We want to put a policy in place on car allowance. We would like to know if there are any customary policies that are used in determining either a car allowance or a standard rate as in the IRS x cents/mile. Any suggestions?

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We have an expense report that outlines some guidelines for travel expenses. The amounts to reimburse will generally depend upon your company's policies. It is important to note that if your company chooses to reimburse by mileage at a rate above that of the IRS, the amount over the IRS mileage rate is considered taxable income. Of course, there are no taxable income implications if your company reimbursement rate is equal to or less than the IRS rate.

As for a car allowance approach, you will need to be familiar with IRS guidelines, which can be found in IRS publication 463. TAPN resources that you might find helpful include:

You may also want to post your question in the Forums & Messaging section of the site, where you can get feedback from your peers as to their standard practices with sales travel and expense reimbursement policies.

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