2016 Standard Mileage Rate
For 2016, the Standard Mileage Rate figures are 54¢ (Business use), 14¢ (Charitable service) and 19¢ (Medical or moving).
Effective 2016-01-01Source: Notice 2016-01 (IRS)Verified 2026-09-04
Who it applies to
Taxpayers who deduct the cost of operating a car for business, charitable, medical, or moving purposes and choose to use the standard mileage rate rather than actual expenses.
What changed this year, and why
The 2016 Standard Mileage Rates, published by the IRS in Notice 2016-1, set the optional per-mile rates taxpayers may use to compute the deductible cost of operating a car.
Common questions
- What are the 2016 standard mileage rates?
- For miles driven on or after January 1, 2016, the rates are: 54 cents per mile for business use, 14 cents per mile for charitable service, and 19 cents per mile for medical or moving use.
- How is the charitable mileage rate determined?
- The charitable standard mileage rate is set by statute under section 170(i) of the Internal Revenue Code. The business, medical, and moving rates are based on an annual study of the fixed and variable costs of operating an automobile.
What the rate covers, and what you may add to it
The standard mileage rate is meant to cover most costs of operating a vehicle: depreciation, lease payments, maintenance, repairs, gasoline, insurance, oil, and registration fees. But it does not cover everything. You may deduct business-related parking fees and tolls on top of the standard mileage rate. For example, if you drive to a client's office and pay to park there, the parking fee is separate from your mileage deduction. Tolls you pay while driving for business are also added on. Parking fees you pay to park at your regular workplace are not deductible, however; the IRS treats those as personal commuting costs, even if you use the time to make phone calls or discuss business. In short, the rate handles the per-mile wear-and-tear and fuel, while out-of-pocket parking and toll costs for business trips can be claimed separately.
Parking fees and tolls. In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls. (Park- ing fees you pay to park your car at your place of work are nondeductible commuting expen- ses.)
Publication 463 (2016), Travel, Gift, and Car Expenses (IRS)
You must choose the standard rate in the car's first year
The IRS requires taxpayers to commit to the standard mileage rate (or not) at the very start. If you own a car and want to use the standard rate, you must make that election in the first year the car is available for use in your business. You cannot use actual expenses in year one and then switch to the standard rate later for that same vehicle. In subsequent years, however, you are free to switch back and forth between the standard rate and actual expenses. For a leased car, the rule is stricter: if you use the standard mileage rate, you must use it for the entire lease period. The consequence of getting this wrong is significant. If you fail to elect the standard rate in the car's first eligible year, you lose the ability to use it for that vehicle entirely, even if you would have been better off with it. So the decision in year one is the one that matters most.
Choosing the standard mileage rate. If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your busi- ness. Then, in later years, you can choose to use either the standard mileage rate or actual expenses.
Publication 463 (2016), Travel, Gift, and Car Expenses (IRS)
Why a fleet cannot use the standard rate
The standard mileage rate is a simplified method intended for taxpayers who use a modest number of vehicles in their work. Once a business operates a fleet of multiple cars simultaneously for business purposes, the IRS requires actual expense tracking instead of the per-mile rate. The rule applies to every vehicle in the fleet, not just the ones beyond the threshold. If you own or lease enough cars that they are all in active business service at the same time, none of them qualifies for the standard rate. You must calculate depreciation, fuel, insurance, repairs, and registration for each vehicle separately. There is an important nuance: alternating use of cars at different times does not count as simultaneous business use. Seasonal vehicles or those on a rotating schedule may not trigger the restriction, as long as they are not all in service concurrently.
Five or more cars. If you own or lease five or more cars that are used for business at the same time, you can’t use the standard mileage rate for the business use of any car. However, you may be able to deduct your actual expen- ses for operating each of the cars in your busi- ness.
Publication 463 (2016), Travel, Gift, and Car Expenses (IRS)
The drive to work is never deductible mileage
The drive from home to a regular workplace is always a personal expense, no matter what you do behind the wheel. You cannot deduct the cost of a bus, trolley, subway, taxi, or car between your home and your main or regular place of work. The IRS calls these personal commuting expenses and disallows them regardless of distance. Even a very long commute is treated as a personal cost. The rule also does not bend if you are productive during the trip. Making business calls on a cell phone, discussing work with a colleague who rides along, or reading documents in a passenger seat does not convert the drive into a business trip. Only once you arrive at your regular workplace and begin driving to a second location does business mileage start. Parking fees at your regular workplace are likewise nondeductible for the same reason: they are part of the commute.
Commuting expenses. You can’t deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You can’t de- duct commuting expenses no matter how far your home is from your regular place of work. You can’t deduct commuting expenses even if you work during the commuting trip.
Publication 463 (2016), Travel, Gift, and Car Expenses (IRS)
Splitting a car between business and personal use
Most cars serve both work and private purposes, and the IRS requires taxpayers to separate the two. When a vehicle is used for both business and personal driving, you must divide your expenses between the two categories. The simplest method is to track total miles and business miles separately, then calculate what fraction of your driving was for work. Only that fraction of your costs qualifies as a business deduction. If you use the standard mileage rate, the 54 cents per mile applies exclusively to business miles driven during the year. Personal miles, including the daily commute to a regular workplace, do not count. Accurate mileage logs showing dates, destinations, and business purposes are essential to support the split. Without proper records, the entire deduction may be disallowed.
Business and personal use. If you use your car for both business and personal purposes, you must divide your expenses between busi- ness and personal use. You can divide your ex- pense based on the miles driven for each pur- pose.
Publication 463 (2016), Travel, Gift, and Car Expenses (IRS)
If your employer pays less than the standard rate, the gap is not just lost
An employer is free to reimburse mileage at whatever rate it likes, and many pay under the IRS figure. The shortfall is a real cost the employee carries, and it does not simply vanish: the standard mileage rate sets what the driving was worth, and the part the employer did not cover can be itemized. The arithmetic is a subtraction. Take a driver who covers 10,000 business miles in 2016 under an accountable plan and is reimbursed at 40 cents a mile. Valued at the 54 cent business rate the year's driving comes to $5,400, the reimbursement came to $4,000, and the $1,400 left over is what goes on Form 2106 as an itemized deduction. Three conditions sit behind that. You have to itemize in the first place, so a driver taking the standard deduction gets nothing out of it. The plan has to be an accountable one, which means the date, place and business purpose of every trip are already being recorded. And there has to be a gap: a reimbursement at or above the standard rate leaves nothing to deduct.
Example 3. Nicole drives 10,000 miles in 2016 for business. Under her employer's ac- countable plan, she accounts for the time (dates), place, and business purpose of each trip. Her employer pays her a mileage allow- ance of 40 cents a mile. Since Nicole's $5,400 expense computed under the standard mileage rate (10,000 miles x 54 cents) is more than her $4,000 reimbursement (10,000 miles × 40 cents), she itemizes her deductions to claim the excess ex- pense. Nicole completes Form 2106 (showing all her expenses and reimbursements) and en- ters $1,400 ($5,400 − $4,000) as an itemized deduction.
Publication 463 (2016), Travel, Gift, and Car Expenses (IRS)
How much of the standard rate is depreciation, and the FAVR maximum vehicle cost
For an automobile a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation for 2016 is 24 cents per mile. Taxpayers using the 54-cent business standard mileage rate must reduce their basis in the automobile by this 24-cent amount each year. The same notice also sets the cap used in a fixed and variable rate (FAVR) plan: the standard automobile cost may not exceed $28,000 for automobiles (excluding trucks and vans) or $31,000 for trucks and vans. A taxpayer whose FAVR plan covers a vehicle worth more than these amounts must use the cap value, not the higher actual cost, when calculating the FAVR allowance for 2016.
For automobiles a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation is 23 cents per mile for 2012, 23 cents per mile for 2013, 22 cents per mile for 2014, 24 cents per mile for 2015, and 24 cents per mile for 2016. See section 4.04 of Rev. Proc. 2010-51. SECTION 5. MAXIMUM STANDARD AUTOMOBILE COST For purposes of computing the allowance under a FAVR plan, the standard automobile cost may not exceed $28,000 for automobiles (excluding trucks and vans) or $31,000 for trucks and vans.
Notice 2016-01 (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Notice 2016-01 (IRS)
- Business use
The standard mileage rate for transportation or travel expenses is 54 cents per mile for all miles of business use (business standard mileage rate).
- Charitable service
The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under § 170.
- Medical or moving
The standard mileage rate is 19 cents per mile for use of an automobile (1) for medical care described in § 213, or (2) as part of a move for which the expenses are deductible under § 217.