2016 MILEAGE RATES ANNOUNCEDWhitney Irish
Posting by Sarah McCraine
The IRS has announced the 2016 standard mileage rates effective for mileage driven on or after January 1st, 2016. The optional standard mileage rate multiplied by the number of miles driven is a simplified method commonly used to calculate the deductible cost of using a vehicle for business purposes. In addition, the rates can be used to calculate the deductible mileage allowed for attending medical appointments, moving, or when driving to serve with a charity.
The 2016 rates are as follows:
- Business Mileage can be deducted at 54 cents per mile, reduced from 57.5 cents per mile in 2015. The rate is reviewed annually and is based on fixed and variable costs of operating a vehicle.
- Medical and Moving Mileage can be deducted at 19 cents per mile, reduced from 23 cents per mile in 2015. The rate is reviewed annually and is based on variable costs.
- Charitable Mileage can be deducted at 14 cents per mile, there is no change to the rate as it is based on statute.
- Taxpayers have the option of using the mileage rates or using the actual cost of maintaining and operating their vehicle. Maintaining accurate records of mileage used and the cost of vehicle up keep can aid tax preparers in deciding which method will provide the greatest benefit to the taxpayer.
More information on the new published rates and limitations that may apply can be found in Notice 2016-1. Questions concerning whether using the optional standard mileage rates would be of benefit should be directed to your trusted tax advisor.