IRS Announces New Mileage Reimbursement Rates
Starting in 2016, the Internal Revenue Service will lower the standard mileage rates for business purposes to 54 cents per mile, down from 57.5 cents in 2015.
Spokesman Will Brunson said the agency relies on an annual survey conducted by an independent contractor to set rates. The study looks at fixed costs such as depreciation, insurance and registration as well as variable costs including routine maintenance, repair and gas.
"If you see a sharp rise in the prices, that could affect this rate," Brunson said. "Conversely, the other way, when you have lower gas prices, it could affect this rate."
According to AAA Arizona, December gas prices haven’t been this low since 2008.
The standard mileage rates for medical and moving purposes will be 19 cents per mile in 2016, down from 23 cents in 2015.The charitable rate, which is set by law, remains unchanged at 14 cents per mile.
Taxpayers also have the option of calculating actual costs of using their cars, vans and trucks instead of using the standard rates set by the IRS. More details on the new rates, eligibility requirements and documentation can be found at the agency's website.