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Charitable Planning- standard Mileage Decreased for 2016

On December 17, 2015, the Internal Revenue Service issued the 2016 standard mileage rates used to calculate the deductible costs of operating an automobile for medical and charitable purposes (as well as business and moving expenses).

Beginning on Jan. 1, 2016, the standard mileage rates will be:

  • $0.19 cents per mile driven for medical purposes
  • $0.14 cents per mile driven in service of charitable organizations
  • $0.54 cents per mile for business miles driven
  • $0.19 cents per mile driven for moving purposes

EXAMPLE:Stuart of Smithtown, NY did volunteer work for a local Hauppauge, NY charity. During the course of doing his volunteer work in 2016 Stuart drove his car 1,000 miles. Stuart may claim a contribution deduction of $140.00.

EXAMPLE 2: Same facts as above, but Stuart also incurred tolls and parking fees throughout 2016. Stuart may claim a contribution deduction of $140.00 plus tolls and parking fees.

EXAMPLE 3: Carl of Commack, NY does volunteer work for a local charity. During the course of his volunteer work in 2016 he drove his car 1,000 miles and he also kept a detailed log of his actual vehicle operating costs such as gas and oil which totaled $250.00. Carl may claim a contribution deduction of $250.00 (the greater of actual costs versus the standard mileage rate). A taxpayer is not required to use the standard rate, but instead may substantiate using actual allowable expense amounts if the taxpayer maintains adequate records or other sufficient evidence. i

Except for the mileage rates for miles driven in service of charitable organizations, the standard mileage rates decreased from 2015 to 2016. The changes in the standard mileage rates are:

  • Medical purposes: $0.19 cents down from $0.23 cents in 2015.
  • Business purposes: $0.54 cents down from $0.57½ cents in 2015.
  • Moving purposes: $0.19 cents down from $0.23 cents in 2015.

Aaron E. Futterman, CPA, Esq. is a partner in the law firm of Futterman & Lanza, LLP with offices in Smithtown, NY and clients throughout Suffolk, Nassau, Queens, Brooklyn, Bronx, Richmond, New York, Westchester and Rockland Counties. He concentrates his practice to Elder Law, Medicaid Planning, Medicaid Applications, Estate Planning, Probate, Estate Taxes, and Estate Administration.

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