Company Mileage: Tracking & Requirements
“Do I have to reimburse my employees for their company mileage?”
This is one of the most common questions related to employee expense reimbursement. Employers want to know if they have to reimburse their workers for business-related expenses.
While most companies do have a reimbursement policy in place, as it’s deemed “fair” to reimburse workers that have spent their own money on company mileage, travel & other expenses. The law doesn’t actually require it.
As of 2018, only California & Massachussetts require companies to reimburse employees for business expenses.
We’re not at all advocating that the lack of a law requiring employee reimbursement is “right” or “fair” and that employers should suddenly quit reimbursing employees to take advantage of the savings.
No, we just have to report the facts as they’re written.
As it stands, self-employed individuals can deduct mileage and other business expenses on their taxes, however, W2 workers (employees) who used to be able to deduct unreimbursed business expenses such as company mileage are no longer allowed to deduct these expenses under the new tax rules.
So, let’s clear up some confusion.
1.) Companies do NOT have to reimburse employees for business expenses.
2.) Employees are NOT allowed to deduct unreimbursed business expenses starting in 2018.
This doesn’t sound very promising for employees, does it? The bottom line is that if employees aren’t reimbursed by the company, they are out whatever mileage they’ve incurred or money they spent on expenses!
As we mentioned above, most companies have reimbursement policies in place and employees should see no change. However, the gray area is the companies that haven’t updated their reimbursement policies to reflect the new tax law changes.
Basically, any company that opted not to reimburse employees because their employees could write off the expenses on their taxes is now leaving their employees in a tough position.
Should these companies start reimbursing employees for business-related expenses even though there is no legal requirement to do so? Will employees quit if they can’t get reimbursed?
If you own a company and find yourself in this situation, ask yourself a few questions.
- Do you have the ability to reimburse employees?
- Would reimbursing employees require hiring new people to handle the tracking, records & payments?
- Do you have the proper software to track mileage & expenses?
For question #1, this may come down to cash-flow. If you can’t afford to reimburse company mileage and expenses for employees (not 1099 workers) then you should be prepared for some unhappy workers that as of 2018 can longer deduct these expenses. If the cost to reimburse is just too great, then this is going to be an equally tough decision for you and your employees.
For question #2, this is probably the most important question you could ask yourself. Is creating a new policy, keeping IRS-compliant records and handling reimbursements going to require hiring new staff? If so, this could be cost-prohibitive for smaller businesses.
For question #3, we’ve got the perfect solution for you – Everlance. Not only does Everlance offer one of the best company mileage trackers in the world, we’ve also got an incredibly robust platform for employee management, expense tracking, and receipt/record keeping.
Using Everlance Teams To Track Company Mileage & Expenses
Before we dive into how awesome Everlance Teams is for companies, let’s first talk about how great Everlance Premium is, because with a Teams account you get all of the Premium features + the ability to manage employees.
Everlance Premium Features
Everlance is the #1 rated mileage & expense tracking app in the world. Whether you’re using it as an individual or for your entire company, our features are class-leading and 100% IRS-compliant.
- Unlimited Automatic Mileage Tracking: The most popular feature of all is also the most advanced in the industry. Everlance automatically tracks every drive you make, tallying up the trip in real-time and overlaying your entire route on a map.
- Manual & Automatic Expense Tracking: At any time you can enter past or current expenses manually into the app. If you want to get even more advanced you can sync your bank account &/or credit cards to Everlance and we’ll import all of your expenses automatically.
- Unlimited Receipt Storage: No more messy receipt storage. With Everlance you can throw out that shoebox and take a picture instead! When you store receipts on Everlance, you’re keeping them safely in the cloud forever with no storage limits.
- Dashboard: Log in to the web-based dashboard with your phone or computer and instantly get a snapshot of your activity. Manage your account any way you see fit. Add, edit, update, delete – you have a lot of options, and even better you get to do this…
- Export Reports: When our customers need to pull their data we make it push-button easy, and every report is 100% IRS-compliant. Whether it’s daily, weekly, monthly, quarterly or yearly you can simply export any amount of data you need in Excel (.CSV file) or PDF.
What do you get with Everlance Teams?
Everlance Teams has all of the features of Everlance Premium, with the added benefit of managing every employee or contractor in one easy dashboard.
Here is one thing you can do with Everlance Teams, that you can’t do with Everlance Premium.
Manage Unlimited Users: With an Everlance Teams account you can add, edit & delete as many users as you need. Whether you have 2 or 2,000 employees that need to track company mileage & expenses, you can add, edit or delete them instantly from the account.
Do you need to change your administrator because the previous administrator left the company? It’s as easy as pushing a button!
Do you want to add a new employee that you just hired? It’s simple. Just add their information and have them download the Everlance app!
Everlance Teams gives companies total control over how they track and manage their expense data. We offer the easiest reporting in the industry and every single report is 100% IRS-compliant, so you have peace of mind knowing that you’re tracking and retaining the proper records.
Do you want to give Everlance Teams a try for free? See what Everlance Teams can do for your company!