WASHINGTON — The Internal Revenue Service today issued the 2020 optional standard mileage rates (PDF) used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
57.5 cents per mile driven for business use, down one half of a cent from the rate for 2019,
17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and
14 cents per mile driven in service of charitable organizations.
The business mileage rate decreased one half of a cent for business travel driven and three cents for medical and certain moving expense from the rates for 2019. The charitable rate is set by statute and remains unchanged.
It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details, see Rev. Proc. 2019-46 (PDF).
The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than five vehicles used simultaneously. These and other limitations are described in section 4.05 of Rev. Proc. 2019-46 (PDF).
Notice 2020-05 (PDF), posted today on IRS.gov, contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan. In addition, for employer-provided vehicles, the Notice provides the maximum fair market value of automobiles first made available to employees for personal use in calendar year 2020 for which employers may use the fleet-average valuation rule in § 1.61-21(d)(5)(v) or the vehicle cents-per-mile valuation rule in § 1.61-21(e).
Shopping domestic and international locations since 2003.
I put the new rate into my spreadsheet the other day. I assume that the rate went down because the cost of gas tended to drop throughout most of 2019. There have been years when there have been mid-year adjustments (up in 2008 and 2011). My records don't go back before 2008.
Shopping Southeast Pennsylvania, Delaware above the canal, and southwestern NJ since 2008
I'm a newbie & was wondering if I should start keeping track of my mileage. Most of the shops that I do are in places that I'm going to anyways for my personal day to day stuff. Should I still document my mileage? If so, any tips on the best ways to document my mileage? Do I have to keep separate mileage for each MSC? I have a full time job & I'm just doing MS to help payoff a CC faster. However just in the last month, I've already earned $110 with one company. At this rate, I will hit the $600 mark for W9 reporting with this MSC in no time. Granted I could stop before that happens, but that would leave easy $$ on the table.
Walters Mom...why stop before you reach $600? You still need to report all of your income, even if it's less than $600, so you might as well keep on keeping on. You should keep track of your mileage as it's a good write off against taxes, but remember you can't count the mileage to/from your day job...only to/from MS jobs that would be in addition to travel to your day job. You should keep a log and add it to each mystery shop you do to keep track.
The more I learn about people...the more I like my dog..
I use a spreadsheet. I write the mileage on whatever form I have with me for each shop, as well as, other expenses like tolls or purchases. When I get home, I add the info to my spreadsheet on my computer. I sort of like that part of the business...organizing my spreadsheet and keeping it up to date. Maybe it's a weird sense of accomplishment or more likely adding up the $$$ that will be coming in....bahaha
The more I learn about people...the more I like my dog..
Edited 1 time(s). Last edit at 01/08/2020 02:29AM by MsJudi.
Thanks MsJudi. I downloaded a mileage app and created a spreadsheet. Only question I have is do I track mileage to the 1st MS job and then the mileage home after the last MS job? I'm finding conflicting info.
To be specific, IRS requires the record to be "contemporary". I keep a tiny notebook in my car, and write business mileage in it daily. This meets the IRS requirement, and is quite easy to recap at year-end.
I'm a tech dinosaur; all this talk of spreadsheets and stuff really doesn't mean anything to me. I have exquisite recordkeeping; it's just NOT digital!
WaltersMom, there is NO conflicting info. If you drive 10 miles home from your full time job ordinarily, and MSing adds 30 miles to that, you deduct the 30 miles ONLY. Your "regular commute" is in no way, ever, deductible.
Sorry for not clarifying. I'm talking about a day that I'm only doing MS jobs, not my salary job. Do I start counting mileage as soon as I leave my house until I return OR does my mileage start at my 1st location & end at my last location?
The one I did last year, I picked up off PrestoInstaMaps. If you are not using that tool, I recommend it highly. Others in past years I did for MarketForce, but there are others. You'll find info on how to access and use Presto in the new shoppers area of the forum, in the "sticky threads" at the very top of the list of discussions.
Most of them require a W-2; you have a job, so you would qualify. You are NOT allowed to tell the tax preparer that your 1099 income is from mystery shopping; you just take them the totals off your 1099s, if you receive any. If they say they need to see the 1099s, just say, "Oh, I've listed all the totals. I work for many different companies, and didn't bring the 1099s. I didn't realize you'd need to see them. Always before, I've just listed the totals, and it's never been a problem." You're an "independent consultant", and the code they usually put in is 999999 (however many digits as are required).
Again, the ONLY tax advice you should take off an internet forum is "consult a tax pro".
Especially consider this: You can call the IRS five times and ask 5 different people the same question, and receive 5 different answers. And NONE of the answers are binding on the IRS UNLESS you get it in writing.