IRS drops business mileage rate drops to 5-year low
You may have some disgruntled business travelers after you announce this.
It won’t be the happiest new year for your company’s road warriors. IRS recently released the standard mileage rate for 2016, and they cut it by almost 10%.
You can now reimburse employees tax-free at the rate of 54 cents per mile. That’s down from the 57.5 cents you could offer them in 2015.
Of course this change is a direct result of gas prices being down, but you can bet employees won’t want to hear about that. All they’ll see is that they’re getting less each time they hit the road. So tell A/P to prep for some griping … and to bounce back expense reports that try to claim the old rate.
You can reimburse less here too
That’s not the only area where employees will receive less per mile: IRS also lowered the moving and mileage rate to 19 cents (down from 23 cents for 2015).
The only rate that escaped the chopping block? The charitable one, holding at 14 cents per mile.
Comparison through the years
In 2015 and 2014 respectively, the rates for business travel were 57.5 and 56 cents per mile.
You have to go back to 2011 to get to a rate lower than the 2016 rate. It was 51 cents per mile then.
Likewise, the medical and moving mileage rate is down from the 2015 rate of 23 cents per mile.
The last time the rate hit 19 cents per mile was 2011.
