IRS and Congress were both busy in December. I will start the new year with the new 2016 mileage rates released on December 17, 2015 by IRS. The official release is Notice 2016-01 (PDF).
The mileage rates are:
2016:
- Business 54 cents per mile
- Charitable 14 cents per mile
- Medical 19 cents per mile
2015:
- Business 57.5 cents per mile
- Charitable 14 cents per mile
- Medical 23 cents per mile
Congress sets charitable mileage rate
Notice that the rate for using a vehicle to provide charitable services did not change. We can thank Congress for that as the amount is included in the actual law and IRS has no authority to change it based upon market conditions. Considering the drop in gas prices in 2015 compared to 2014, the declines should not be a surprise.
Mileage record keeping rules
You can read about the record keeping rules in this post – Business mileage deduction vs. commuting. You can learn about an app to track mileage from this post – Mileage logs stink – try an app. Keeping the required records can be a pain but failure to do so means you lose the deduction. Without the records, IRS is required by law to disallow the deduction.