If you get or pay out mileage reimbursements, you likely receive questions about taxes. Let's dive into if a mileage reimbursement is taxable income.
Employees don't have to pay taxes on mileage reimbursements with an accountable plan. An accountable plan includes expense allowances that has these requirements:
No. There is no federal law setting a mileage reimbursement rate. California and Massachusetts do have laws meaning you must offer a reimbursement. Also, many businesses use the standard mileage rate to set their reimbursement amounts.
For the 2017 tax returns, yes. You can claim un-reimbursed expenses like mileage on your taxes. But, this only applies if you itemize your deductions and the total amount exceeds 2 percent of your Adjusted Gross Income. Starting with the 2018 tax year, this deduction is going away. If you drive a personal vehicle for business reasons, you may want to consider talking with your employers about a direct reimbursement or allowance.
A solution like MileIQ for Teams is an ideal way for businesses to handle mileage reimbursement programs. It uses automatic mileage tracking and standardized digital reports. This leads to: