2019 Tax Filings: Business Mileage Deductions and Educator Expenses
IRS rules provision businesses with the opportunity to deduct the entire cost of operating a vehicle for business purposes. Alternatively, entrepreneurs can use the business standard mileage rate, subject to some specific exceptions. The mileage deduction is calculated by multiplying the standard mileage rate with the number of business miles traveled. Self-employed individuals also may use the standard rate, as can employees whose employers do not reimburse, or only partially reimburse, them for business miles driven.
Many taxpayers use the business standard mileage rate to help simplify their recordkeeping. Using the business standard mileage rate takes the place of deducting almost all of the costs of your vehicle. The business standard mileage rate takes into account costs such as maintenance and repairs, gas and oil, depreciation, insurance, and license and registration fees.
Beginning on January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) is:
- 57.5 cents per mile for business miles driven, down from 58 cents for 2019
- 17 cents per mile driven for medical or moving purposes, down from 20 cents for 2019
- 14 cents per mile driven in service of charitable organizations, no change from 2019
Mileage related to unreimbursed business expenses and moving expenses are limited to certain taxpayers as a result of the Tax Cuts and Jobs Act for taxable years 2018 through 2025.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers may have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. If instead of using the standard mileage rate you use the actual expense method to calculate your vehicle deduction for business miles driven, you must maintain very careful records. You must keep track of the actual costs during the year to calculate your deductible vehicle expenses. One of the most important tools is a mileage log book.
Tax Deductions for Teachers with Educator Expenses
Now that tax season is here, many teachers are looking for tax deductions for the expenses from dipping into their own pockets to buy classroom supplies. Doing this throughout the year can add up fast. For those who have already filed, fortunately, eligible educators may be able to defray qualified expenses they paid in 2020 when they file their tax return in 2021.
Educators who work in schools may qualify to deduct up to $250 of unreimbursed expenses. That amount goes up to $500 if two qualified educators are married and file a joint return. However, neither spouse can deduct more than $250 of his or her qualified expenses when they file.
Taxpayers qualify for this deduction if they:
- Teach any grade from kindergarten through twelfth grade.
- Are a teacher, instructor, counselor, principal or aide.
- Work at least 900 hours during the school year.
- Work in a school that provides elementary or secondary education.
Qualified expenses include:
- Professional development courses;
- Computer equipment including related software and services;
- Supplementary materials, and;
- Athletic supplies only for health and physical education.
Eligible taxpayers can claim this deduction when they file their taxes. We encourage teachers to consider tracking their qualified education expenses incurred throughout the school year to obtain this easy tax filing deduction.