Mileage Reimbursement

barchinal

Is it neccessary to reimburse at the Federal allowable of .365 per mile? Or can I pay whatever I want? I currently pay mileage for caregivers who travel outside city limits.

Magestry

This is a questions that I have asked for about two years. I would also love to hear the answers. When I reasearched it what I found is that the company is not mandated to pay for milage. Milage is governed by the IRS and they can use it as a deduction as a business expense when they filed their income tax at the end of the year. The reason why many company's has opted to pay milage is more for a perception point of view. The employee feels like they are being compensaged for the use of their vehicle.

System

I'm fuzzy on anything dealing with the IRS, but here's what I think. I believe that the federal amount is simply the maximum that you can deduct as a business expense for tax purposes. I think you can pay less, or nothing at all, unless there's a law I don't know about. Although the ill will you create might not be worth it. You could pay more, but I don't know what the tax implications would be for your company and the employee.

James Sokolowski
Senior Editor
M. Lee Smith Publishers

trc454

If you reimburse up to the IRS leve it does not have to be reported or taxed.