Per Diem Rates from the U.S. General Services Administration
Search by city, state or ZIP code, or by clicking on the map. You can also use the new per diem tool to calculate trip allowances
Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
Business Mileage Deduction
Deducting business miles traveled for the year in your car, truck, van and SUV expenses can slash hundreds, even thousands of dollars, off your taxes!
There are two methods for figuring your business mileage deduction:
- The Standard Mileage Rate
- Actual Expenses
The Standard Mileage Rate
To figure your business mileage deduction you multiply business miles traveled during the year by the standard mileage rate in effect for that year (rates tend to change each year). Beginning January 1, 2021, the standard mileage rate for business use of a car, van, pickup or panel truck is 56 cents per mile (down 1.5 cents from 2020)
To use the standard mileage rate, you must own or lease the car and:
- You must not operate five or more cars at the same time, as in a fleet operation
- You must not have claimed a depreciation deduction for the car using any method other than straight-line
- You must not have claimed a Section 179 deduction on the car
- You must not have claimed the special depreciation allowance on the car
- You must not have claimed actual expenses after 1997 for a car you lease.
If you start out using the standard mileage rate for a leased vehicle, you must continue using it for the entire lease period, including renewals.
Advantage of Using the Standard Mileage Rate
Unlike the actual expenses method, if you use the standard mileage rate you don't have to save receipts or compute depreciation. However, you still need to keep a mileage log regardless of the method you use to claim your vehicle deduction.
Items Included in the Mileage Rate:
The mileage rate takes into account: your vehicle's operating expenses (i.e. gas, oil, tires, repairs, maintenance and insurance. However, the following items may also be deducted, over and above you deduction for business miles:
- Tolls
- Parking fees
- Interest on a vehicle loan related to the business use
- The personal property tax portion of the vehicle's registration fee is deductible. Some states, such as Arizona, base the registration fee on the value of the vehicle, which is why it's considered a personal property tax. Other states base the registration fee on the vehicle's weight, model, year, or horsepower. Check with your DMV. The non-business portion of the personal property tax may be claimed as an itemized deduction.
You add these additional items to your mileage deduction (mileage deduction + additional items = Total vehicle deduction).
Keep in mind, regarding car loan interest and the personal property tax on your registration (if applicable), you only deduct the business-related portion. For example, if you traveled a total of 40,000 miles during the year and 24,000 miles were business-related, your business-use percentage would be 60%. If your annual car loan interest was $2,000, the deductible portion would be $1,200 (60% x $2,000).
Mileage Log
It's important to keep a mileage log. If audited you'll need it. Without written evidence of your business miles, the IRS may disallow your deduction.
Your mileage log should include:
- Dates traveled
- Names of clients/customers visited
- Business purpose of trips
- Beginning and ending odometer reading for each trip
- Total miles traveled on each trip
- Weekly and monthly summary of miles traveled
- Total annual miles traveled
Mileage Sampling
If you have a pattern of business use the IRS may allow you to record your mileage for a representative part of the year instead of the whole year, for example, four months. This may be possible if you visit the same clients and do little driving soliciting new clients.
Schedule C
Schedule C provides a place to enter specific information about your vehicle. For example, the date you placed it in service for business purposes and whether you have evidence to support your deduction. You also enter your total annual mileage, business mileage and commuting mileage (if any).
When You May Not Use the Standard Mileage Rate
You may NOT claim the IRS standard mileage Rate if you:
- Used five or more cars at the same time (such as in fleet operations)
- Claimed a depreciation deduction for the car using any method other than straight line, for example, MACRS)
- Claimed a section 179 deduction (discussed later) on the car
- Claimed the special depreciation allowance (bonus depreciation) on the car
- Claimed actual car expenses.
Switching to the Actual Expense Method
Although you may switch from the standard mileage rate to the actual expense method for the same vehicle, you may not switch from the actual expense method to the standard mileage rate for the same vehicle.
If you switch from the standard mileage rate to the actual expense method, you must use straight-line depreciation for that vehicle for its remaining recovery period, provided there is still sufficient basis remaining.
Bear in mind, the mileage allowance has built into it an allowance for depreciation. Consequently, if the depreciation portion of the mileage allowance that you've been deducting over the years would reduce the vehicle's basis to zero, no additional depreciation may be deducted for that vehicle at the time you switch to the actual expense method.
The depreciation component of the standard mileage rate is as follows:
- 26 cents per mile: 2021
- 27 cents per mile: 2020
- 26 cents per mile: 2019
- 25 cents per mile: 2018
- 25 cents per mile: 2017
- 24 cents per mile: 2016
- 24 cents per mile: 2015
- 22 cents per mile: 2014
- 23 cents per mile: 2013
- 23 cents per mile: 2012
Keep in mind, if you dispose of your vehicle, you must reduce its basis by the above rates for purposes of determining gain or loss.
Leased Vehicles
If you start using the IRS mileage allowance method for a leased vehicle, you must use it for the entire lease period, including renewals. If you use your vehicle for both business and personal use, multiply the total lease charges by your business-use percentage to find the deductible amount.