For the first time in human history, or at least a very long time, the mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes have declined. Specifically, beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 54 cents per mile for business miles driven, down from 57.5 cents for 2015
• 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015
• 14 cents per mile driven in service of charitable organizations

The IRS standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs. The charitable rate is based on statute.

Note that taxpayers can calculate the actual costs of using their vehicle rather than using the standard mileage rates.

The rates are important because most employers use the standard rate for business as the reimbursement rate for employees who drive their vehicles in connection with performing work. However, employers should note that, just like deductions for taxpayers, employees can opt to calculate their actual mileage expenses instead of using the IRS rate.