Standard Mileage Rate for Business Use of Car

Small business owners are allowed to deduct vehicle usage using actual expenses or the standard mileage rate. The standard mileage rate is a rate that takes into consideration the wear and tear of using your vehicle for business. In 2015, the standard mileage rate for business use of a car, van, pickup truck, or panel truck was 57.5 cents per mile but it will go down to 54 cents per mile in 2016.Taxpayers usually find it easier to use the optional standard mileage rates to calculate the deductible costs of operating a car. The portion of the business standard mileage rate that is treated as depreciation will be 24 cents per mile for 2016, the same as 2015.

Standard Mileage Rate for Other Purposes

Also, taxpayers who drive for medical or moving purposes may deduct at 19 cents per mile, which is four cents lower than for 2015. If driving for charitable purposes the rate remain unchanged at 14 cents per mile.

Deducting car expense on your tax return is one of those deductions that is easily overlooked. Be sure to talk to your tax professionals about miles your drove for business, medical, moving or charitable causes.