The Internal Revenue Service recently announced the 2016 optional standard mileage rates, which features lower amounts than 2015.
Starting January 1, 2016 the rates will be:
- 54 cents per mile for business miles driven. This is a decrease from 2015 (57.5 cents per mile).
- 19 cents per mile for medical or moving purposes. This is a decrease from 2015 (23 cents per mile).
- 14 cents per mile driven in service of charitable organizations. This is a fixed rate by Congress.
The rate for business miles driven is based on fixed and variable costs of operating a vehicle. For example, variable costs include gas, oil and maintenance, and fixed costs include insurance, depreciation, and registration fees. The medical/moving rate is based only on variable costs (gas and oil).
The lower mileage rate reflects the decrease in gas prices nationwide.
It should also be noted that taxpayers may use the actual costs of using their vehicle instead of the standard mileage rate.
For the full announcement, click here. For more information on the 2016 standard mileage rates, please contact Brian McFarren at (231) 726-5815 or firstname.lastname@example.org.
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