Standard Mileage Rates Will Fall in 2016*

For 2016, the IRS has announced a decrease in the optional standard mileage rates for business use of a vehicle (car, van, pick-up truck, or panel truck), as well as a decrease for driving for medical or moving purposes. 

·  Vehicle (car, van, pick-up truck, or panel truck) – 54 cents/mile in 2016 versus 57.5 cents/mile in 2015 

·  Driving for medical or moving purposes – 19 cents/mile in 2016 versus 23 cents/mile in 2015 

The service to charitable organizations rate, however, remains the same at 14 cents/mile. And, the portion of the business standard mileage rate treated as depreciation remains the same at 24 cents/mile in 2016.

Finally, for purposes of computing the allowance under a fixed and variable rate plan (FAVR), the maximum standard automobile cost decreases $200 to $28,000 in 2016 (from $28,200 in 2015) for automobiles (excluding trucks and vans) and increases $200 to $31,000 for trucks and vans in 2016. 

For more information, please call the office of Ronald Castor LC at 913.469.9113.

*Source: Journal of Accountancy, 12/17/2015