IRS Mileage Rate Explained | How Is the Standard Mileage Rate Determined?

triplog irs mileage rate calculations

The standard business mileage rate in the United States is a yearly recommendation released by the IRS. It is used to help companies determine a fair reimbursement rate for their employees who use their personal vehicles to conduct business on behalf of their place of work.

These rates can vary depending on the year. For instance, the rate per mile for business use is up by one-and-a-half cents compared to the previous year (65.5 cents in 2023 compared to 62.5 cents in the latter half of 2022).

Here are the 2023 mileage rates:

  • $0.65.5 per mile driven for business use
  • $0.22 per mile for trips that are for medical purposes
  • $0.18 per mile for moving
  • $0.14 per mile driven in the service of charitable organizations

The IRS Mileage Rate for Businesses Explained

It’s important for companies to understand that the standard IRS mileage rate is little more than a recommendation (for most states). Companies can reimburse (or not reimburse) based on whatever they deem is fair.

Related: 6 Common IRS Tax Penalties For Small Businesses

With that said, many companies choose to use the standard IRS mileage rate for simplicity purposes. In addition, offering mileage reimbursement can be a great way to attract high-quality candidates to your company.

Can You Reimburse for More Than the IRS Standard Mileage Rate?

If your company chooses to reimburse for more than the recommended IRS rate, your employees will be subject to income tax on the amount earned about that rate. Let’s take an example:

The standard mileage rate for 2023 is 65.5 cents per mile, but let’s say you work in a high-cost-of-living area. You could choose to reimburse them for more. For example, let’s say you choose to instead reimburse at 70 cents per mile.

Let’s say your employee drove 200 miles in January 2023. You would take that mileage and multiply it by the standard rate:

200 * $0.655 = $131 This is the amount you would be reimbursing that’s tax-free.

200 * 0.70 = $140 This is the actual amount you gave to your employee as reimbursement.

That $9 difference would be taxed as income for your employee.

Related: 3 Reasons Why Your Small Business Needs An Accountant

You could also reimburse for less than the standard rate if you choose. However, you will need to confirm that their mileage expenses aren’t causing them to dip below minimum wage.

calculate reimbursement using irs mileage rate

Is the IRS Mileage Rate the Only Method for Reimbursement?

There are various other methods for calculating mileage reimbursements and deductions. The IRS mileage rate is one of them.

You can also choose to calculate the actual costs of operating your vehicle. Your company could also implement a fixed and variable (FAVR) plan.

How Is the IRS Standard Mileage Rate Determined?

According to the IRS, “The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile”. These costs include both fixed and variable mileage expenses.

These “fixed and variable costs” factor in just about anything a car owner can imagine will affect their wallet. Things like fuel prices, costs of maintenance, oil changes, tires, insurance, and just general depreciation are all factors that affect the IRS’ decision each year.

What Goes Into the Standard Business Mileage Rate Determination?

The IRS doesn’t release specific reasons as to why the mileage rate increases or decreases in a given year. All we know is that it relates to whatever their study claims are the costs of owning and operating a motor vehicle. However, the changes the IRS makes can seem confusing at face value.

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

For instance, while the price of gas in the United States had decreased between December 2014 and December 2015, the standard mileage rate increased by 1.5 cents. The problem with this is that there are other major factors that go into the costs of owning and operating a vehicle other than gas.

In fact, according to a study conducted by AAA, gas only accounts for about 35% of the yearly costs of owning a vehicle. As it turns out, the biggest costs come simply from depreciation, at 39%. The remaining factors make up a smaller percentage.

Properly Tracking Your Mileage

Whether you’re self-employed, an employee, or need a company mileage tracker solution, mileage tracking is extremely important. Instead of manually calculating your mileage, we recommend using a powerful mileage tracker app like TripLog.

TripLog is the best way to reduce the time and effort it takes to calculate your mileage expenses. Download TripLog for free on iOS or Android, or schedule a complimentary live web demo.

Self-employed Worker Mileage Deduction Guide

tax deductions for self employed and business owners

If you’re self-employed and use your vehicle for work, you can deduct many mileage expenses from your taxes. These deductions can include oil changes, maintenance, repairs, tire replacements, rotations, etc.

If you use a car solely for business, you have the right to deduct all expenses related to your work. If you use your personal car for business and personal activities, it’s a bit different. You can only use the expenses associated with conducting business when taking a deduction.

Depending on how much you drive, you could be saving thousands of dollars every year!

Self-employed Mileage Guide: Get To Know the Laws and Regulations

It’s important for self-employed individuals to fully understand the rules and regulations regarding mileage deductions.

Related: Rideshare Tax Guide: What You Need To Know For 2023

Secondly, while the information within these information hubs acts as a helpful guide, it should not be taken as advice from accounting or tax professionals. You should always review the IRS website for the most accurate and up-to-date information.

In addition, you should consider checking with a tax professional to ensure that you understand all possible requirements for taking tax deductions.

calculate mileage for self employed or business owners

Self-employed Mileage Guide: Two Different Ways To Calculate Mileage Deductions

Self-employed individuals can use two different methods for calculating mileage expenses for tax deductions.

Standard Mileage Rate

If you choose to use this method, your calculations will be subject to IRS requirements. For example, as of January 2023, the standard mileage rate is 65.5 cents (or $0.65.5) per mile according to the IRS.

Actual Expenses

This is another method for self-employed people to claim deductions for business-related activities. With this method, you can list expenses like gas, repairs, insurance, maintenance, etc.

The IRS issues an updated list of what business owners and self-employed individuals can claim when using this method. You can use both methods, but it’s necessary to understand which rules should be applied to each method.

Choose the Method That’s Right for You

Keeping track of your trips and their length (in miles) is critical when using the standard mileage rate. Your deduction is based on how many miles you drive.

For those using actual expenses, keeping track of all expenses is required.

Self-employed Mileage Guide: What To Do When You Own or Lease a Vehicle

To qualify for the standard IRS mileage rate, self-employed individuals or business owners must own or lease the vehicle(s) that they use for work. The criteria for ownership and leasing are a little different.

If You Own the Vehicle

If you have your own vehicle, then you must follow these requirements:

  • During your business’s first year of operation, you must use the standard IRS mileage rate. You can switch back and forth between the mileage rate method and the “actual expenses” method for all following years.
  • There can be no claimed depreciation deductions on the car, except by the straight-line method. The mileage rate already accounts for depreciation.
  • There can be no claim of a section 179 deduction (the vehicle’s special depreciation allowance).

Related: Top 5 Must-Know Tips For Independent Contractors

If You Lease Your Vehicle

Here are the regulations you must follow if you leased your vehicle:

  • You must use the standard mileage rate for deductions during your first year of operation.
  • For all subsequent years, you should use the standard mileage rate method during the entire period the vehicle is being leased, including renewals.
  • Simultaneously using five or more vehicles for the business (i.e., fleet operations) is not allowed. It is allowed if you switch between each vehicle.
self employed individual driving car

What Kinds of Vehicles Qualify for Mileage Deduction?

Cars, vans, pickups, panel trucks, etc., are vehicles that qualify for the self-employed mileage deduction.

Self-employed Mileage Guide: How to Keep Track of Your Mileage

The IRS has some specific record-keeping requirements for mileage tax deductions. For all business-related mileage expenses, the IRS requires self-employed individuals and business owners to log the following:

  • mileage for each business use
  • total mileage for the year
  • time, place (your destination), and purpose

You’ll need to record your records at or near the time of the incurred expense. The IRS accepts methods like trip diaries, logs, Excel sheets, etc.

Related: Company Mileage Reimbursement Explained

If you are using a vehicle for both personal and business, your records should show the ratio as a percentage. This will include a log of all trips and a calculation of all the times you conducted business.

In the past, drivers have used outdated and time-consuming pen-and-paper mileage tracking methods. Today, mileage tracker apps make things significantly easier.

To make tracking your mileage for tax deductions easy, TripLog’s mileage tracker app provides a robust and sleek way for self-employed individuals and business owners to keep accurate and detailed records.

Self-employed Mileage Guide: Calculating Tax Deductions for Business Usage

Determining what percentage of your vehicle use is business or personal is very important. This calculation isn’t too complex, but examples are always helpful. Let’s take a look:

  • Let’s say you have taken ten personal trips over the course of a month, with each trip equaling 20 miles. Total personal miles within that month would come to 200 (10 * 20 = 200).
  • Within the same month, say there were three business trips taken that totaled 100 miles.
  • When figuring how much you used your vehicle for business, you can divide your business miles by the total number of miles driven.
    • Take your 200 personal miles and your 100 business miles and add them up. Here, we get 300 total miles.
    • Divide your business miles (100) by your total miles (300). Thus, you have used your personal vehicle for 33% of your total use.
  • Multiply the number of business miles with the 2023 mileage rate of 65.5 cents.
  • This example shows that the business mileage expense for this month would equal $65.50 in (100 * 0.585).

Self-employed Mileage Guide: Transportation That Qualifies for Business Deduction

There is no maximum for the number of miles you can claim for a deduction. Still, you should always keep in mind how many miles you drove for business purposes. There are various additional items to keep in mind while considering mileage deductions for business.

Related: Are You An Independent Contractor Or An Employee?

What Constitutes Business Mileage?

  • Driving between two different places of work
  • Meeting with clients or customers
  • Running errands during the workday (picking up office supplies, etc.)

What Does NOT Constitute Business Mileage?

  • Commuting to work from home
  • Carrying tools or other business items during a commute
  • Having advertising or company information displayed on your vehicle

Please visit the IRS website for additional information regarding working from home and related guidelines.

Self-employed Mileage Guide: Additional Expenses

Self-employed workers should consider that other expenses, such as parking fees, tolls, and related costs incurred when conducting business, often qualify for deductions. These costs do not qualify for deductions if you’re commuting to your place of work.

We built TripLog from the ground up to make saving money on your taxes easy. Download our app on iOS or Android, or schedule a complimentary live web demo today.

To learn more about our company mileage features, click here. Happy tracking!

How to Calculate Your Mileage for Taxes or Reimbursement

calculate mileage for reimbursement

Calculating your mileage reimbursement is not a particularly difficult process. In this short read, we’re going to show you how to easily calculate your mileage reimbursement.

With that said, your employer may use a different mileage rate than the standard IRS rate. As discussed in our previous article, if you are reimbursed for more than the IRS rate, it will be considered income and will be taxed as such.

How Businesses Use The IRS Standard Mileage Rate To Calculate Reimbursements & Tax Deductions

There are two major scenarios that company owners should think about regarding mileage reimbursement. It all comes down to whether your employees are using their personal vehicles or a vehicle provided by the company.

Related: Why TripLog is the Best Mileage Tracker App (2023 Comparison)

Let’s say an employee drove 200 miles for business using their personal vehicle. In this scenario, let’s also assume the company is using the 2023 standard IRS mileage rate of 65.5 cents per mile.

Below is a simple reimbursement calculation using this rate:

  • reimbursement amount = miles * rate
  • $131.00 = 200 miles * 65.5 cents
calculate mileage with irs regulations

Now let’s say your employee uses a vehicle provided by your company and they drove the same 200 miles. Since the employee does not need to worry about the vehicle’s depreciation, you wouldn’t use the IRS standard mileage rate here.

Here, it’s up to your company to decide what you feel is fair to reimburse. Let’s say your company set the rate at 25 cents per mile. You would use the same equation, but the total reimbursement will be different.

  • reimbursement amount = miles * rate
  • $50 = 200 miles * 25 cents

If you drive your personal vehicle for work, you will be reimbursed more. With that said, this comes with the trade-off of more wear and tear on your car.

Note: the standard IRS mileage rate is not the only option for reimbursement. Companies can implement, for example, a fixed and variable rate (FAVR) plan as well.

Calculating Your Reimbursement When Using Your Vehicle For Both Business and Personal Use

If you use your vehicle for both business and personal use, it will be important to differentiate the mileage accumulated. This makes it easier to know what to claim for depreciation and other costs related to operating your vehicle.

Related: What To Do If You Forget To Track Your Mileage

Let’s say that you’ve driven your car 300 miles for personal reasons (commutes, etc.) within a given period. Within that same time frame, let’s say you also drove a total of 100 miles for business purposes using the same vehicle. In this example, you have driven for 400 total miles.

Calculating Business vs. Personal Mileage

You can calculate the percentage of how many business miles you’ve driven by dividing the business miles by the total miles (100/400=0.25). In this example, business mileage accounts for 25% of your total mileage.

To calculate your mileage reimbursement, you can take your total business miles and multiply them by the standard IRS mileage rate.

$0.655 * 100 miles = $65.50

Track and Calculate Your Mileage The Right Way

Sure, you could do the calculations on your own, but using a mileage tracker app like TripLog will save you untold amounts of time and effort. TripLog covers all the aspects of tracking, calculating, and reporting mileage, much easier than ever before.

TripLog is the best company mileage tracking solution on the market. Download our app for free on iOS or Android today to see for yourself, or schedule a complimentary live web demo.

The Healthcare Apps You Need To Know About For 2023

Triplog mileage tracking app healthcare apps

Advancements in mobile technologies and innovative digital solutions incorporating AI, machine learning, and big data are disrupting the healthcare market and present a great opportunity for market players to create more personalized value and interactive state-of-the-art user experiences, helping individuals better manage their health and well-being in real-time and play an invaluable role in the healthcare process.

In today’s blog post, we will discuss a few mobile technologies under our radar that we believe are addressing the frustrations of the healthcare journey of individuals around the globe by making healthcare more personal and transparent.

These smartphone apps are equally empowering patients and providers by giving them the tools they need to improve communication and conversations, transparency, and efficiency in the health industry.

Some Fast Facts Before We Dive In

  • Health-related mobile applications available to consumers now surpass 318,000 — nearly double the number available just two years ago.
  • The global mHealth app market is projected to be valued at US$102.35 billion by 2023.
  • According to a FICO Global survey, the majority of healthcare consumers (80 percent) prefer to use their smartphones more to interact with healthcare providers. 56 percent of people worldwide trust health care organizations with personal data.

Related: Medical Mileage Deduction: Everything You Need To Know

Main Benefits and Types of Healthcare Apps

There are a plethora of benefits for both patients and medical workers. A few notable ones are:

  1. Save time
  2. Improve transparency & communication
  3. Streamline medical processes

Even though there are numerous healthcare applications, there are roughly five main categories, such as:

Clinical Data

Clinical assistant apps are meant for medical practitioners. These applications store medical data electronically and all in one place, allowing you to easily access them whenever you need.

Digital charts, as well as digital health metrics and records,  are more easily accessible by patients and provide more clarity as to the patient’s history and medical journey.

In most cases, doctors and practitioners would need to go to the clinic or a hospital and collect the charts and data ‘by hand’. The trip itself consumes a lot of time, and it’s quite easy to imagine a situation that a chart or two are missing.

Related: Home Care Mileage Reimbursement – Why Companies Should Care

In such a scenario, valuable time is lost which could’ve been used to help more patients. This clarity is crucial for patients and doctors for timely and effective decision-making regarding the patient’s medical journey.

Electronic Visit Verification (EVV)

With the 21st Century Cures Act, EVV is now a federal requirement for personal care services and home healthcare services. The government has allowed each individual state to decide how they want to handle their respective rollouts.

Most states provide a free option for agencies, though they also typically allow them to choose different EVV providers at their own expense. If you’re curious to hear how TripLog can help support your EVV needs, feel free to chat with our sales team!

Virtual Monitoring & Care

Certain healthcare apps allow you to monitor your patients from a remote location, and one of the main reasons why this is achievable through a digital app is because certain situations don’t require the physical presence of a doctor and/or medical staff. Patients can easily remain at home while still being supervised and connected to their doctor, while doctors can monitor progress more efficiently.

healthcare app mychart home healthcare

Medical Reference

Apps such as mHealth (mobile health) fall under the category called “professional reference tools”. Again, one of the main benefits of such healthcare apps is that they replace physical reference guides, making them less susceptible to human error and more easily accessible. Professional reference tools feature the International Statistical Categorization of various diseases and a myriad of health problems.


Productivity and efficiency are two of the most important aspects of any line of work, medicine in particular. The more productive the doctor is, the more patients he (or she) will be able to assist.

Basically, this type of application aims to improve digital charting, internal communication, remote dictation, scheduling, and plenty of medical and non-medical related issues and tasks.

An example of a ‘Productivity’-type app is TripLog’s automatic mileage tracker. Shameless plug but it’s important to note that TripLog is not only for real estate agents and bookkeepers, but one of TripLog’s largest enterprise customers is a healthcare organization. TripLog has designs and functionalities built-in specifically for healthcare providers.

Related: Mileage Reimbursement Explained

For example, automatic mileage tracking & reimbursement, fleet tracking, and other TripLog features applicable to healthcare organizations are HIPAA compliant so providers can automate and streamline their internal processes without worrying about regulatory restrictions.

Personal Health and Healthcare Services

These apps are built keeping both consumers (patients) as well as medical service providers in mind. From a provider’s perspective, mobile apps build patient engagement and help with ensuring more personalized service.

From a patient’s perspective, it’s much easier to do quick searches and compare the services available. In addition, according to a FICO Global Survey, almost two-thirds of smartphone users want to receive medical advice through digital channels instead of visiting a doctor. In addition, 71 percent of smartphone users are open to offers of relevant healthcare services from businesses, and 53 percent are open to provider-initiated communications.

Final Words

For medical service providers, even though the healthcare industry is highly regulated, data security and privacy are especially critical, and consumers are required to opt-in, given the benefits of mobile apps in the healthcare industry, these do not seem to be an impediment to adoption.

Similarly, for patients, the improved clarity, accessibility to doctors and reports, and overall more control over their medical decisions and journey far outweigh the addition of yet another app on their smartphones. At TripLog, we agree that the disruption in the healthcare industry via smartphone applications is much needed and a welcome change.

Related: Medical Mileage Deduction: Everything You Need To Know

Using a company mileage tracker like TripLog can be a great way for healthcare companies to save money. To learn more, visit our pricing page, or schedule a complimentary live web demo today.

2023 IRS Standard Mileage Rate Explained

irs mileage rates 2020 2021 2022

The 2023 IRS standard business mileage rate is designed to cover the cost of workers using their personal vehicles to conduct business. Whether you’re an employee using your personal vehicle to do work on behalf of a company you work for or you’re self-employed, the IRS provides a rate for business reimbursement and tax deductions.

It’s worth noting that employers are not required to use the rate published by the IRS. However, if the employer offers mileage reimbursement for their employee that goes above the rate, the employee must pay income tax on that additional amount.

There are different rules for individuals who use their personal vehicles for business compared to those who use them for medical or charitable purposes. Please view our other pages in this guide for specific rules relating to mileage tracking for employees, employers, or self-employed workers.

What is the 2023 IRS Mileage Rate?

Beginning January 1, 2023, the standard mileage rates for vehicles, including vans, pickups, and panel trucks, are as follows:

  • $0.65.5 per mile for business
  • $0.22 per mile for medical purposes
  • $0.22 per mile for moving (used only for Armed Forces individuals on active duty)
  • $0.14 per mile for service of charitable organizations

If you want more detailed information about the standard mileage rates, you can find it on the IRS website.

Related: IRS Mileage Log Requirements for Tax Deductions & Reimbursements


Previous Years’ Standard IRS Mileage Rates

The IRS standard mileage rates typically change each year, usually going up or down by a cent or two. Here are the mileage rates since 1997:

Period Business Charity Medical & moving
2022 (Jul – Dec)62.51422
2022 (Jan – Jun)58.51418
Jul 1 – Dec 31, 2011 55.51423.5
Jan 1 – Jun 30, 2011 511419
2009 551424
Jul 1 – Dec 31, 2008 58.51427
Jan 1 – Jun 30, 2008 50.51419

How To Use the 2023 IRS Mileage Rate

Proper mileage tracking is an often tedious and time-consuming process for employers, employees, contractors, freelancers, and business owners of all types. Using a company mileage tracking app like TripLog makes calculating your mileage easier and faster.

You can download TripLog’s mileage tracker app for free on iOS or Android, or schedule a complimentary web demo today.

Amazon Flex Mileage Tracking | 5 Tips for Amazon Flex Drivers

tips to save amazon flex drivers money

Amazon has been a boon over the last several years, offering Amazon FBA (Fulfilment by Amazon) and Amazon Flex. Like many in the gig economy, Amazon Flex offers drivers the ability to become an Amazon delivery partner.

Drivers can set their own hours, picking up packages from an Amazon delivery station and delivering them to customers. Shifts are available in blocks of 3- and 6-hour increments.

Like any independent contractor, such as Uber or Lyft drivers, those working through Flex use their own vehicles. This means that Flex drivers can deduct and save thousands of dollars on their taxes every year!

To do so properly, you’ll want to use a powerful mileage tracker app like TripLog. Here are some of the best ways using a mileage tracker app can help Amazon Flex drivers save time and money.

Amazon Flex Mileage Tracking Tip #1: Find the Mileage Tracking Method That’s Right for You

Amazon Flex drivers can choose from up to six different mileage tracking options when using TripLog.

Options include MagicTrip, which allows drivers to simply get into their vehicles and begin driving, as well as the new TripLog Drive, which increases tracking accuracy and reliability. Each of these options makes use of the vehicle’s existing Bluetooth capability.

Does Amazon Flex Track Mileage?

Currently, the official Amazon Flex app (often referred to as the “Rabbit”) does not have a built-in mileage tracking method. If you want to maximize your tax savings, you will need to download a separate mileage tracking app.

Simply download TripLog on iOS or Android and get started tracking your mileage in minutes!

Amazon Flex Mileage Tracking Tip #2: Use a Mileage Deduction Calculator To See How Much You Can Save

For drivers who want to know exactly how much they saved in taxes in a given month, week, or down to the individual trip, try our mileage deduction and reimbursement calculator. Taken directly from existing tax forms, Amazon flex drivers can now be ahead of the curve by knowing exactly how much in tax deductions they earn as they work their shifts.


Amazon Flex Mileage Tracking Tip #3: See Your Trips at a Glance With Daily Map View

TripLog’s Daily Map View feature is a great way for Amazon Flex drivers to see their driving routes for their entire day and review previous trips. This provides a big picture to drivers while not having to rely solely on text-based overviews.

Related: Google Maps Mileage Tracking Explained

Amazon Flex Mileage Tracking Tip #4: Daily Trip Journey – All of Your Trips in One Place

With Daily Trip Journey, Amazon Flex drivers don’t have to worry about looking at each individual trip one at a time.

Save valuable time by viewing all of your trips, each day, together. This feature also allows drivers to name and select those common locations with a touch of a button.

Amazon Flex Mileage Tracking Tip #5: OCR Receipt Scanning Makes Expense Tracking a Breeze

While mileage tracking is critically important, Amazon Flex drivers can also use TripLog to track their business expenses and income. By using the camera available on iOS and Android phones, drivers can easily take a snapshot of their receipts and categorize transactions so that they are ready for tax time.

With gig economy opportunities growing rapidly, Amazon Flex drivers are looking for tools to help manage and grow their businesses. Company mileage trackers like TripLog provide easy-to-use tools and apps that allow drivers to easily set and track their mileage, making it one less thing they have to worry about.

To get started with TripLog, download the app on iOS or Android. You can also schedule a complimentary live web demo, or visit our pricing page to learn more.

Is Mileage Reimbursement Considered Taxable Income?

track mileage reimbursement triplog

If you’re a mobile employee who uses your personal vehicle for work, you are probably getting reimbursed by your employer. You may be wondering if that reimbursement is taxed or if all of it goes back into your pocket.

Generally, mileage reimbursement is not taxed as income. However, there are specific scenarios when this rule can be broken. Here’s everything you need to know on whether mileage reimbursement can be taxed as income.

When Mileage Reimbursement IS NOT Taxed

Your reimbursement is tax-free under these conditions:

  • The company is using the IRS standard mileage rate (and employees qualify for reimbursement)
  • The reimbursement happens under an accountable plan

To be considered accountable, the reimbursement must be based on services done for an employer (that is to say, for business purposes). In addition, it should be adequately accounted for, and employees should return any excess reimbursement within a reasonable amount of time.

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

The IRS explains the requirements for an accountable plan on its website. For more specific information related to your company type, see the appropriate page in this guide.

mileage reimbursement taxable triplog

When Mileage Reimbursement IS Taxed

If your mileage reimbursement does not meet the IRS accountable plan requirements, it will be taxed as income. Here are some specific instances where reimbursement is taxed as income:

  • If your reimbursement exceeds the IRS standard mileage rate, it is taxed as income.
  • Any excess reimbursement that employees did not return within a reasonable amount of time is also taxed as income.
  • If the reimbursement was not based on adequate records, it could be taxed as income as well.

As long as your mileage reimbursement is less than or equal to the IRS standard mileage rate and follows an accountable plan, the reimbursement will not be taxed.

Develop a Mileage Plan With TripLog

Managing your company’s mileage reimbursement process does not need to be complicated. Ditch those tedious and inaccurate pen-and-paper mileage logs for a modern solution!

Using a modern mileage tracker app is the best way to track your team’s mileage for reimbursements. Company mileage tracking has never been easier.

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

IRS Mileage Log Requirements for Tax Deductions & Reimbursements

mileage log requirements for irs

If you use your personal vehicle to conduct business and plan to take tax deductions on your mileage, or you’re an employee getting reimbursed, it’s important for you to understand the necessary various record-keeping requirements. This article will discuss the IRS mileage log requirements and the best ways to log your miles.

The IRS has specific rules and regulations related to keeping track of your mileage. In addition, your employer may also have its own guidelines you will need to follow.

What Are Adequate Records As Defined By The IRS?

When it comes to keeping adequate records, the IRS’ guidelines are fairly straightforward. They include:

  • Your total business mileage
  • The total mileage accumulation for the year (business + personal)
  • The trip’s time (date), place (destination), and purpose

Best practice tip: record your activity as soon as possible. Don’t wait until later that evening or the next day.

Formats The IRS Accepts

You can use a variety of formats for your IRS mileage log. It can be a CSV, PDF, Excel file, etc. The format doesn’t matter too much.

Related: What To Do If You Forget To Track Your Miles

The most important thing is to keep accurate records. If you’re an employee, your employer will tell you what records they need and what format they should be in.

How Can I Keep Accurate Mileage Records?

To make things simpler, companies and self-employed individuals have begun to ditch manual mileage and expense logs. These manual logs can be time-consuming and tedious, as well as highly inaccurate.

Modern digital mileage tracking and reimbursement solutions like TripLog make tracking easier than ever and can export IRS-ready mileage logs. TripLog can also allow you to set custom rules, track your fleet in real-time, and reimburse with impeccable accuracy.

Is Taking an Odometer Reading Every Trip an IRS Requirement?

According to the IRS, you do not have to record your odometer readings at the beginning and end of each of your trips. The only time you have to log your odometer readings is at the beginning and end of the year (and if you start using a new vehicle).

With that said, if your employer is reimbursing you, they may have specific requirements that you will need to follow.

IRS Mileage Tracking Requirements

There are no specific requirements on how you track your mileage. The important thing is that you need to record the mileage of each trip.

For maximum accuracy, odometer readings should be taken at the beginning and end of your trips.

Related: 6 Common IRS Tax Penalties For Small Businesses

Many people choose to use pen-and-paper mileage logs, but these can often be inaccurate and time-consuming. Alternatively, you can use an accurate GPS-based mileage tracker app like TripLog.

Should You Log Personal Trips?

If you use the same vehicle for both business and personal purposes, it’s necessary that you differentiate their miles. It’s best if you present the difference as a percentage, split between personal and business miles.

The best way to manage your trips is with a mileage tracker app like TripLog. With just one simple swipe, you can easily categorize your trips as business or personal.

In addition, TripLog lets you set custom rules making the process even easier. For example, you can set the app to automatically categorize your first and last trips of the day (i.e., your commute) to personal.

record keeping irs tax mileage

How Long Records Should I Keep My Mileage Records?

In the event of an audit or something else that requires the IRS to see your records, you should have a few years’ worth of records saved. The IRS says this about keeping mileage & expense records:

“Generally, this means you must keep records that support your deduction (or an item of income) for 3 years from the date you file the income tax return on which the deduction is claimed. A return filed early is considered filed on the due date.”

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

Along with this, there may be some different rules if your employer is one of your relatives.

Should I Keep Copies Of My Records As An Employee?

For one reason or another, there’s always a chance that your employer may ask you to prove your expenses. Thus, keeping detailed and adequate records is something all mobile workers should do.

Simply put, there’s no easier method to keep an accurate record of your mileage and expenses than a modern app like TripLog. Our app keeps all of your records in one convenient place and provides you and your employer with numerous reporting capabilities.

What To Do If You Get Audited

In the event of an audit, the IRS can request mileage logs from you. You should present them in one of the formats we discussed earlier in this post.

With that said, the easiest and most accurate way to track your mileage and expenses is through an automatic company mileage tracker like TripLog. TripLog follows all IRS mileage log requirements and makes mileage tracking a breeze.

Download TripLog on iOS or Android, or schedule a complimentary web demo today!

Mileage Guide for Employers

mileage guide for employers

Employers with staff who use their personal vehicles to conduct business will likely reimburse their employees for travel expenses. There is no federal requirement requiring them to reimburse, but most companies usually do.

In addition, while there is no federal requirement, individual states may have reimbursement requirements that employers and business owners must follow.

It can be very beneficial for employers to have a mileage reimbursement plan in place, as these business-related expenses are tax-deductible. In addition, having a mileage reimbursement plan in place will make your company that much more attractive to prospective employees.

Employer Mileage Guide: The IRS Standard Mileage Rate

Every year, the IRS issues its standard business mileage rate. This rate is a recommendation based on an annual study of the various costs of owning and operating a motor vehicle.

Related: Manual Expense Reports: The Hidden Costs

In addition, employees should know that any amount they receive up to this amount is tax-exempt. Any reimbursement they receive over this amount is subject to standard income tax.

Employer Mileage Guide: Different Ways For Employers to Reimburse For Mileage Expenses

Functionally, there are two different ways in which your company can handle reimbursements. The first one that they can use is to reimburse for expenses incurred while using your vehicle for business.

The second and generally more accepted method is for employees to properly track and report mileage expenses. Mileage tracker apps like TripLog accurately account for the overall costs associated with owning and operating a motor vehicle.

In the past, companies have used outdated pen-and-paper mileage tracking methods. However, these methods can leave your company subject to over-reimbursement and other types of fraud.

triplog mileage guide for companies with mobile employees

If you choose to use the second method, you will likely use the standard IRS mileage rate. Anything at or below that IRS-recommended mileage rate can be reimbursed to your employees tax-free. Anything over the amount is considered income and is subject to federal and state income tax.

Employer Mileage Guide: Mileage Allowance

Using a mileage allowance system is another option for employees. This is an allowance that is usually paid to the employee in advance, generally paid at the beginning of each month.

This system is designed to cover any transportation expenses that an employee might incur. This can be a challenging reimbursement method as it requires you to manage how much you’re providing with significant scrutiny on your end.

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

Don’t forget! If the allowance total given to the employee is higher than what the IRS standard mileage rate is, the average must be reported as income rather than reimbursement.

Employer Mileage Guide: Mileage Reimbursement

Mileage reimbursement is a fairly straightforward process. With that said, there are a few varieties that are worth discussing. The first one is using the standard mileage rate. The second one is using FAVR (fixed and variable rate).

Employer Mileage Guide: Using the Standard Mileage Rate

The standard mileage rate is one of the easiest ways of tracking and reimbursing employees who use their personal vehicles for work.

Employers should keep in mind that (in most states) they are not required to use the IRS standard mileage rate and that they may use their own rate. If this is the case, any additional reimbursement made to the employee above the IRS rate is subject to income tax.

Thus, it’s important to keep the IRS rate in mind if you choose to use your own mileage reimbursement rate. In addition, if your reimbursement (or lack thereof) causes the employee to fall below minimum wage, you will need to pay them the difference.

Employer Mileage Guide: Fixed and Variable Rate (FAVR)

If you feel like the IRS standard mileage rate is too simplistic or not fair for your particular region, there are other options. For example, you can set up a fixed and variable rate (FAVR) plan.

  • The fixed rate is used to cover standard month-to-month costs such as insurance, lease payments, depreciation, etc.
  • The variable rate covers variable costs such as gas, maintenance, and oil changes.
employer mileage reimbursement plan

Employer Mileage Guide: Employers Should Have An Accountable Plan

To ensure the amount you’re properly reimbursing your team, you must meet the requirements of an accountable plan. The rules of an IRS-compliant accountable plan are as follows:

  • Any expenses must have a business connection – that is, your employee incurred deductible expenses while performing services on behalf of your business.
  • They must adequately account for these expenses to you within a reasonable period of time.
  • They must return any excess reimbursement or allowance within a reasonable period of time.

Each trip that qualifies to be reimbursed must be recorded by the employee and noted for a business purpose in their mileage logs. Also, recording each transaction’s receipt makes reimbursement that much simpler.

Using a powerful mileage and expense tracker like TripLog is a great way to ensure accurate reimbursements. For instance, TripLog’s OCR capabilities give your employees an easy way to track their receipts.

In addition, the IRS indicates that a “reasonable period of time” should be used to track, submit, and manage mileage expenses between an employer and employee. The timeframe suggested by the IRS is 120 days. Specifically, the IRS states on their website:

  • Employees must receive an advance within 30 days of the time they have an expense.
  • They must adequately account for their expenses within 60 days after they were paid or incurred.
  • They return any excess reimbursement within 120 days after the expense was paid or incurred.
  • They are given a periodic statement (at least quarterly) that asks them to either return or adequately account for outstanding advances. They must comply within 120 days of the statement.

Are There Any “Non-Accountable” Plans?

Any reimbursement method that does not meet the three rules provided by the IRS does not meet the requirements of an accountable plan. The IRS provides additional guidelines here to help explain how employers and employees should account for reimbursable expenses.

Employer Mileage Guide: All Employees May Not Be The Same

Since there are differences among employees in most companies, the IRS standard mileage rate requires that each employee qualifies individually. Records must be properly kept in order to meet the requirements of an accountable plan.

Companies should have someone that looks after the total business mileage incurred by their employees. To review the requirements for employees, you may refer to our employee mileage guide for more information.

Your One-Stop Mileage Shop

The easiest and most cost-efficient mileage reimbursement method is to use a company mileage tracker like TripLog. To learn more about how TripLog can help your company, schedule a complimentary demo request today!

Mileage Reimbursement for Employees Explained

best mileage reimbursement platform for mobile employees

If you’re employed by a company and use your personal vehicle for work, your employer will likely be reimbursing you for your mileage and expenses. You may receive mileage reimbursement if you’re driving from the office to meet clients, pick up office supplies, or doing anything else work-related.

Employees may have some questions about whether they qualify for any reimbursements from their employer or not. Click here for information on mileage log requirements.

  • If I drive a company car, will mileage reimbursements be provided?
  • If I use my own vehicle for business purposes, will my employer provide me with reimbursements?
  • What is the best way to track my mileage?
  • Should I do mileage expense reporting each year for tax purposes?
  • What qualifies as company-related mileage expenses?

Related: Are You An Independent Contractor Or An Employee?

Employee Mileage Guide: I Drive a Car Provided by My Employer

If your employer provides you with a vehicle for work-related purposes, you are usually not eligible for mileage reimbursement. You more than likely will not need to track your mileage or expenses (unless the company wants you to for internal data purposes).

You may be reimbursed for certain expenses, like gas, parking, or tolls, but you won’t be reimbursed the same way as if you used your personal vehicle. The IRS standard mileage rate includes the cost of operating a vehicle, which doesn’t fall on you if you’re not using your own car.

The specifics of how your company should reimburse you for expenses incurred while operating a company vehicle should be made clear to your employer.

employee driving company car track expenses

Employee Mileage Guide: I Drive a Car Owned or Leased by Me

If you drive your own car while conducting business for your employer, you are eligible for reimbursement. Typically, your employer will use the standard IRS mileage rate.

However, your company may choose to implement other methods as well. Regardless, you will need to track your mileage to ensure accurate reimbursements.

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For decades, employees have had to use inaccurate and time-consuming pen-and-paper mileage tracking methods. Today, powerful mileage tracker apps like TripLog make the process significantly faster and easier.

accountable plan irs mileage tracker

Employee Mileage Guide: The Importance of Employee Mileage Tracking

Recording each trip used for business purposes that qualify for reimbursement is important. There are various tools available that are affordable and easy to use. One of the best examples of such an expense management tool is TripLog.

Finally, the IRS indicates that companies must offer a “reasonable period of time” to track, submit, and manage mileage expenses between an employer and employee. The IRS states these points on their website:

  • You receive an advance within 30 days of the time you have an expense.
  • You adequately account for your expenses within 60 days after they were paid or incurred.
  • You return any excess reimbursement within 120 days after the expense was paid or incurred.
  • You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances, and you comply within 120 days of the statement.

Related: How Employees Working From Home Deduct Their Mileage

Employee Mileage Guide: What Does Mileage Reimbursement Cover?

Actions such as driving to meet prospects or close sales deals, managing company printing at the print shop, or other company-related activities usually qualify for reimbursement if an employee uses their own personal vehicle.

With that said, some activities, such as commuting to work from home, driving to and from lunch, or picking up a friend in the middle of the workday are not meant to be reimbursed by an employer their employee. Thus, employees must accurately track their drives and be able to easily differentiate business and personal trips.

Does Mileage Reimbursement Cover Gas?

Gas is covered by the IRS mileage rate. If your employer is using the standard IRS mileage rate, you can rest easy knowing that gas is something the IRS does include when calculating its standard mileage rate.

This rate also takes into account things like car depreciation, cost of tires, oil changes, etc.

TripLog: The Best Way For Employees To Track Their Mileage

TripLog’s mileage and expense tracker is one of the easiest and most cost-efficient methods for tracking mileage expenses. With just one swipe, drivers can easily classify their trips as business or personal!

In addition, the app begins tracking your mileage as soon as you start driving. Say goodbye to outdated methods that require you to pull out a pen and paper.

Employers can also set up various reimbursement plans via our intuitive dashboard. Download the #1 company mileage tracker for free today on iOS or Android, or set up a complimentary live web demo.