The IRS issued the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Beginning on January 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
(1) 54 cents per mile driven for business purposes;
(2) 19 cents per mile driven for medical or moving purposes; and
(3) 14 cents per mile driven in service of charitable organizations.
While the business rate decreased by 3.5 cents, the medical, and moving expense rates decreased 4 cents from the 2015 rates. The charitable rate is a fixed statutory amount that does not change from year to year.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Code Sec. 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.
These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51.
At Caro & Associates, we understand the importance of taking action with a small business and that even smallest measures, like our optometry bookkeeping services, can impact your business’ bottom line and contribute to its success.
Managing your optometric practice with modern electronic health record (EHR) and point of sale (POS) systems is one of the most critical parts of running a successful and efficient practice.
Whether you have just opened an optometry practice, or you are looking to improve the efficiency and financial health of your existing practice, using metrics to improve your bottom line is the best strategy to track noticeable growth.