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Standard Mileage Deduction Rates – 2020 and 2021
If you’re in business, you’re interested in the IRS mileage deduction rates. The 2020 rates fluctuated because of high gas prices and now the 2021 rates have been released.
Standard Mileage Deduction – 2020
The IRS usually issues different mileage deduction rates every year. Mileage deduction rates are the dollar value per business mile traveled that you can claim as a deduction. For instance, if you traveled 1,000 miles in your vehicle on business in 2020, you can deduction 1,000 multiplied by the designated rate.
If you’re in business, you’re interested in the IRS mileage deduction rates. The 2020 rates was higher than 2021. It changes from 57.5 cents to 56 cents per mile in 2021.
2020 mileage rate is 57.5 cents. So in this example, you can deduct 1000milesx0.575=$575
The rate usually goes up comparing to the prior year but since 2019 that the rate was 58 cents, now it is going down. In 2021 the rate will be decreased to 56 cents.
Standard Mileage Deduction – 2021
The IRS announced the standard mileage rates for the 2021 year. The new rate for standard business mileage will be 56 cents per mile. This rate should be used when you prepare your tax return for the 2021 year, to wit, in 2022.
If we have this descendant process for a couple of next years, probably it is better to use actual mileages as business expenses. We’ll see how it will go for 2022.