On December 22, 2020, the IRS revised the standard mileage reimbursement rates for the calendar year 2021. These rates should be used to calculate the tax-deductible costs for using a car for business, charitable, medical, and moving purposes. The most common use of these mileage rates is to reimburse employees for expenses involving use of personal cars for business purposes.
Standard Mileage Rates
Each year, the IRS announces new mileage reimbursement rates, which are linked to the fixed and variable costs of operating a motor vehicle. Nearly all changes are driven by fuel prices, which are normally measured in October of the prior calendar year.
The rates for 2021 are separated into three categories: business miles, medical / moving, and miles driven in the service of charitable organizations. These rates apply to the broadly defined term "cars," which includes passenger vehicles, sports utility vehicles or SUVs, vans, pickup trucks, and panel trucks.
The business standard mileage rate listed below does not apply if a depreciation method under the Modified Accelerated Cost Recovery System (MACRS) was applied to the vehicle. This includes vehicles that are claimed as a Section 179 deduction, for any vehicle used for hire such as a taxicab, or if more than four vehicles are owned or leased and used simultaneously; as is the case with many fleet operations.
Listed below are the rates for the calendar years 2021, 2020, 2019, 2018, and 2017.
2021 Mileage Reimbursement Rates
On December 22, 2020, the IRS announced the 2021 mileage reimbursement rates. Starting on January 1, 2021, the following rates apply to personal cars, minivans, trucks, SUVs, and panel trucks:
14.0 cents per mile driven in service of charitable organizations
16.0 cents per mile driven for medical or moving purposes
56.0 cents per mile for business miles driven
2020 Mileage Reimbursement Rates
On December 31, 2019, the IRS announced the 2020 mileage reimbursement rates. Starting on January 1, 2020, the following rates apply to personal cars, minivans, trucks, SUVs, and panel trucks:
14.0 cents per mile driven in service of charitable organizations
17.0 cents per mile driven for medical or moving purposes
57.5 cents per mile for business miles driven
2019 Mileage Reimbursement Rates
On December 14, 2018, the IRS announced the 2019 mileage reimbursement rates. Starting on January 1, 2019, the following rates apply to personal cars, minivans, trucks, SUVs, and panel trucks:
14.0 cents per mile driven in service of charitable organizations
20.0 cents per mile driven for medical or moving purposes
58.0 cents per mile for business miles driven
2018 Mileage Reimbursement Rates
On December 14, 2017, the IRS announced the 2018 mileage reimbursement rates. Starting on January 1, 2018, the following rates apply to personal cars, minivans, trucks, SUVs, and panel trucks:
14.0 cents per mile driven in service of charitable organizations
18.0 cents per mile driven for medical or moving purposes
54.5 cents per mile for business miles driven
2017 Mileage Reimbursement Rates
On December 13, 2016, the IRS announced the 2017 mileage reimbursement rates. Starting on January 1, 2017, the following rates apply to personal cars, minivans, trucks, SUVs, and panel trucks:
14.0 cents per mile driven in service of charitable organizations
17.0 cents per mile driven for medical or moving purposes
53.5 cents per mile for business miles driven
Calculating the Mileage Reimbursement Rate
The mileage rate for charitable work is set by statute. The calculation of the rates used in 2021 is based on a study conducted by Runzheimer International, under contract with the IRS.
The factors used by Runzheimer include both fixed and variable operating costs. Such costs would typically include car insurance, expenses associated with wear and tear, consumables such as gasoline, as well as characteristics of a car such as miles per gallon or fuel economy.
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