Business travel is an unavoidable part of many jobs and an important expense for businesses. Keeping track of the cost of travel is essential in order to ensure that a company remains profitable. Knowing the current mileage rate for business travel can help businesses save money and stay organized.
The IRS sets the standard mileage rate for business use of a vehicle. The rate is based on an annual study of the fixed and variable costs of operating a car, including depreciation, insurance, repairs, tires, maintenance, gas and oil.
The current standard mileage rate set by the Internal Revenue Service (IRS) for business use of a car is 56 cents per mile for 2020.
This rate applies to all types of vehicles such as cars, vans, pickups or panel trucks used for business purposes. It should be used when figuring the deductible costs of operating a vehicle for business purposes.
The standard mileage rate may also be used to calculate the deductible expenses if you are self-employed and use your personal vehicle in your business activities.
Businesses should keep careful records when using their vehicles for work-related activities, including detailed logs that include dates, distances traveled and purpose of trip.
This will make it easier to calculate deductions come tax time.
It’s important to note that if you choose to deduct actual expenses instead of using the standard mileage rate, you may not be able to take both deductions in one year. Businesses must decide which deduction works best for them in order to maximize their savings.
Conclusion
What Is the Current Mileage Rate for Business Travel?
The current standard mileage rate set by the Internal Revenue Service (IRS) for business use of a car is 56 cents per mile for 2020. This rate applies to all types of vehicles used for business purposes and should be used when figuring deductible costs. Businesses should keep careful records when using their vehicles for work-related activities in order to maximize their savings come tax time.