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November 18, 2022 - 2 min read

The IRS Mileage Rate 2021

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The 2021 mileage reimbursement rate was announced by the IRS on Dec 22nd, 2020, setting the 2021 mileage rate at 56 cents per mile - down 1.5 cents from 2020.

The rates for medical and moving dropped to 16 cents per mile, while the rate for charity mileage remains the same at 14 cents per mile.

Log your business travel and calculate your reimbursements automatically. The Driversnote mileage tracking app is always up to date on laws and the IRS mileage rates.

IRS mileage rate 2021

The IRS has lowered the cents per mile reimbursement for business, medical and moving mileage, while charity mileage remains deductible at the same rate.

  • $0.56 per mile for business-related driving
  • $0.16 per mile for medical purposes
  • $0.16 per mile for moving (only for Armed Forces on active duty)
  • $0.14 per mile for charity mileage

Be aware that the 2021 mileage rate is optional — both your state and employer may use different rates.

The IRS's announcement came on Dec 22nd, 2020 and has additional information about mileage rates and how they apply. You can use the IRS mileage rate 2021 to calculate your mileage reimbursement for 2021. Keep in mind that the business mileage rate 2020 only applies to trips taken in the 2020 year.

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What does the federal mileage rate 2021 cover? 

The federal mileage rate 2021 takes into account both the variable and fixed costs of operating a vehicle, such as gas, oil, tires, maintenance, and repairs, as well as the fixed expenditures, such as insurance, registration, and depreciation or lease payments. Parking and tolls are not included in the mileage reimbursement rates. For any trips taken before January 2021, you should be using the federal mileage rate 2020 which was $0.575 per mile driven for business. 

The federal mileage rates in 2021 for charity, medical and moving-related driving

The charity mileage rate for 2021 is 14 cents per mile, while the 2021 milege rate for medical and moving mileage is 16 cents per mile.

FAQ

Use the federal 2021 mileage rate to claim mileage for all business trips you complete in 2021. Multiply all qualified business miles by the mileage rate to figure out the deduction you can receive. Finally, include the deduction in your tax filing in 2022, when you will be able to claim tax for 2021.
The IRS changes the mileage rate almost every year, with rare cases when the rate is the same for a couple of years in a row. This is due to how the rate is calculated. The IRS takes into consideration all factors of owning and operating a vehicle, which differs from year to year. Since the mileage rate is meant to cover all costs of owning and running a vehicle for its business use, rates are adjusted to these costs.
The 2020 IRS mileage rate for cars (including vans, pickups, and panel trucks) was $0.575 per business mile. Make sure to use the 2021 mileage rate for the business mileage you drive after January 1st, 2021.

How to automate your mileage logbook

Manually filling out your logbook can get tedious - see how to automatically track trips for your mileage reimbursement or deductions.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for, legal, tax or accounting advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal, tax or accounting advisor.
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