The Internal Revenue Service (IRS) issued the standard mileage rate for 2021 to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purpose.
Standard Mileage Rates for the beginning on January 1, 2021 for the uses of car, vans, pickups or panel truck will be:
56 cents per mile driven for business use, down 1.5 cents from the rate for 2020
14 cents per mile driven in service of charitable organizations, the rate is set by statute and remains unchanged from 2020
16 cents per mile driven for medical or moving purposes for qualified active duty members of the Armed Forces, down 1 cent from the rate for 2020
The standard mileage rate for business use 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.
Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses.
Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces.
This year is end in a week. A spike in COVID-29 cases and related restrictions and shutdown, more people have been laid off and millions of people have received jobless help and benefit.
Don’t miss out!!!
Before 2020 is over, we still have time to gain some financial relief to help reduce the effects of the pandemic.
Paid sick leave
Fully refundable tax credits are available, as part of the Families First Coronavirus Response Act.
Up to $511 per day, or
$200 per day if caring for a family member or children if school is closed.
Paid family leave
One provision of FFCRA is fully refundable tax credits equal to two-thirds of the employee’s regular pay.
Up to $200 per day, for an employee to care for a child due to school or place of care closure.
Employee Retention Credit
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides a fully refundable credit that is 50% of qualified wages.
$10,000, for a maximum credit per employee of $5,000 paid from March 13 – Dec. 31, 2020.
Important notes about COVID-19 tax credits:
For businesses to receive the credits, wages paid must occur by Dec. 31, 2020 or earlier.
If a Paycheck Protection Program loan was taken, the employer would not be eligible for the Employee Retention Credit.
Employers who choose to file one or more Forms 7200 to request an advance payment of the tax credits, the last day to file is either Feb.1, 2021, or the date employer’s Forms 941 are filed for forth quarter 2020, whichever is earlier. Any Forms 7200 received after that date will be rejected by the IRS
EJK is ringing in the New Year with Jaye Kubo, our new tax preparer. While Randy Lake enjoys the luxuries of retirement, Jaye will lead our tax department, and work with clients to prepare both personal and business returns.
Jaye joins EJK with 20 years of experience in public accounting and private practice. She focuses on comprehensive tax planning, consulting and compliance services to corporate and partnership clients and their owners as well as not-for-profit organizations. Jaye will also assist with federal and state tax compliance, IRS negotiations, and organizational mergers. Learn more about Jaye’s experience here.
We will miss Randy’s can-do attitude, and congratulate him on retirement!