HSA

The IRS has released the new mileage reimbursement rates for 2020.   For business related travel, the new rate is $0.575 per mile (down from $0.58 last year).  Driving for medical may be deducted at $0.17/mile (down from $0.20 in 2019) and mileage for service to a charitable organization is unchanged at $0.14/mile. Mileage for moving expenses is no longer deductible.

You also have the option of calculating the actual costs of using your vehicle instead of using the standard mileage rate.

Remember – under the new tax law, miscellaneous deductions (which includes unreimbursed employee expenses and home office deductions) are no longer deductible.  Therefore, we recommend that employees get reimbursed for business mileage and other business expenses.  If, however, you file form schedule C, you can still deduct the mileage and home office deductions.  This applies to self-employed individuals.

The 2020 HSA contribution limits increased to $3,550 for an individual and $7,100 for a family.  If you are 55 or older, you can contribute an additional $1,000.  If you have a qualifying high deductible health insurance plan, this is a great opportunity to pay for medical expenses with pre-tax dollars.  Unused funds can accumulate and be used to cover medical expenses during retirement.