If you’re like most taxpayers, you’re hoping to save as much as possible on your returns each year. That being said, you still want to be a law-abiding citizen! Fortunately, the standard mileage deduction gives you the best of both worlds. You can get reimbursed for certain travel expenses, and feel good knowing that’s completely legal.

Changes to the 2020 Mileage Rates

This new year is bringing a few updates to both the business and personal mileage rates. Whereas 2019 allowed for 58 cents per business travel mile, 2020 is lowering that rate by 0.5 cents to 57.5 cents. Medical and moving mileage rates are also dropping. They are now at 17 cents per mile instead of 20 cents. Mileage for charitable work, however, is remaining steady at 14 cents per mile.

Please be aware, though, that these notes are for the standard mileage deduction. The documentation for “actual vehicle expenses” can be a little more complicated, so it is often helpful to talk with your tax specialist to see whether they recommend that tracking method for your situation.

Tips for Accurately Tracking Your Miles

Now that you know what the 2020 mileage rates look like, it’s time to review your process for tracking those trips. You’ll need to document your miles correctly in order to get those tax benefits. And it’s not always as easy as you might think! Whether you’ve been tracking your mileage for years or you’re just beginning, it always helps to have a quick refresh on the best practices. These general rules for logging your standard mileage deduction can help:

1. Check the Qualifications

First things first: taxpayers can only take the mileage deduction for certain driving trips. For example, you cannot count the miles you drive from home to the office. Instead, you track the miles you drive from the office to a work site, a second place of business, or some other business meeting or errand. In other words, you track the miles you travel during the workday itself—not the driving you do before and after your working hours, or when you’re going to and from home.

2. Maintain a Driving Log

The next thing to consider is how you’ll actually keep track of all your mileage details. Some individuals choose to work with a mileage app. That way, their phone’s GPS system can monitor how far they’re traveling during their business day (or those other personal trips that are tax-deductible). You can also create a log just by jotting down the odometer reading before and after each trip. Then you’ll be able to come up with a mileage total at the year’s end.

3. Confirm Your Details

Whether you’re using the standardized deduction for your mileage total or you’re working with the “actual expenses” method, it’s always a good idea to double-check your math. If the IRS comes back and asks you to support your mileage deduction, you’ll want to be sure that you have the proper documentation.

If you need help along the way, calling on a tax specialist or CPA can help you stay in the clear—and ensure you’re getting what you’re owed on your return. Please feel free to call on our team here at NSO and Companywhenever you’re ready to learn more or get started on your filing. We’ll be happy to schedule a personal consultation when you give us a call at (317) 588-3131.