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IRS Announces 2016 Standard Mileage Rates
On December 17, 2015, the Internal Revenue Service (IRS) issued the 2016 standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning January 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 1) 54 cents per mile for business miles; 2) 19 cents per mile for medical or moving purposes; and 3) 14 cents per mile driven in service of charitable organizations.
These changes appear to reveal a decrease from 2015 rates. For example, the 2015 standard rate for business miles driven decreased from 57.5 cents per mile to 54 cents per mile (a 3.5 cents difference). According to the IRS, the standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Businesses commonly use the standard mileage rate to appropriately reimburse their employees for the use of their personal vehicle for business-related activities. Use of the standard rate helps businesses avoid reimbursing employees for the actual costs of maintaining their vehicle.
You can view the IRS' announcement by accessing the web link provided below.