Nonprofit Resources

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Key Federal Tax Figures for 2016

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We are pleased to provide our annually updated Key Federal Tax Figures summary. We trust this will be a helpful reference tool. Please click here to download the PDF. A summary is below, along with an update about the IRA “roll-over” distribution to charity being made permanent.

Automobile Mileage Rate Volatility

The tax-free mileage rate for business use of a vehicle decreased in 2016, to 54 cents per mile. (It was 57.5 cents per mile in 2015.) Employers who reimburse employee use of personal vehicles for business or ministry use using a mileage rate may not reimburse more than this amount tax-free.

This same rate (54 cents per mile) may also be used for valuing the personal use of an employer-owned vehicle, but only if the vehicle’s value at the beginning of the year is $16,000 or less. This amount ($16,000) was the same in 2015, too.

The tax deductible mileage rate for moving and medical also decreased, to 19.0 cents per mile. (It was 23.0 cents per mile in 2015.) The regulatory definitions that determine the factors used for the business mileage rate and moving/medical mileage rate are different.

The tax deduction for mileage of volunteers was set by Congress at 14.0 cents per mile, and does not change annually.

Other Adjustments for 2016

Because of low inflation, most of the amounts did not change from 2015, or changed only slightly. Examine the specific issues that affect your organization carefully.

IRA “Roll-Over” Distribution to Charity Made Permanent

The IRA distribution rules allow for the tax-free treatment of distributions from IRAs where the distributions are donated to charity. This law was made permanent, applying to all of 2015 and future years. The law provides a significant benefit for some older individuals. It will be even more useful by being made permanent (instead of annually renewed), since this will make planning easier.

The basic elements have not changed:

  1. A taxpayer age 70 1/2 may exclude from gross income up to $100,000 in “qualified charitable distributions.”
  2. Since the taxpayer is not taxed on the distribution, the taxpayer does not get a separate contribution deduction.
  3. This distribution meets the required minimum distribution (RMD) rules.
  4. The distribution must be made directly from the IRA trustee to the charity.
  5. The distribution cannot be contributed to fund a donor-advised fund, a charitable remainder trust, or a charitable gift annuity. There are also limitations on distributions to certain supporting organizations and private foundations.

Please contact your local office with any questions.

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