Mileage Reimbursement Decreases This Year

The standard business mileage rate for 2021 is 56 cents per mile, the IRS has announced. That is down 1.5 cents from 2020.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for employee travel expenses that are not reimbursed.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses.

Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.

Source: IRS