2016 MILEAGE RATES RELEASED

2016 MILEAGE RATES RELEASED

The IRS has announced that the optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) will decrease to 54¢  per mile for business travel after 2015. This rate can also be used by employers to provide tax-free reimbursements to employees who supply their own autos for business use, under an accountable plan, and to value personal use of certain low-cost employer-provided vehicles. Additionally, the rate for using a car to get medical care or in connection with a move that qualifies for the moving expense will decrease by 4¢ to 19¢ per mile. The mileage rate for driving an auto for charitable use (14¢ per mile) is a statutory rate that’s not adjusted for inflation.

IRS generally adjusts the standard mileage rate annually, based on a yearly study of the fixed and variable costs of operating an auto. However, IRS has in some cases also made mid-year adjustments when necessary to better reflect rapidly changing costs of operating an vehicle. While it is more common for reimbursement rates to rise along with rising costs of operating a vehicle, plummeting fuel costs have recently decreased the overall cost of vehicle operation, resulting in a rare decrease in the statutory reimbursement rate.

When the new rates are effective. The revised standard mileage rates apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes on or after Jan. 1, 2016, and to mileage allowances or reimbursements that are paid to an employee or charitable volunteer (1) on or after Jan. 1, 2016, and (2) for transportation expenses paid or incurred by the employee or charitable volunteer on or after Jan. 1, 2016.

If you have any questions, please contact your Aliign representative.

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