction for moving expenses unless you’re an active-duty member of the military under permanent change of station orders. (For more information, see Moving Expenses for Members of the Armed Forces.)

You can also always calculate the actual costs of using your vehicle, rather than using standard mileage rates.

To use the standard mileage rate, you must choose to do so in the first year your vehicle is available for business use. In subsequent years, you can then choose the standard rate or actual expenses.

If you lease your vehicle, you can choose between the standard or actual expense option. However, if you opt to use the standard mileage rate, you can’t switch to the actual expense rate in later years.

If you have questions about any of the IRS’s other recent updates, please let us know.