Standard Mileage Rates Reduced for 2016
The Internal Revenue Service released the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. On January 1, 2016, the following standard mileage rates became effective:
The standard mileage rate for driving a vehicle for business purposes is set at 54 cents per mile. That’s down from 57.5 cents in 2015.
- Medical and moving
The rate for medical and moving mileage decreases from last year’s 23 cents a mile to 19 cents a mile.
The general rate for charitable driving remains at 14 cents a mile.
Keys to effective cash management
Add cash management to your list of business goals for 2016. Commitment to effective practices and techniques can be the key to keeping your business operating on a sound footing. Some tips:
- Reduce lag time.
Reducing the time between sending out invoices and receiving payment may take the form of giving incentive discounts to customers who pay early. On the expense side, aim for just-intime inventory to reduce holding costs.
- Establish a line of credit.
To cover shortfalls resulting from excessive lag time, unforeseen business disruptions, or weakening in your particular market, set up a line of credit with your local financial institution. What to watch out for: The tendency to let short-term credit develop into a crutch that props up poor cash management.
- Check out new customers.
Assess whether new clients are likely to pay on time before extending credit. Deadbeat clients can squeeze your firm’s cash flow quickly.
- Grow with caution.
Expanding into new markets can bring momentum and additional sources of income. But developing new product lines, expanding facilities, hiring employees, and ramping up your marketing budget all consume cash. Be sure your cash forecasts are accurate. Review and update them on a regular basis.
Be aware of these tax deadlines for January and February 2016
A new year means tax return filing season has arrived once again. Among the tax deadlines you may be required to meet in the next few months are the following:
- January 15
Due date for the fourth and final installment of 2015 estimated tax for individuals (unless you file your 2015 return and pay any balance due by February 1).
- February 1
Employers must furnish 2015 W-2 statements to employees. Payers must furnish 1099 information statements to payees. Applicable large employers (generally employers with 50 or more full-time employees in the previous year) must furnish Forms 1095-C, Employer-Provided Health Insurance Offer and Coverage, to employees. (The deadline for Form 1099-B and consolidated statements is February 16.)
- February 1
Employers must generally file 2015 federal unemployment tax returns and pay any tax due.
- February 29
Payers must file information returns (such as 1095s and 1099s) with the IRS. (March 31 is the deadline if filing electronically.)
- February 29
Employers must send W-2 copies to the Social Security Administration. (March 31 is the deadline if filing electronically.)