2016 IRS Mileage Rates Decrease

IRS pic

IRS
Image: smallbiztrends.com

Larry Soldinger is a managing partner and the founder of LJ Soldinger Associates, an accounting and tax firm. Larry Soldinger helps clients file their tax returns and navigate new IRS rules and changes to the tax code.

One change coming in 2016 is a decrease in the official mileage rates the IRS will allow taxpayers, who can deduct mileage when they use a vehicle for business, medical, or charitable purposes or when moving. The rate in 2016 is 54 cents per mile when a car is driven for business. However, this is a decrease of 3.5 cents per mile from the rate in 2015.

According to the IRS, the rates are based on an independent third-party study of the overall cost of vehicle operation. While many people are disappointed, it comes as no surprise that the mileage rate has decreased. This is because the rate should reflect a decrease in gas prices.

There are many contingencies regarding mileage deductions. It is important to consult a tax professional, like those at LJ Soldinger Associates.

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