Q: Hi Larry, I have a question about how to reimburse an employee for mileage. I just read what the deduction is but I need to know what the rate is for a business to pay back an employee for auto expenses they incur running errands for the business. I am assuming it is an amount per mile and I have asked them to keep a log.
A: You are correct that they should
turn in a log (diary) of their miles. By
your question I am assuming that these are routine trips around town such as to
the bank etc. If this is true instead of
a daily log the employee can determine the routine miles for the trip and then
if they can somehow document the number of trips you can just multiply to
determine total business miles. Having
said that in my opinion the IRS likes a detailed log but the other method
works.
The mileage rate is 55.5 cents for
2012 and 56.5 cents for 2013. The amount
given to the employee is not added to the W-2 and you do not have to give the
employee a 1099. It is deductible to you
and not income to the employee.
