Mileage Allowance laws & HR compliance analysis

Mileage Allowance: What you need to know

Mileage reimbursement. The standard mileage reimbursement rate, effective January 1, 2018, is 54.5 cents per mile for all business miles driven. The standard mileage reimbursement rate is 18 cents per mile for medical or moving purposes and 14 cents per mile for service of charitable organizations. Employers that use the IRS rate or a lower rate may deduct the reimbursement as a business expense, and the payment need not be included in the employee's income. If the approved rate (or a lower rate) is used, the IRS considers that requirements to substantiate and adequately account for the expense are satisfied without extensive documentation of actual expenses. The employer may deduct reimbursements at a higher rate, but only if the reimbursements reflect the actual cost of the travel and only if the employer keeps adequate records to substantiate its outlays. Reimbursements for tolls, parking, etc., may be deducted in addition to the mileage allowance.
The business mileage rate increased one cent per mile, and the medical and moving expense rates increased one cent per mile from 2017. The charitable rate is set by statute and remains unchanged. The 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. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
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Company cars. The IRS also requires employees to report as earned income the value of their personal use of company automobiles. The government publishes an Annual Lease Value Table for the calculation of this sum, which can be obtained ...

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Mileage Allowance Resources

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