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IRS has Issued the 2016 Optional Standard Mileage Rates


The Internal Revenue Service (IRS) has issued the 2016 optional standard mileage rates and beginning on January 1, 2016, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
  • 54 cents per mile for business miles driven (down from 57.5 cents in 2015)
  • 19 cents per mile driven for medical or moving purposes (down from 23 cents in 2015)
  • 14 cents per mile driven in service of charitable organizations (fixed by Congress, never adjusted for inflation)
If you’re wondering about the difference in the rates for business and medical or moving purposes, there’s a reason: the standard mileage rate for business is calculated using an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil while the rate for medical and moving purposes is based on the variable costs, such as gas and oil. Inflation is edging many tax items – other than mileage – up a tiny bit.
The dips in mileage rates for 2016 reflect lower gas prices nationwide. According to AAA, U.S. drivers are paying the lowest average price for regular unleaded gasoline since 2009 with the national average holding at $1.99. On average, taxpayers are paying 79 cents per gallon less than they did in 2015.
For more information regarding the 2016 optional standard mileage rates, click here.

     

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