If you drive a personal car for business reasons, your employer may provide a mileage expense reimbursement. Here's a quick explainer on how you calculate your reimbursement.
You'll want to keep a mileage log book of all your drives. Nowadays, companies prefer a digital mileage log like those generated by MileIQ. Make sure you're including:
To determine what your miles are worth, multiply the miles driven by the mileage rate set by your employer. For example, let's say you drove 224 miles last month and your employer reimburses at the Standard Mileage Rate of 54.5 cents per business mile. Your mileage reimbursement would be $122.08 (224 X 54.5 cents = 122.08).
There is no federal law requiring a mileage reimbursement. But, many companies offer this to keep employees happy. States like California do require companies to provide some compensation for the business use of their vehicles. In California, this can be a car allowance or a mileage reimbursement.
If your business has an "accountable" plan, the employer doesn't have to include these costs as part of taxable wages. The accountable plan must meet¬†the following conditions: