The Internal Revenue Service has announced new mileage rates for 2021 for use in calculating reimbursements or deductions for tax purposes:
- Business use: 56 cents a mile, down from 57.5 cents a mile in 2020
- Medical use: 16 cents a mile, down from 17 cents a mile in 2020
- Moving use: 16 cents a mile, down from 17 cents a mile in 2020
- Charitable use: 14 cents a mile, the same as in 2020
Additionally, the standard vehicle cost, used to calculate FAVR (Fixed and Variable Rate) programs, may not exceed $51,100, up from $50,400 in 2019 and 2020.
To read more, IRS Notice 2021-02 may be found on the IRS website: irs.gov/pub/irs-drop/n-21-02.pdf.
Let’s connect and we’ll show you how a FAVR (Fixed and Variable Rate) plan can reduce cost when compared to the IRS rate for business use.