It comes just once a year (most times): IRS releases the standard mileage rate. So what will it be for 2012?
Your company will be able to reimburse employees up to 55.5 cents per mile, tax-free, for every business mile they drive in the new year.
Sound familiar? That’s because it’s the same rate the Service released last summer in a rare mid-year adjustment.
IRS made that move in response to rising gas prices that never quite soared as high as many panicked they would. (And most insiders suspected IRS regretted jacking up the rate soon after it happened for that reason.) So the “non-change” for 2012 is most likely a way to right the ship.
The charitable mileage rate will also hold steady at 14 cents per mile.
There is one change your organization will have to account for: when you relocate employees for business reasons. The 2012 mileage rate for medical or moving purposes drops half a cent to 23 cents per mile.
Jump on the momentum to boost T&E compliance
Just because your staffers won’t have to remind employees of a new rate on their expense reports, doesn’t mean there’s no work to be done on the T&E front.
In fact, a steady mileage rate offers you the perfect opportunity to increase your compliance.
No new mileage rate means there should be fewer expense reports for your staffers to bounce back for mistakes. And you can use that momentum to boost compliance in other areas. A couple of ways to do that:
- Take the opportunity to focus on other areas. With one common mistake off A/P’s plate, your staffers can direct their attention to other recurrent compliance issues. Have staffers spend a week or two tracking the most common problems they find when processing employee expense reports. Then you can work together to brainstorm ways to correct these issues. (You might even think about enlisting a “focus group” of your most frequent travelers to help.)
- Offer a gesture of Finance goodwill. Employees will likely already be pleased to hear they’ll get just as much to travel for business than they did this year. Why not continue the positive tone? The Web is awash in tips for business travelers. Thing about looking for some of the more clever ones and passing them along to employees as a small gesture of goodwill and appreciation for their T&E compliance. You may be surprised how much more cooperative folks become when you show them Finance is trying to make their lives easier.