The Internal Revenue Service has issued their 2020 standard mileage rates. Used these rates to calculate the deductible costs of operating your food truck. As of Jan. 1, 2020, these 2020 standard mileage rates are for the use of your food truck or other vehicles used to operate your your mobile food business.

2020 Standard Mileage Rates For Food Trucks

  • 57.5 cents per mile for business miles driven, down from 58 cents in 2019.
  • 17 cents per mile driven for medical or moving purposes, down from 20 cents in 2019.
  • 14 cents per mile driven in service of charitable organizations, unchanged from 2019.

The business mileage rate decreased 0.5 cents for business travel driven from the rates for 2019. The charitable rate is set by statute and remains unchanged.

It is important to note that 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, with exemptions. Get more details at Notice 2020-05.

2020 Fuel Prices

According to a study by a company that tracks fuel prices called GasBuddy, it is predicted that 2020 feature lower average gas prices than in 2019.

GasBuddy reports that in 2019, the average cost for gas in the United States was $2.62 per gallon. Their prediction states that in 2020, average prices will feature a 2 cent drop to $2.60 per gallon.

Some highlights from GasBuddy’s 2020 Fuel Price Outlook include:

  • The nation’s yearly gasoline bill will fall to $386 billion dollars. A drop of $2.5 billion over last year as the average household sees their annual gasoline spending fall slightly to $1,991, down $25 from 2018.
  • Over 75% of the country’s largest metro areas are at risk for seeing average prices hit $3 per gallon. Including:
    • Atlanta
    • Boston
    • Chicago
    • Cleveland
    • Detroit
    • Miami
    • New York City
    • Philadelphia
    • Phoenix
    • Washington, D.C

Other Options

Taxpayers also have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

RELATED: 5 Tips To Get Your Food Truck Taxes In Order

The Bottom Line

These and other requirements are described in Rev. Proc. 2010-51. Notice 2018-03, posted on IRS.gov, contains the standard mileage rates. These are the amounts a taxpayer must use in calculating reductions. It also includes the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

If you have any additional questions relating to these 2020 standard mileage rates, speak with your accountant.

DISCLAIMER: Mobile Cuisine and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisers before engaging in any transaction.