IRS lowers standard mileage rates for 2021

Employers who reimburse employees for business mileage will notice a slight drop in the 2021 standard mileage rates set by the Internal Revenue Services (IRS):

• 56 cents per mile driven for commercial use of cars, vans, pickups, and panel trucks, down from 57.5 cents,
• 16 cents per mile driven for medical and/or moving purposes for qualified active-duty members of the Armed Forces, down from 17 cents, and
• 14 cents per mile driven in service for charitable organizations, which remains unchanged.

The IRS configures the standard mileage rate annually by looking at both variable and fixed costs associated with operating a business automobile. The rate for medical and moving is based on variable costs. The rate for charitable organization is set by statute.