The Internal Revenue Service has issued their 2016 standard mileage rates used to calculate the deductible costs of operating your food truck or other vehicles for your food truck business. As of Jan. 1, 2016, the 2016 standard mileage rates for the use of a car or step van for business will be…

2016 Standard Mileage Rates For Food Trucks

• 54 cents per mile for business miles driven (down from 57.5 cents for 2015)

The business mileage rate decreased 3.5 cents per mile from the 2015 rates. The 2016 standard mileage rate for business is based on an annual study of the fixed and variable costs of operating a vehicle.

The dips in mileage rates for 2016 reflect lower gas prices nationwide. According to AAA,U.S. drivers are paying the lowest average price for regular unleaded gasoline since 2009 with the national average holding at $1.99, a penny away from dropping below $2 per gallon. On average, taxpayers are paying 79 cents per gallon less than they did in 2015.

Taxpayers always 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 2016 standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 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 are in Rev. Proc. 2010-51.  Notice 2016-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the 2016 standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

If you have any additional questions relating to the 2016 standard mileage rate, speak with your accountant.