It just may be the most waited-for announcement in A/P departments everywhere: the IRS standard mileage rate. And it’s here!
Who would ever think one little penny would create such a stir?
When that one-cent adjustment changes how much your company can reimburse employees for every time they hit the road on company business, it does.
IRS has just released the new standard mileage rate for the coming year. Despite the fact that many insiders felt the Service would hold the rate steady, due to the economic situation, that’s not what happened.
Which means that companies will be updating their policies, prepping their expense reports and filling employees in on what’s changing, effective Jan. 1.
A of Jan. 1, 2011, you can reimburse employees – tax-free – for up to:
- 51 cents per mile for business miles driven (up a penny over 2010’s rate), and
- 19 cents per mile driven for medical or moving purposes (a 2.5-cent jump).
(Note: The mileage rate when driving in service of charitable organizations holds steady again at 14 cents a mile. That’s the same rate as in 2010 and 2009.)
So you have a couple of weeks before the new rates kick in. That gives you a little time to error-proof those first expense reports of the year as much as possible. The last thing your company wants to do is kick back employee forms because folks calculated them with 2010’s rate!
A few ideas to keep mix-ups to a minimum:
- Blitz employees on the new rate: e-mail updates, a posting on your intranet – even a tweet publicizing the new mileage rate will get that in people’s consciousness.
- Include the mileage rate right on your expense report form (or online T&E system if you are that automated). It will require a yearly update, but by including the current mileage rate right on the form itself, it’ll be a lot less likely folks will forget it.
- Give employees one last chance. If people hand their expense reports in person, consider a sign on A/P’s in-bin or office door asking “Did you remember the new mileage rate?” That will give people a final opportunity to correct that number before Finance starts processing.
Do you have any tips or tricks to update employees when the mileage rate changes? Share it here.