![]() It is, however, recommended that employers offer some kind of plan to their employees – driving a vehicle for work is a large expense, and most employees expect some kind of reimbursement on their fixed and variable costs as they are not eligible for an itemized deduction since the 2017 Tax And Jobs Cut (TCJA). The Rules of Mileage Reimbursementįirst off, it’s worth mentioning that it is not mandatory for an employer or business to even have a mileage reimbursement policy, except in the state of California. To delve a little deeper, we’ll first need to go through the rules of mileage reimbursement. That means oil, gas, and general maintenance as a result of wear and tear are covered – as are parking fees and tolls, depending on what your employer decides to include. In short, mileage reimbursement covers the numerous costs of operating a vehicle for business reasons. While people often ask “What is a mileage tax?” or “How to deduct mileage on taxes?”, it is essential to first understand what mileage reimbursement actually covers, as it is only after this question is answered that the aforementioned questions can truly be answered. We’ll cover each category in more detail a little later, though the above scenarios account for all possible contexts in which mileage reimbursement is relevant. Employees are provided with a company car, which belongs to the business.Employees in the business use a privately owned vehicle for business-related activities.Essentially if you are an employee or you own and run a business, one of the following scenarios is likely: This overarching term refers to several possible situations that can occur for employers, independent contractors, and employees. We’ll also delve into the best practices from both an employee’s and an employer’s point of view, covering the full spectrum with IRS-Proof solutions. In this article, we focus on the specifics around car mileage for business purposes and the employee mileage reimbursement rules. If you drive a vehicle for your employer, you may be wondering “ How much should I be reimbursed for mileage?”
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