Free IRS Mileage Reimbursement Form + Guide

For any commerce owner, running errands is unavoidable. However, at times you might be too busy to make the run personally. This will lead to you sending your employee to handle a specific task or collect something. If you ever find yourself in a situation where you are counting on your employee to use his or her car for the business, consider offering a mileage reimbursement. To have an easy time offering the mileage reimbursement, you need to understand how it works.

What is a Mileage Reimbursement?

Mileage reimbursement refers to the approach used in compensating your workers for using their automobiles in running your business errands. It can be used in paying employees for things like:

  • Driving to a bank for a business transaction
  • Driving to meet different clients
  • Driving to pick-up your office supplies

However, it’s important to note that the federal mileage reimbursement rates usually change every year, with the current 2020 standard mileage rate being 57.5center per mile.

Many businesses usually use the standard mileage reimbursement rate. But this may also vary depending on the industry. A good example being the standard rate for medical purposes is 17 cents per mile in 2020, while charity-related activities have a 14 cents mileage reimbursement per mile.


Editable IRS Mileage Reimbursement Word Form

    What Does Mileage Reimbursement Form Covers?

    Mileage rates calculations are based on the general and fixed costs of operating an automobile. It therefore includes:

    • Oil
    • Gas
    • Depreciation
    • Registration fee
    • Maintenance due to wear

    The reimbursement does not cover

    • Lodging Food 
    • Tolls 
    • Parking fees 
    • Minor repairs and accidents 

    Remember, the mileage reimbursement is only offered if the employee uses his or her vehicle for your business activities.

    How Does Mileage Reimbursements Function?

    To receive the reimbursement, your worker must keep proper track of the business mileage. This can be done using different digital forms or writing the miles on a book. However, many businesses usually provide a mileage reimbursement form where you are supposed to fill in the mileage after every complete business-related activity.

    In the form, you also need to fill in the information regarding the drive, including the date, destination business purpose, miles traveled, total miles, and origin. Some companies will need you to return the form daily, while others will collect the form after every month.

    Latest (2022) IRS Mileage Rates: (Source)

    • Business: $0.585 (58.5 cents)
    • Medical or Moving: $0.18
    • Charitable Organization: $0.14

    Mileage Reimbursement Laws

    Before you even offer mileage reimbursement, it is essential to familiarize yourself with the requirements that you must abide by as follows:

    • A firm that pays mileage reimbursement has to comply with the IRS documentation rules. This means the employees have to maintain a good record of all business travel and submit them regularly.
    • To be counted as a business expense, the reimbursement can only be paid if the car was used for a business purpose.

    While the federal law will not require any business owner to offer a mileage reimbursement to workers, you still have to abide by the minimum wage requirements if you will not provide mileage reimbursement to your employees. This means that your employees will be getting the minimum wage after mileage deduction expenses.

    How to Reimburse for the Mileage

    The payment can be made in different ways, depending on what suits you and your employees best. However, it would be best if you determined a few things before settling the reimbursement, including:

    • Will you be paying the mileage reimbursement with direct deposits or paper checks?
    • Are you planning to include the mileage reimbursements together with regular wages or handle each payment differently?
    • Determining these factors will help you understand what suits your business best. But generally, mileage reimbursements have to be settled two weeks after being submitted.

    Will Mileage Reimbursements be Taxable?

    Employees will not have to pay any taxes on a mileage reimbursement only when they have an accountable plan.

    Should I Reimburse All My Employees the Same Way?

    Not necessarily. Using the IRS rates standards, you will understand that each employee qualifies separately. They must also have adequate records and meets all the rules associated with accountable plans.

    Mileage Reimbursement advantages

    Mileage reimbursements offer benefits to both the employer and the employees.

    Benefits for Employers

    • Increased employee fulfillment
    • Gets a higher chance of receiving business mileage deductions for compensating employees
    • Employees will not have a problem running business-related activities
    • Mileage reimbursements play a significant role in preventing disgruntled employees, improve your employee’s satisfaction and positively impact your employee’s engagement.   

    Benefits for Employee

    • Eliminates the worries that come with mileage costs
    • You get compensated for using your car for business activities

    While many business owners fail to see the importance of a mileage reimbursement form, it plays a vital role in ensuring your settle the claims properly. This makes it possible for your employees to come in using his or her means and carry out the business errands quickly. However, proper reimbursements must be outlined to ensure that the next time they need for such services arises, the employee will be willing to help out without any problem.

    About This Article

    Melissa Horton
    Authored by:
    Legal Writing | M.A Marketing, B.A. Finance
    Melissa Horton is a highly skilled legal writer and co-owner of a leading financial planning firm in Washington, D.C. With over a decade of experience in the financial services and planning industry, Melissa's expertise lies in teaching clients how to maintain sustainable financial health. She holds a JD degree and possesses a deep understanding of legal principles and regulations, enabling her to deliver exceptional legal writing that is both informative and accessible. Melissa's passion for helping individuals navigate complex legal matters shines through in her work, making her a trusted authority in the field of legal writing.

    Was this helpful?

    Great! Tell us more about your experience

    Not Up to Par? Help Us Fix It!

    Keep Reading

    Thank You for Your Feedback!

    Your Voice, Our Progress. Your feedback matters a lot to us.