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IRS mileage rate favors South Mississippians who use vehicle for work

Gas prices in South Mississippi are down 25 cents a gallon from a year ago, but the IRS standard mileage rate for 2016 was cut only 3.5 cents for the use of a vehicle for business.

AAA Fuel Gauge reported the average price of gas at $1.63 on Wednesday in the Gulfport-Biloxi-Pascagoula area, 25 cents less than the rate of $1.88 a year ago.

Because rates in South Mississippi are so much lower than the national average of $1.87, Coast residents save when they fill up their tanks and on the standard mileage rate.

The Internal Revenue Service 2016 standard mileage rates used to calculate the deductible costs of operating a vehicle for business miles driven was set at 54 cents per mile this year. That's down 3.5 cents from last year and is based on an annual study of the fixed and variable costs of operating an automobile in the U.S.

The standard rate for medical or moving purposes is 19 cents per mile, down from 23 cents for 2015. The rate is 14 cents per mile when using a vehicle for charitable organizations.

The IRS said taxpayers also have the option of calculating the actual costs of using their vehicle rather than taking the standard mileage rates.