The IRS released updated mileage rates for tax year 2021. Effective January 1, 2021 the standard mileage rates for the business use of an automobile will be 56 cents per mile, down from 57.5 cents per mile in 2020. Medical or moving mileage is 16 cents per mile in 2021, down from 17 cents per mile in 2020. The charitable mileage rate remains at 14 cents per mile.
Forms W-2 and 1099s are due to be filed on or before February 1, 2021. Payments of nonemployee compensation are required to be reported on the new Form 1099-NEC, effective for the 2020 tax year. The due date for furnishing a Form 1099-NEC is also February 1. The IRS relies on businesses to file correct and timely Forms 1099 to provide information to ensure tax compliance by independent contractors. Failure to file the information returns and/or late filing returns carries very stiff penalties. Call or email our office if you need help preparing your Forms 1099.