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New Federal Mileage Rates

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May 3  |  IRS News  |   admin

For 2020, the IRS has reduced the deductible mileage rates by 1/2 cent per mile for Business and Medical purposes.

Federal Mileage Rate in 2019 was 58 cents per mile for business miles driven, up from 54.5 cents in 2018. 20 cents per mile driven for medical or moving purposes, up from 18 cents in 2018. It is also 14 cents per mile driven in service of charitable organizations.

For IRS purposes, the deductible medical mileage rate in 2020 has been adjusted to to 17 cents per mile driven for medical or moving purposes, this is a decrease from 2019 by ½ cents per mile.  The deductible mileage rate for charitable deductions remained unchanged from 2019 at 14 cents per mile .

2020

2019

Business

57.5 cents per mile

58.0 cents per mile

Medical

17 cents per mile

20 cents per mile

Charitable

14 cents per mile

14 cents per mile

For 2019 Tax Returns, you can deduct expenses that relate to your work as an employee if any of the following apply to you:

  • Qualified performing artist

  • Fee-basis state or local government official

  • Armed forces reservist

  • Impairment-related work expenses

  • Your employer entered code “L” for box 12 of your W-2

Deductible business use of your car does not cover normal commuting to your usual place of work. Qualified deductible business use includes:

  • Driving to a business meeting away from your usual workplace

  • Meeting clients or customers

  • Getting from your home to a temporary workplace

  • Getting from your regular workplace to a second workplace, for the same job or business

Expenses for primary transportation to medical care facilities that qualify as medical expenses are:

  • Actual fees or fares for a taxi, bus, train, or ambulance

  • Out-of-pocket expenses for using your own car, or the standard mileage rate

  • Fees for tolls and parking

Qualified performing artist – An artist that meets the following requirements:

  • Performed in the performing arts as an employee for at least two employers during the last tax year.

  • Received at least $200 in wages from each of the two employers.

Fee-basis – An agreed amount for a single job regardless of the time required to complete the job.

Impairment related work expenses – Expenses incurred from the purchase or payment related to special equipment, training, or anything else related to your ability to perform work with your impairment.

W-2 Box 12

W-2 Box 12 Codes:

  • A — Uncollected Social Security or RRTA tax on tips. Include this tax on Form 1040 Schedule 4 line 58.

  • B — Uncollected Medicare tax on tips. Include this tax on Form 1040 Schedule 4 line 58.

  • C — Taxable cost of group-term life insurance over $50,000 (included in W-2 boxes 1,3 (up to the Social Security wage base), and box 5.

  • D — Elective deferral under a 401(k) cash or arrangement plan. This includes a SIMPLE 401(k) arrangement.

  • E — Elective deferrals under Section 403(b) salary reduction agreement.

  • F — Elective deferrals under Section 408(k)(6) salary reduction SEP.

  • G — Elective deferrals and employer contributions (including non-elective deferrals) to a Section 457(b) deferred compensation plan.

  • H — Elective deferrals to a Section 501(c)(18)(D) tax-exempt organization plan.

  • J — Nontaxable sick pay (information only, not included in W-2 boxes 1, 3, or 5).

  • K — 20% excise tax on excess golden parachute payments.

  • L — Substantiated employee business expense reimbursements (nontaxable).

  • M — Uncollected Social Security or RRTA tax on taxable cost of group-term life insurance over $50,000 (former employees only).

  • N — Uncollected Medicare tax on taxable cost of group-term life insurance over $50,000 (former employees only).

  • P — Excludable moving expense reimbursements paid directly to a member of the U.S. Armed Forces. (not included in Boxes 1, 3, or 5)

  • Q — Nontaxable combat pay. See the instructions for Form 1040 or Form 1040A for details on reporting this amount.

  • R — Employer contributions to your Archer medical savings account (MSA). Report on Form 8853:, Archer MSAs and Long-Term Care Insurance Contracts.

  • S — Employee salary reduction contributions under Section 408(p) SIMPLE. (Not included in Box 1).

  • T — Adoption benefits (not included in Box 1). Complete Form 8839:, Qualified Adoption Expenses, to compute any taxable and nontaxable amounts.

  • V — Income from exercise of nonstatutory stock option(s) (included in Boxes 1, 3 (up to the Social Security wage base), and 5). See Publication 525, Taxable and Nontaxable Income, for reporting requirements.

  • W — Employer contributions (including amounts the employee elected to contribute using a Section 125 cafeteria plan) to your health savings account (HSA).

  • Y — Deferrals under a Section 409A nonqualified deferred compensation plan.

  • Z — Income under a nonqualified deferred compensation plan that fails to satisfy Section 409A. This amount is also included in Box 1 and is subject to an additional 20% tax plus interest. See Form 1040 instructions for more information.

  • AA — Designated Roth contribution under a 401(k) plan.

  • BB — Designated Roth contributions under a 403(b) plan.

  • CC — For employer use only.

  • DD — Cost of employer-sponsored health coverage.

  • EE — Designated Roth contributions under a governmental 457(b) plan. This amount doesn’t apply to contributions under a tax-exempt organization Section 457(b) plan.

  • FF — Permitted benefits under a qualified small employer health reimbursement arrangement.

  • GG — Income from qualified equity grants under section 83(i).

  • HH — Aggregate deferrals under section 83(i) elections as of the close of the calendar year.

Related posts:

  1. New Standard Mileage Rates Now Available; Business Rate to Rise in 2015
  2. 2019 Tax Law Changes
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