The IRS has released the 2016 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. The following chart reflects the new 2016 standard mileage rates compared to the 2015 and 2014 tax year standard mileage rates.
|Business rate per mile||54.0Â¢||57.5Â¢||56.0Â¢|
|Medical and moving rate per mile||19.0Â¢||23.0Â¢||23.5Â¢|
|Charitable rate per mile||14.0Â¢||14.0Â¢||14.0Â¢|
|Depreciation rate per mile||24.0Â¢||24.0Â¢||22.0Â¢|
On December 18, 2015, the President signed into law the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). The new law extends several tax provisions retroactive to the beginning of 2015, and also makes some provisions permanent.
Additional Child Tax Credit. The refundable portion of the Child Tax Credit had an income threshold amount of $10,000, indexed for inflation. The extender legislation permanently sets the threshold at an unindexed $3,000, which will allow for a higher credit for taxpayers who qualify
Enhanced American Opportunity Tax Credit (Hope Credit). The American Opportunity Tax Credit (AOTC) is an enhanced version of the Hope Credit, allowing a credit of up to $2,500 for four years of post-secondary education. The new law makes the enhanced AOTC permanent.
Enhanced Earned Income Credit (EIC). As an extender item, the EIC credit amount was temporarily increased for taxpayers with three or more children, and the marriage penalty was reduced by increasing phase out ranges. The new law makes the enhanced EIC permanent.
Educator expenses. The new law makes the adjustment to income for qualified expenses of elementary and secondary school teachers permanent. The law also indexes the current expense cap of $250 for inflation beginning in 2016.
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