Remote Work Expense Reimbursement Requirements | Should Companies Reimburse Work From Home Expenses?

woman working from home remote working during covid 19 pandemic

As the world continues to grapple with the COVID-19 pandemic, many people are still working from home. According to the Pew Research Center, “roughly six-in-ten U.S. workers who say their jobs can mainly be done from home (59%) are working from home all or most of the time”.

Your employees may be asking you to reimburse some of the costs that they incur while conducting business on behalf of your company working from home. Some of the expenses that they may incur include:

  • Internet costs
  • Equipment and hardware (laptops, headphones, office chairs, etc.)
  • Electricity
  • Office supplies (printer ink, paper, etc.)

Am I Required to Reimburse My Remote Workers By Law?

There are no federal laws requiring you to reimburse your employees for work expenses that they incur. The only exception to this rule is if their expenses would cause them to fall below the minimum wage.

Still, some states and jurisdictions have individual laws and regulations regarding expense reimbursement, including expenses related to telecommuting and remote work.

Which States Require Expense Reimbursement For Remote Work?

The following states have some sort of expense reimbursement laws. Click the name of the state to learn more about its specific requirements. 

Related: Mileage Reimbursement Requirements By State

Should You Reimburse Your Remote Workers’ Expenses?

As mentioned previously, there is no federal law mandating companies to reimburse their remote workers’ expenses. Most companies do choose to have some sort of expense reimbursement policy, however.

Offering expense reimbursement can be a great way to attract and retain high-quality candidates.

Coming Up With a Work From Home Reimbursement Plan

Should you choose to reimburse your remote workers’ expenses, you should take the time to develop a comprehensive written reimbursement plan so as to eliminate any confusion. Set specific guidelines and boundaries that your payroll, HR, and management teams, as well as your WFH employees, will be able to easily follow. 

For example, if your employee’s internet bill is $100 per month and you calculate that 1/3 of their day is spent working, then you would reimburse them for $33.33 each month for their internet. You can then apply a similar formula for other expenses that your employees claim.

Related: How Employees Working From Home Deduct Their Mileage

Does your team need specific work laptops? Are ergonomic office chairs a necessary expense? Since most jurisdictions don’t have any specific reimbursement requirements, the onus on what or what not to reimburse falls on you. 

Should Your Company Stay Remote or Return to the Office?

If you’re trying to decide whether you should stay remote or bring people back to the office, that can be a difficult question. This is a multi-faceted question that can have many angles.

One of the easier ways to answer this question is to go at it from a monetary angle. While the upfront cost of, say, buying your team office chairs for their homes may seem like a lot, and “while these costs add up, they are likely still less than the real estate and facility costs for having people work in the office” (SHRM).

Your employees may appreciate the perks that come with remote work as well. The extra hour they get to sleep in in the morning and the extra hour they get to spend with their families can go a long way to getting your team to appreciate their work and may even boost their productivity. 

man-working-from-home-remote-work

Tracking Work From Home Expenses

No matter what, your employees will need to provide proof of their expenses if they want to be reimbursed. One method would be to gather up all of their receipts every month and then manually process them one by one.

Such a method would take significant amounts of time and effort that you simply shouldn’t need to invest. Thankfully, modern tools and apps make expense reimbursement an absolute breeze.

Modern Tools Make Tracking Remote Work Expenses a Breeze

Despite being designed for companies with mobile employees, TripLog’s expense tracking features can be used by any company needing to reimburse their teams. Your workers can input all of their expenses into the TripLog app, and TripLog will produce high-quality expense reports.

Related: IRS Mileage Commuting Rule: What Businesses Need To Know

They can even attach receipts, connect their bank accounts, and companies can create custom expense categories! To learn more about TripLog’s expense tracking features, schedule a complimentary web demo with our team today.

Are Work From Home Expense Reimbursements Tax-deductible?

The IRS only lets employees claim a tax deduction on their business expense reimbursements if:

  • “There is a business connection to the expenditure.
  • There is adequate accounting by the recipient within a reasonable period of time. 
  • Excess reimbursements or advances are returned within a reasonable period of time.”

If these specific requirements are not fulfilled, then the reimbursement is considered income and therefore must be reported as taxable. 

Home Office Deduction For Remote Workers

If you are an employee who has an office set up in your home, you cannot use or claim the home office deduction. This deduction is solely for independent contractors and self-employed workers.

Related: Are You An Independent Contractor Or An Employee?

Conclusion

The post-COVID world can be a tricky place for companies to navigate. The changing landscape presents many unique challenges to business owners.

When it comes to mileage and expense reimbursement, solutions like TripLog help alleviate some of that stress and uncertainty. To learn more about TripLog’s company mileage solutions, visit our pricing page, or schedule a live demo today.

7 Ways Uber & DoorDash Drivers Can Save on Gas in 2022

woman filling up gas tips for saving money on gas and fuel

This shouldn’t come as a shocker to most of us who haven’t yet switched to electric cars: gas prices are expensive right now. In fact, they’re the most expensive they ever have been in the United States.

The majority of us still drive frequently, which means we need to purchase copious amounts of gas. With that said, are there things we can do to save money on gas? 

There’s no singular thing we could be doing to save lots of money, but by doing a lot of smaller and manageable things, the savings can quickly add up. Let’s get into our top 7 best tips on how Uber and DoorDash drivers (and anyone else who uses their car for work!) can save money on gas in 2022.

Uber & DoorDash Gas Saving Tip #1: Adjust Your Driving Behavior

Not all driving styles are equal when it comes to saving on gas (and other forms of car depreciation). Harsh accelerations, for instance, are known to decrease gas mileage. 

Related: Why You Should Use A Mileage Tracker With Your Fuel Card

Driving more slowly, easing into accelerations, using less AC, breaking slowly, and reducing idling can save you more than you might expect. For instance, AAA states that gradual accelerations can increase your fuel efficiency by 10-40%.

To save even more, you can decrease the weight of your car. Remove that old equipment and that case of water bottles from your trunk and you’ll see an immediate increase in fuel efficiency. 

Uber & DoorDash Gas Saving Tip #2: Choose the Right Car

If you already own a car, getting rid of it and purchasing a new one might not be particularly accessible. Still, if you’re in the market for a new car, there are some things to consider in regard to saving on gas.

Obviously, purchasing an all-electric or hybrid car will net you the best “gas” mileage. If you do go with an electric vehicle, you should remember that, while cheaper, “filling up” your car is going to take more time than a more traditional vehicle.

Electric or Hybrids Not Quite Your Speed?

If you do go with a non-electric or hybrid car, there are still things you can consider if you want to pinch every gas-spending penny. For example, cars with automatic transmissions are known to sometimes use more gasoline than cars with manual transmissions.

In addition, you could consider the size and weight of your car. A model with a smaller cab or truck bed might be lighter and thus more fuel-efficient. 

If you don’t need a four-wheel-drive car in your area, you should avoid it since they usually use more fuel than non-four-wheel-drive vehicles. Even something as small as choosing lighter colors can have an effect on reducing heat buildup, which can result in less air-conditioning usage.

You could also consider looking into which cars are more aerodynamic than others. 

Uber & DoorDash Gas Saving Tip #3: Treat Your Car Right

Oftentimes, we don’t give our cars quite the treatment they deserve. Putting off that oil change by another few thousand miles, ignoring that tire pressure gauge for a few days – we’re all a little guilty. 

When it comes to saving on gas, staying on top of these things can save you money in the long run. Keeping your tires inflated, oil filled, spark plugs in good condition, and clearing your air filter twice a year can help you save on gas.

Related: Top 5 Tax Tips For Gig Economy Workers In 2022

You could also take into consideration the type of tires you use. Make sure they’re the best fit for your type of car. Heavier tires, for instance, will drag your car down more, which will lower your fuel efficiency. 

gas prices tips to save money on fuel

Uber & DoorDash Gas Saving Tip #4: Use Apps & Tools

There are many apps that you can use to help you save money on your gas. Apps like GasBuddy and Upside are very popular and are easy to set up. 

GasBuddy is designed to help you find the cheapest gas stations in your area. It even offers a gas card that you can use that provides you with rewards, including free gas. 

As long as you’re diligent about paying off your card, GasBuddy can help you save at the pump. Many grocery store rewards programs offer similar benefits. 

Route planning apps and GPS apps like Google Maps can be extremely helpful as well. You may know your area like the back of your hand, but predicting traffic can be very difficult. 

Related: Google Maps Mileage Tracking Explained

By using a GPS app, you’re able to find the quickest – and cheapest – route possible. Google Maps even offers routes based entirely on gas mileage savings!

Uber & DoorDash Gas Saving Tip #5: Keep Track of your Gas Mileage

A great way to make sure you’re budgeting your gas money well is to track your gas mileage and purchases. There are many ways to do this, whether you’re using pen-and-paper or a dedicated app.

If you use your car for work, you should probably be using an automatic mileage tracker app like TripLog. Compared to other company mileage trackers and mileage reimbursement solutions, TripLog actually can natively track your fuel purchases and calculate your miles-per-gallon.

TripLog can even help with route planning, as discussed in the previous tip!

Uber & DoorDash Gas Saving Tip #6: Make Good Decisions At the Pump

Even when you’re filling up gas and spending your precious money, there are things you can do to save. For instance, don’t use mid-grade or premium gas pumps. Just stick with regular (unless your car actually needs higher-grade gas).

You can also avoid topping off your gas tank. Fill it up until the nozzle stops, and then go again until the nozzle stops a second time, then stop. 

Related: DoorDash Top Dasher Requirements: Everything You Need To Know

Over fueling can cause issues such as flooding which can impair certain emissions control functions.

Uber & DoorDash Gas Saving Tip #7: Don’t Drive!

This may seem counterintuitive, but if you’re feeling the impact of these high gas prices, you can consider leaving your car at home and trying other forms of transportation. If possible, see if public transportation is an option for your commute, or consider riding a bike or walking if you’re only going a short distance. 

Conclusion

We hope you find these tips useful during these high gas price times. To learn more about how TripLog can help you save money, schedule a complimentary live web demo or visit our pricing page to learn more.

Google Maps Mileage Tracking | How to Track Your Mileage With Google Maps

mobile employee using their personal car for work and maybe google maps

If you use your personal car to conduct business, you should be using some method to track your mileage. In addition, if you’re a company with mobile employees who use their personal vehicles, they should be tracking their mileage as well so that you can easily provide them with mileage reimbursement

There are many different ways to track mileage and expenses. Many still continue to use outdated pen-and-paper mileage tracking methods. These can be extremely inaccurate, however, and can take a lot of time to fill out as well.

The more standard method today is to use an automatic mileage tracker app like TripLog. With that said, some people might wonder if using Google Maps is a viable method to track their mileage. 

Related: Rideshare Tax Guide: What You Need To Know For 2022

Today, we’re going to look at various ways that Google Maps can assist workers who need to track their mileage for work.

Does Google Maps Have a Built-in Mileage Tracker?

As of 2022, Google Maps does not have an integrated mileage tracker in its app. With that said, Google Maps is by far the most used navigation app in the United States.

According to some recent studies conducted on the topic, Google Maps controls somewhere between 70% and 80% of the phone navigation app market share. However, if you’re going to track your mileage, it will not do it for you automatically.

Can You Track Your Mileage Using Google Maps?

While Google Maps doesn’t have a built-in mileage tracker app, you can still use Google Maps as a method of tracking your mileage. This can be accomplished in a few ways.

Google Maps Mileage Tracking Method #1: Use An Automatic Mileage Tracker App That Integrates With Google Maps

Even though Google Maps doesn’t natively track your mileage like an automatic mileage tracker app can, some mileage tracker apps have integrations with Google Maps. For instance, TripLog has certain Google Maps integrations that can make things easier for businesses.

Businesses with mobile team members that are under the TripLog Enterprise plan are able to compare their team’s drives to Google Maps. If a driver reports that a trip took 20 miles, but Google Maps says the trip actually took 15 miles, this trip will be flagged or auto-adjusted.

In the TripLog web dashboard, admins can see and manage overreported trips, as well as adjust settings related to the feature. In addition to this feature, TripLog allows Android users to import their saved locations from Google Maps

To learn more about how TripLog can help your business save time and money, schedule a complimentary demo request today!

Google Maps Mileage Tracking Method #2: Use Google Maps Timeline

For Android users, a potential method to track your mileage with Google Maps is to use Google Maps Timeline. According to Google’s help center, “Google Maps Timeline shows an estimate of places that you may have been and routes that you may have taken based on your Location History”.

Related: DoorDash Top Dasher Requirements: Everything You Need To Know

Note: Google Maps Timeline is only available to Android users who have the feature enabled. To check your Google Maps Timeline, open the Google Maps app, tap your profile picture, and select “Your Timeline”.

mobile employee using a mileage tracker and maybe google maps for work

Downloading Your Google Maps Timeline Data

You can download your Google Maps Timeline by using Google Takeout. Here are the steps to download your data:

  1. Sign into Google Takeout.
  2. Locate the “Location History” option and make sure it’s selected.
  3. Unselect any other options that you do not want to download (select “Deselect all” at the top to do this quickly).
  4. At the bottom, hit the “Next step”.
  5. Select “Export once” and then choose the file type and size. We recommend downloading it as a .zip file.
  6. Click “Create export”. 

Depending on how much data you’re downloading, this process can take a minute or two, a few hours, or even a few days. Thus, if you need this information to do your taxes, you should export sooner rather than later.

Should You Use Google Maps Timeline to Track Your Mileage?

With all of that said, the general consensus is that there are far more efficient and easier methods for mileage tracking than Google Maps Timeline. Reddit user /u/HarpyFarts said this about using Google Maps Timeline to track their mileage

“Soooo, this was my MO when delivering, and tbh it’s a ***** to track. I spent a good several hours compiling my last quarter (3 months) mileage. Better that you use an app that’s made for it…”

Related: The 6 Best Food Delivery Tips For 2022

We would recommend using an automatic mileage tracker app as your method. It’s by far the most efficient method, and their unmatched accuracy and ease of use will save you a great deal of time and money.

You can download TripLog, the market’s best mileage tracker app, on iOS or Android for free today!

Google Maps Mileage Tracking Method #3: Use Google Maps as a Reference

If you’re dead-set manual mileage tracking, you can definitely use Google Maps to supplement whatever method you’re currently using. As you probably know, when you plug an address into Google Maps, you can see how many miles it will take to arrive there. 

You can use this information as a general reference when you’re conducting business. In addition, Google Maps is a highly accurate navigation tool, so you can trust that you will get to your location in the fastest time possible when using it.

Transform Your Mileage Tracking With TripLog

As we’ve learned today, Google Maps is a useful tool, but it’s not a great way to track your mileage. You definitely can’t use it to track any other business-related expenses, either.

Get started with TripLog today and never miss a reimbursable or tax-deductible mile. Thanks for reading!

Mileage Reimbursement Explained | How To Set Up a Mileage Reimbursement Policy for Your Business

company mileage reimbursement plan setup

If you have mobile employees, setting up a company mileage reimbursement policy is a must. With that said, not every company has a policy in place, and if they do, their policies are often inefficient.

Outdated pen-and-paper mileage tracking methods cost companies thousands of dollars and countless labor hours every year. It doesn’t have to be that way. Today, we’re going to discuss why mileage reimbursement policies are important, and how you can easily set one up.

What Does Mileage Reimbursement Cover?

“Mileage” refers to any expenses incurred when an employee uses their personal vehicle for work. Think of tasks like meeting with clients and going out for office supplies.

If they’re using their personal vehicle to conduct business for your company, they’re subject to getting reimbursed. Some potential expenses that can be covered by mileage reimbursement may include:

  • Fuel
  • Oil changes
  • Insurance costs
  • General maintenance
  • Car depreciation

Keep in mind that certain things are not covered by mileage reimbursements. For example, employee commutes are typically not reimbursed.

How Much Should You Reimburse For Your Employee’s Mileage?

Determining what rate to reimburse your team can seem tricky, but it doesn’t have to be. It all comes down to what’s fair.

In the United States, the IRS tries to make it easier by offering a mileage rate that is based on “an annual study of the fixed and variable costs of operating an automobile” (IRS.gov). The standard mileage rate for 2022 is 58.5 cents for business mileage.

Related: IRS Mileage Rate Explained | How Is The Standard Mileage Rate Determined?

In most states, this rate is optional, however. If you as an employer can prove that the expenses your employees incur are less than the recommended IRS rate, you are able to pay them the rate that you think is fair.

If you choose to do this, tread carefully, as this method can leave you liable if you’re under-reimbursing. Your employee’s net pay can fall below the minimum wage.

Other Mileage Reimbursement Methods

With that said, what’s fair for one state may not be fair in another. A reimbursement rate used by a tech company in San Francisco may not make as much sense for a small business in rural Oklahoma.

If, for example, you feel as though the IRS rate won’t be fair for your region, your business can implement a fixed and variable rate (FAVR) program. If your rate is higher than the one set by the IRS, your employee will have to pay taxes on the additional income.

Are Companies Required to Reimburse Mileage?

In most states, mileage reimbursement is not a requirement. The IRS does not have any federal regulations that force companies to offer reimbursement programs.

With that said, most companies choose to use the standard IRS mileage reimbursement rate. In addition, some states have their own laws and regulations regarding mileage reimbursement.

Consult your local jurisdiction’s laws to ensure you’re following the correct guidelines. For readers and company owners not living in the United States, be sure to check your government’s requirements on expense reimbursements as some of this information may not apply.

driving car for work needs mileage reimbursement

Why Your Company Should Develop a Mileage Reimbursement Policy

There are two major reasons why you should develop a mileage reimbursement policy. First, it helps in attracting top talent by ensuring the company will make good on any company-related expenses that are incurred by the employee. Second, it allows the company to reduce its tax exposure by identifying valid business expenses that it can write off.

Employee Mileage Reimbursement: The Data

Without a modern mileage tracker app, employees generally use paper mileage logs. This requires the driver to pull out their mileage logbook, grab a pen, and manually enter the necessary information.

Drivers spend around 2 minutes per mileage entry using pen-and-paper logs. An automatic mileage tracker like TripLog cuts out that time almost entirely.

If drivers make multiple trips throughout the day, these minutes add up, with a typical driver spending an average of 58 hours a year filling out manual mileage logs.

Related: IRS Mileage Commuting Rule: What Businesses Need To Know

In addition, TripLog found that, within a three-year period, 28% of all manual mileage claims are overreported, costing companies an average of over $1,800 per driver. TripLog’s app cross-references manual reports with Google Maps, ensuring accurate mileage reporting.

How To Implement a Mileage Reimbursement Policy

To take advantage of the benefits of implementing a mileage reimbursement policy, a company must ensure certain things are in place to meet all IRS requirements. An accountable plan is one such necessity.

If you choose to use the standard mileage rate, you will need to set up an accountable plan. An accountable plan outlines reimbursement and expense allowances for employees. This will ensure that your reimbursement is tax-free.

When setting up an accountable plan, companies must ensure they meet three specific criteria:

  1. Your employee’s expenses must be business-related.
  2. The employee must provide a timely and detailed expense report.
  3. The employee must return any payments that were more than the reimbursement within a reasonable timeframe.

To Ensure Accurate Reimbursements, Employees Must Track Their Mileage.

As stated above, employees need to provide timely and detailed expense reports. These reports should differentiate business mileage from personal mileage.

The Problems With Manual Mileage Reimbursement Methods

For decades, companies have had their employees fill out manual mileage logs. This requires them to pull out a paper mileage log and a pen and manually jot down information like odometer readings.

Oftentimes, the employee will have to present a stack of receipts, forcing your company to invest more time in sorting and organizing expenses. In an internal study, TripLog found that drivers spend about 2 minutes per stop filling out mileage logs.

One TripLog client found that their drivers were spending eight hours per month just on manually entering their travel.

Approximately 19% of all expense reports have errors, and companies lose around 5% of their revenue to fraud. Manual expense reports leave companies significantly more prone to errors and fraud.

Related: Manual Expense Reports: The Hidden Costs

Automatic Mileage Tracker Apps Make Mileage Reimbursement A Breeze

By switching from pen-and-paper to an automatic mileage tracker app like TripLog, companies can save untold amounts of money and time. Drivers get a sleek, modern, and fast way to track their mileage and expenses, and business owners and admins get access to our comprehensive web dashboard.

mobile employee using car for work will need mileage reimbursement

TripLog automatically starts tracking your team’s trips the moment they start driving and stops when they stop. With one easy swipe, they can classify the trip as business or personal.

Then, right from the app, employees can submit their reports directly to your admin team for reimbursement. You can even deduct your team’s first and last trips (i.e., their commutes) from their mileage reports.

TripLog’s web dashboard holds all of your team’s mileage reimbursement information in one convenient place. With detailed analytics and reporting capabilities, you can see where your money is going, as well as approve or reject expense reports.

Mileage Reimbursement vs. Mileage Allowance

As we know, every business is different and one size may not fit all. It’s worth pointing out the major differences in reimbursing employees for their mileage & expenses vs. providing an allowance.

When companies provide an allowance, employees receive their funds beforehand and can use them for travel without having to wait. With that said, this method can result in fraud and unintentional inaccuracies.

Requiring employees to submit mileage expense reports can reduce the instances of fraud and inaccuracy, but it increases the paperwork. For many companies trying to reduce fraud and keep a tighter rein on their expenses, it can be a more attractive option.

Choosing mileage reimbursement has its disadvantages, but companies can leverage technology that automates the entire process.

How TripLog Can Help With Mileage Reimbursement

Effective mileage tracking and reimbursement solutions such as TripLog can cut the time and effort needed to put in place a mileage reimbursement policy. TripLog is by far the market’s best mileage reimbursement solution.

TripLog provides a smart mileage reimbursement solution not only to small and midsized companies but also to larger enterprise-scale organizations.

Related: Is Mileage Reimbursement Considered Taxable Income?

Our intuitive web dashboard allows administrators to manage approvals, supervisors, mileage, and more. The dashboard allows companies to easily set up their accountable plan and mileage reimbursement policy.

TripLog’s Mileage Reimbursement Features

TripLog’s easy-to-use app allows for many set-and-forget auto start options. In addition, TripLog’s web dashboard gives business owners and administrators access to insightful data, such as month-by-month mileage, fuel use, busiest hours, and more. 

Complete and total control via the comprehensive dashboard allows company administrators to tailor mileage reimbursement details whenever IRS requirements or company policies change.

TripLog provides companies with a competitive advantage by helping them to make mileage tracking a more efficient, manageable, and transparent process.

Download TripLog for free on iOS or Android, or schedule a complimentary web demo today.

6 Common IRS Tax Penalties For Small Businesses

small business owner sitting at desk

If you’re a small business owner, chances are, you’re handling most aspects of your company yourself. One of these numerous responsibilities is managing your books.

Whether you have a few employees under your wing or you’re a sole proprietor in the gig economy, you will need to make sure your company avoids any penalties from the IRS. Here are 6 of the most common IRS tax penalties small businesses might face.

Common IRS Tax Penalty #1: Trust Fund Recovery Penalty

This penalty sounds fancier than it really is. If your business has employees, your company must withhold and pay trust fund (or, put more simply, payroll) taxes.

Trust fund (or payroll) taxes include income tax, the federal unemployment tax, and FICA (Social Security and Medicare) taxes. As a company, you must withhold the income tax and FICA tax from each employee’s paycheck and send that balance to the IRS every month.

Related: Why Small Businesses Are Vulnerable If Not Properly Tracking Mileage

It’s definitely worth remembering that any employee (or company owner!) that “willfully” fails to pay these taxes can be held liable by the IRS. The TFRP is equal to the “unpaid balance of the trust fund tax”.

Common IRS Tax Penalty #2: Tax Fraud Penalty

This is the big one – tax fraud. If the IRS can prove beyond a reasonable doubt that if you underpaid on your taxes intentionally, you will be hit with a 75% fine on the underpaid amount.

The Tax Fraud Penalty is an easy one to avoid, really. Just be as honest as possible when you file your taxes! If your small business is able to afford the expense, consider hiring an accountant or bookkeeper to make filing your taxes a breeze.

This is a big one that small business owners will need to be extremely mindful of. If you substantially underestimate your taxes or make an error due to negligence, you will be hit with a 20% penalty. 

If you’re a small business still finding its footing or a sole proprietor needing to save every penny, that can be a huge blow to your finances. It’s important, thus, to maintain accurate records for when you file your taxes.

Related: Manual Expense Reports: The Hidden Costs

Thankfully, the age of hoarding paper is long over. With powerful modern tools like TripLog, businesses can easily organize their records and save thousands every year.

small-business-owner-standing-by-desk

Common IRS Tax Penalty #4: Failure to File Penalty

This one should be a no-brainer,: your taxes need to be filed on their due date. If you don’t, the IRS will hit you with a 5% monthly penalty, which can reach up to 25% if left unchecked.

With that said, even if you can’t pay your taxes, you should still file them on time. The penalties for simply not filing them are significantly less.

Common IRS Tax Penalty #5: Failure to Pay Penalty

If your small business filed its taxes but hasn’t paid, you will incur the Failure to Pay Penalty. This penalty is 0.5% per month. If you enter an installment agreement, you can have this penalty reduced to 0.25% per month.

If you receive a notice of levy, the penalty can increase to 1%. Consider, however, that a maximum penalty of 25% per month is possible, so pay as soon as you are able.

Common IRS Tax Penalty #6: Underpayment of Estimated Tax by Individuals Penalty

The IRS requires you to pay at least 90% of what you owe that year; otherwise, you will be hit with a penalty. These payments should be made in equal installments as they may still charge additional penalties if you pay less at first and more later on.

Related: 3 Ways SMBs Can Save Money (And 3 Ways They Lose Money)

If you pay 100% of the previous year’s tax bill in equal quarterly installments (this could be more if you earn over 150k), you can avoid penalties as well.

Managing Your Team’s Taxes & Reimbursements Doesn’t Need to be Hard.

TripLog’s powerful administrator features give managers and company owners the tools they need to maximize their profits and time savings. Know where every cent is going, and trust that you are reimbursing your team’s mileage for the right amounts, every time.

It’s never been easier to set up a mileage reimbursement plan for your company. To get TripLog’s mileage tracker app for your company, visit our pricing page or schedule a complimentary live web demo to learn more.

Top 5 Tax Tips For Gig Economy Workers In 2022

uber lyft driver gig economy worker working

Here’s a stunning (and unfortunate) fact: gig economy workers earn 20% less than the average American worker. If you’re one of the 10s of millions of Americans operating as a sole proprietor, you’ll need to maximize every dollar and cent you earn.

Every year, the number of Americans working in the gig economy grows more and more. With tax season right around the corner, we thought it’d be a great time to share our top tax tips for those hustling and bustling in the gig economy.

Gig Economy Tax Tip #1: You Probably Need To Pay Your Taxes 4x A Year

If you’re new to the gig economy world, you may be surprised to know that self-employed individuals essentially need to pay their taxes quarterly, rather than just yearly like most workers. 

If you were to work for a separate company, your employer would withhold taxes from your paychecks. As a self-employed individual, that duty falls on you.

Related: The 6 Best Food Delivery Tips For 2022

Because of this, you are required to pay both your own Social Security and Medicare taxes. You will also pay taxes that typically fall in the purview of your employer, resulting in 15.3% of your net pay going to Uncle Sam.

Gig Economy Tax Tip #2: Set Aside Money (More Than You Expect)

Because such a large amount of your net pay is going from your bank account to the IRS, many people starting out their gig economy careers experience some panic when they move to file their first quarterly tax return. It can take a lot of effort to start earning more than the national average, so you may not be exactly flush with cash when starting out.

If you don’t pay your quarterly taxes, the IRS will slap you with large fines. This can result in even more of your net income being taken from you. It’s extremely important to pay them on time, so be sure to have enough saved away to prevent those penalties.

With that said, a lot of the time, the IRS is fairly generous when it comes to deadline extensions. The form that the vast majority of gig economy workers reading this should research is form 1040-ES.

Gig Economy Tax Tip #3: Don’t Disregard Deductions

One of your strongest tools to save money as a self-employed worker is taking tax deductions. It would be unethical (and unlawful) to deduct anything and everything. That said, taking legitimate deductions can be a great way to save more of your income.

Generally, if you’re paying for something and using it for work, you can deduct it from your taxes. This can include things like supplies (snacks for rideshare customers, phone chargers, etc.), car repairs, and, of course, your mileage.

gig economy worker delivering food to a woman

It’s important to keep track of your expenses. One of the best ways to do that is by using a modern mileage tracking app like TripLog. With TripLog, you can easily categorize your expenses and access detailed reports within the app.

Related: DoorDash Top Dasher Requirements: Everything You Need To Know

If you have a space in your house that you work out of, you can use the home office deduction. In addition, TripLog’s company mileage tracking features ensure that you will never miss a deductible mile.

Start your 15-day free trial today!

Gig Economy Tax Tip #4: Keep Good Records

All legal liability falls on your shoulders as a self-employed individual. This can offer you significantly more freedom compared to being a traditional employee. That said, this also will demand additional efforts on your end.

If the IRS were to come knocking on your door asking for more information on a claim you made when filing your taxes, you will need to be able to reasonably substantiate what you claimed, or else you could incur additional penalties and fines.

You could hold onto your receipts, but organizing stacks and stacks of paper can be a nightmare. Thankfully, if you’re using TripLog, our app’s automatic receipt scanning will make organizing your expenses for tax time a breeze.

Don’t mistake the flexibility of being self-employed with a lack of responsibility.

Gig Economy Tax Tip #5: It’s Never Too Early to Start Thinking About Retirement

The issue of putting money away for retirement will fall squarely on your shoulders as well. Whether you’re 18 or 48, the best time to start considering what you’re going to do when you retire is today.

Related: 4 Best Tips For Road Warriors (2021)

Many traditional companies will have 401(k) plans in place, but if you’re entering the gig economy, there is no parent company there to hold your hand in circumstances like this. While we can’t offer direct financial advice, opening a Roth IRA might be a good direction for people starting out.

A Roth IRA allows you to contribute up to $6,000 per year, but you definitely don’t need to invest that much if you’re just starting out. As we discussed previously, when you’re getting your feet wet in the gig economy, you may not be earning a whole lot, and with the price of goods going up year over year, you’ll definitely feel inclined to keep as you can in your bank account. 

Regardless, this is a factor that many Americans overlook. According to a recent survey, over 1/3 of all Americans have never set aside anything for their retirement. Don’t let that be you!

No matter what, one of the best things you can do as a gig economy worker is take advantage of as many tools as you can. Drivers using TripLog stand to save thousands of dollars every year via tax deductions and time savings.

Download the app on iPhone or Android, or schedule a complimentary live web demo. You can also try our mileage reimbursement savings calculator!

The 6 Best Food Delivery Driver Tips For 2022

food delivery driver delivering food

Whether you’re new to food delivery or you’re an old pro ready to take the next step, these food delivery driver tips will help you maximize your earnings when doing gig economy food delivery through services like Uber Eats and DoorDash.

Food Delivery Driver Tip 1: Don’t Sweat Your Acceptance Rate (Usually)

Your acceptance rate is the percentage of deliveries that you accept in your app. For most of the major food delivery services (DoorDash, GrubHub, Uber Eats), your acceptance rate won’t have too much of an effect on your ability to earn.

The majority of the delivery apps have driver reward programs, however, and your acceptance rate usually affects them. For instance, to become a DoorDash Top Dasher, you will need an acceptance rate of at least 70%.

With that said, there are a lot of differing opinions on whether these reward programs are worth it in the end. Drivers often argue that to even achieve the stats necessary to be accepted into those programs, you end up needing to take a lot of smaller, low-paying orders, resulting in less pay overall, even with the perks.

Can You Be Penalized For Low Acceptance Rates?

That said, the majority of the big food delivery apps will not punish you for low acceptance rates. Uber Eats, for instance, makes it clear in their documentation:

Your acceptance rate is no longer displayed in the Uber app. While it is important to accept trips when you are able, we no longer display your acceptance rate because it does not have an affect on your ability to earn promotions.

DoorDash also states in their documentation that “There is no minimum acceptance rate”. So, if you were ever worried that declining orders that don’t fit your needs would affect your bottom line, the answer is virtually no.

Related: Standard IRS Mileage Rates Increase In 2022

Food Delivery Driver Tip 2: Car Care 101

In the gig economy, your car is your lifeline. It’s your direct connection to your livelihood. Thus, you should treat it with as much care and respect you do yourself.

Keep your tires filled. Change your oil when the sticker says so. Practice general good driving habits (soft breaking, minimize harsh accelerations, etc.). It may also be worth it to keep a maintenance log, whether you download one from Google or use a smartphone app.

Keeping track of your mileage using a modern and robust mileage tracker app like TripLog is another great way to understand your vehicle usage. Like with any sort of care, taking preventative measures early on can help prevent long-term expenses.

cars driving on road should track their mileage

Food Delivery Driver Tip 3: Deliver at Dinner (In the Right Places)

Most veteran meal delivery drivers will tell you that you should deliver at night to maximize your profits. This is typically when people will order from nicer restaurants, which tend to result in higher tips.

If you need to, try and commute to a higher-income city or nicer part of town. Those types of places tend to have more expensive restaurants and customers may tip you better as well.

Food Delivery Driver Tip 4: …But Don’t Ignore the Off-hours!

The strengths of delivering around dinner time are pretty clear. But, there might be other days and times that are less active that still might help you earn big.

For instance, people ordering breakfast or brunch on weekends might tip better. In a good chunk of the year, hungry football watchers will be ordering throughout the entire day on Sunday (especially on the west coast, where games start at 10 am!).

Related: Are You An Independent Contractor Or An Employee?

In this example, because fewer people think to deliver on Sundays mornings, you might experience better-than-average results. Give it a shot and see if your area is one where this strategy can work.

Food Delivery Driver Tip 5: Study Up

If you’ve been in the biz for a while, you probably have a good idea of your favorite locations and restaurants. If you’re just starting out, it can be helpful to do some preliminary research on the areas you’re working in.

Reddit user /u/gtfnfnw suggests learning “which restaurants have a delivery radius that’s way too big and takes you 30 minutes away from your hot spots, [and avoiding] these if possible”. Take notes, whether mental or physical, and create a schedule that works for you.

Don’t be afraid to experiment as well! There may be some specific times and situations that are unique to your area that may give you an advantage over competing delivery drivers.

Food Delivery Driver Tip 6: Ditch Pen & Paper Mileage Tracking

Many food delivery drivers just starting out don’t realize the importance of tracking their mileage and expenses. Come tax time, drivers can save hundreds or even thousands of dollars each year from tax deductions and time savings.

In our internal studies, we have found that drivers lose around 2 minutes per stop when entering their mileage manually. Added up over a workday, workweek, month, and year, drivers could be losing dozens of hours of time that they could be spending delivering. 

TripLog is the market’s most accurate and feature-rich mileage tracking app. With precise automatic tracking options and a detailed analytics system, you will see your savings start rolling in from your very first drive.

Download TripLog for free on iOS or Android, or visit our pricing page to choose the right plan for you. For additional information, read our mileage reimbursement guide.

DoorDash Top Dasher Requirements: Everything You Need To Know

doordash driver top dasher program guide

DoorDash offers a program designed to reward and incentivize high-performing veteran delivery drivers. Today, we’re going to discuss the requirements to become a Top Dasher and whether it’s worth it to try and become one.

How Do I Become a Top Dasher?

DoorDash has a few specific requirements for becoming a Top Dasher. The requirements, according to the DoorDash website, are as follows: 

  • Customer rating of at least 4.7
  • An acceptance rate of at least 70%
  • Completion rate of at least 95%
  • 100 completed deliveries during the last month
  • At least 200 lifetime deliveries completed

Related: Top 5 Must-Know Tips For Independent Contractors

How to Achieve These Requirements

Most of the above-listed requirements are fairly straightforward, like achieving 200 lifetime deliveries and 100 completed deliveries in the past month. As for getting a high customer rating, this comes down to getting your goods to your customer as quickly as possible, as well as ensuring to closely follow their instructions and respect their unique needs. 

Your acceptance rate is the rate at which you accept deliveries (or dashes). The app will offer you a delivery, and whether or not you accept to deliver it will determine your delivery rate. Completion rate works similarly; this metric monitors how often your accepted deliveries get delivered. 

On the second day of each month, if these requirements are met, you will qualify to be a Top Dasher.

Top Dasher Benefits

There are three major benefits to becoming a Top Dasher. They are as follows:

“Dash Now” Anytime: As a Top Dasher, you can now dash anywhere, on your own schedule. Regular DoorDash drivers are still required to schedule their hours, or use the “Dash Now” feature during busy times. 

Delivery Priority: If two DoorDash drivers are able to accept the same order, the driver with Top Dasher status will be given priority.

High-value Order Priority: Top Dashers will also get priority over orders with a total value of $30 or more. 

Is Being a Top Dasher Worth It?

At face value, it might seem as though striving to become a Top Dasher is a no-brainer. However, some drivers have found that the benefits don’t outweigh certain issues.

Related: Standard IRS Mileage Rates Increase In 2022

For example, achieving the 70% order acceptance rate can cause drivers to take extremely low-paying orders. If the DoorDash app offers you a $3 order and you reject it, that will count against your order acceptance rate. 

In addition, the perk of being able to drive (or “Dash Now”) at any time may not be the most useful for a lot of drivers, either. Since all drivers can Dash when a given zone is busy, the tangible benefits of delivering when a zone isn’t busy, as possible by being a Top Dasher, may not be high.

Save Money – And Time – In the Gig Economy

The benefits and downsides of being a Top Dasher come down to your style of delivering and the unique challenges your area of delivery forces you to deal with. No matter what, though, gig economy workers like DoorDash drivers only benefit from learning about and taking advantage of as many tools and resources as possible.

One of the most effective ways for drivers to save money and earn more is to use powerful mileage tracker apps like TripLog to track their mileage and business expenses. With six different automatic mileage tracking options, drivers can be confident that they’ll never miss a tax-deductible mile.

Download TripLog on iOS or Android today, or, if you have a team of drivers, schedule a complimentary live web demo to see how TripLog can help your company manage its employee mileage reimbursements. You can also explore our pricing page or try out our mileage reimbursement savings calculator.

Thanks for reading!

IRS Mileage Commuting Rule: What Businesses Need To Know

irs commuting from home to work rules

A common question many workers and business owners have is whether their commute to their place of work is tax-deductable or reimbursable. As a general rule, the IRS doesn’t allow trips from your house to your place of work to be deductible. In addition, businesses typically don’t reimburse their employees for their commute from home to the office or vice versa.

For the majority of businesses and drivers, that’s just about all you need to know. With that said, there are certain minor exceptions and instances that go against that grain. Today, we’re going to discuss what the IRS considers a commute, what those aforementioned exceptions can be, and how TripLog can help companies manage their mobile team members’ commutes.

Defining the IRS Mileage Commuting Rule

The IRS defines commuting as “the cost of transportation between your home and your main or regular place of work” and states that these expenses cannot be deducted from your taxes. Such a trip would be defined as a personal trip, and personal trips are not eligible for deductions under the IRS’ rules, and businesses generally do not reimburse personal trips (although they could if they chose to).

Should Businesses Provide Mileage Reimbursement For Commutes?

Generally speaking, there is no federal mandate requiring businesses to reimburse their employees for anything related to the business or personal uses of their vehicles. Outside of a few specific states, businesses usually offer company mileage and expense reimbursement as a perk to help hire and retain strong candidates.

Related: IRS Mileage Rate Explained | How Is The Standard Mileage Rate Determined?

Even with businesses that choose to offer a mileage reimbursement plan, most will not offer any sort of reimbursement for personal trips, commute to and from their place of work included. This is a standard practice and will generally not have any effect on businesses’ abilities to hire or retain quality employees.

With TripLog, it’s never been easier to set custom daily commute mileage exemption rules. In the TripLog administrator dashboard, business owners and managers are able to deduct certain portions of their mobile team member’s trips from their mileage reports.

TripLog Unique Feature: Commute Mileage Exemption

One of TripLog’s many unique features that sets it apart from other mileage and expense trackers is our commute mileage exemption feature. Companies on the TripLog enterprise plan are able to set rules exempting certain trips from their employees’ mileage logs.

Companies are able to exempt the following trips from their employees’ mileage logs:

  • The total trip mileage of the day
  • Both the first and last trip of the day
  • Only the first trip of the day
  • Only the last trip of the day

For example, if they were to choose the “Both the first and last trip of the day” option, then their employees that use TripLog would have their first and last trips (i.e. their commute to and from their place of work) exempt from the companies’ mileage reports. This is just one of many unique features and capabilities that set TripLog apart from other mileage and expense trackers.

businesses filing taxes using triplog

IRS Mileage Commuting Rule Edge Cases 

As stated above, there are certain specific instances where you can deduct your “commute”, which include the following:

  • If you’re traveling between your residence and a temporary work location or job that you expect to work at for less than a year
  • If you’re traveling from one job to a secondary or temporary job or job site 
    • Keep in mind that your commute from home and your second job on, for example, a day off from your main job is not deductible
  • If you’re traveling between a temporary work location and your secondary job
  • If you are traveling from your tax-deductible home office to your main job

Home Office Rules

If you have established a home office, you are able to deduct certain trips from your taxes, assuming you are driving from your home office to another established place of work. For example, if you are a carpenter and have a workshop or studio downtown but you do all of your administrative work at your qualifying home office, you are able to deduct the trip from your home office to your workshop.

Related: How Employees Working From Home Deduct Their Mileage

Keep in mind, the IRS has very specific rules and regulations regarding what is or isn’t a home office, so be sure to review these requirements and keep them in mind when you do your taxes.

  • If you are required for work to travel to another location, which isn’t your regular workplace or home.
  • If you travel between your home and a temporary job, which you expect to work at for less than one year.
  • If you travel between your main job and a second job.
  • If you travel between your home and a temporary work location if your main job is at another site.
  • If you travel from your regular workplace to a temporary job site.
  • If you travel between a temporary work location and your second job.
  • If you have a deductible home office, and you travel to your main job, this is considered as driving between workplaces.

Talk to the Mileage Experts Here at TripLog

The team here at TripLog pride ourselves on our knowledge and understanding of all things mileage and expense reimbursement. TripLog’s mileage tracker app gives drivers an accurate and efficient way to track their mileage, and our comprehensive web dashboard gives administrators full access to their team’s reports.

To learn more about how TripLog can help save your company time and money, business owners can schedule a complimentary live web demo for your company. Feel free to ask for more information on how TripLog can help manage your team’s commutes!

Standard IRS Mileage Rates Increase In 2022

mileage reimbursement rate 2022

The IRS has finally announced the standard business mileage rate for 2022. As we predicted previously, the rate has gone up from 56 cents to 58.5 cents.

This is the rate that taxpayers can use when they file their 2022 income taxes if they are claiming a mileage deduction for a vehicle that they use for business. Companies are also welcome to use this rate when reimbursing their mobile employees, but it’s worth noting that this is a just recommendation in most states, not a federal requirement.

Related: IRS Mileage Rate Explained | How Is The Standard Mileage Rate Determined?

In addition to the business mileage rate increasing, the rate for medical and armed forces-related moving mileage has increased from 16 cents to 18 cents. The rate for miles driven in service of charitable organizations remains unchanged from last year.

triplog best mileage tracker app for business

How the IRS Determines the Standard Mileage Rates

While we discussed this in further detail in a previous blog post, it’s worth mentioning briefly how the IRS determines its standard mileage rates.

Every year, the IRS hires an independent contractor to conduct a study into what the fixed and variable costs of owning and operating a motor vehicle in the United States are. These costs can include things like the cost of maintenance, oil changes, fuel prices, tires, as well as the overall depreciation of the car.

Let Us Help You Develop a Mileage Plan For Your Company

Here at TripLog, we live and breathe mileage. With our sleek and intuitive mileage tracker app and comprehensive administrator dashboard, we are by far the market’s most knowledgable organization when it comes to mileage tracking and reimbursement.

Our team is standing by to help your company save time and money with a robust and detailed mileage reimbursement plan. Please schedule a complimentary live web demo for your company to learn more about how our product can help your streamline your company mileage process.