Oftentimes, employees who drive their personal vehicles for work will be paid a mileage rate to account for their extra expenses, often covering things like gas prices, car insurance, and tires as just a few examples.
There may be times when you’re unsure of whether you’re being reimbursed sufficiently – but there are generally going to be at least a few ways for you to find out. If you’re unsure about what you need to do to qualify for mileage reimbursement or simply want to know some of the best practices for getting compensation, we’re here to help.
How can an employee get reimbursed for mileage?
As you’re likely to know, using your vehicle is going to come with a variety of costs outside of just gas. Anyone who uses their personal car for their company is likely to want to make sure that they get properly reimbursed for a whole host of things.
One of the main considerations is going to be mileage. To be able to receive compensation for the additional distances you undertake for work purposes, you will need to have a log to show how many miles you’ve driven. Some companies may have a system in place for this, while others will leave it entirely up to you to track and report your endeavors, which is why it’s best to learn about what you need to do in your unique situation.
3 ways to get mileage reimbursement
1. Fixed car allowance
Some companies may choose to offer a fixed car allowance. This typically offers employees a decent mileage rate, but comes with the cost of having to deal with tax on top of it. However, it’s the allowance that’s taxed and not the mileage, which may be worth taking into consideration.
2. IRS standard mileage rate
Essentially, the internal revenue service (IRS) offers a rate without having to worry about being taxed, which for many individuals is going to be an excellent bonus. Another non-taxable option, it’s overall an excellent choice for many employees looking for reimbursement.
3. Fixed and variable rates
Commonly abbreviated as FAVR, this particular option can provide both fixed and variable rates, the specific amount of rates depending on the agreement between the employer and the employee. If the mileage rate does not exceed the federal mileage rate (58.5 cents for 2022), it will be tax-free – this is one of the reasons why it is so popular among many employees.
How to track your mileage
Fortunately, there are several options for individuals who want to get a reimbursement for their mileage. Something like having an accountable plan or an efficient mileage tracking tool, for example, could be a great help.
Of course, you could always use mileage tracker app if you want to keep on top of your business mileage – and that’s exactly what MileageWise is for. With this app, you’ll be able to track your distances with ease and keep an IRS-proof log to ensure that all the mileage you record is there, as well as enjoy an excellent log preparation service if you need it.
There are quite a few reasons why it could be worth looking into MileageWise; from the several mileage modes to advanced artificial intelligence to create past mileage, there’s a lot that this mileage tracker app can do.
In fact, an average of $12,000 is deducted per car on mileage tax annually – which isn’t something you’re going to want to overlook.