Start passing out the straws. Whoever draws the short one gets to tell employees how much less you’ll be reimbursing them for every business mile they drive.
Tell A/P to put their helmets on – they’re in for a bumpy ride. IRS just released the standard mileage rate for 2010, and it’s not going to be popular.
Turns out the Service lowered two of the three business mileage rates for 2010.
And not by a penny or two.
Here’s what your company will be able to reimburse employees up to, tax-free, starting January 1:
- standard mileage rate: 50 cents per mile (down a nickel from this year)
- medical and moving rate: 16.5 cents per mile (7.5 cents lower), and
- charitable mileage rate: 14 cents per mile (the lone hold).
At a time when so many people are already strapped financially, telling them they’ll receive even less when they get behind the wheel on company business will not be popular.
So what can you do to soften the blow? Try these three strategies:
- Break the news with empathy. After all, finance staffers will be reimbursed at the same lower rate as everybody else. Urge them to be as understanding as possible when they pass the new rate along.
- Point them in the right direction. Your company can’t raise the mileage rate, but it can help its employees get the most bang for its soon-to-be-lower buck. One way: Help folks find the gas stations with the lowest prices. http://gasbuddy.com/ is a great online resource.
- Offer an alternative. It may not be ideal, but employees can always take the difference between the mileage rate and what you reimburse and deduct it on their personal income taxes. If they really need the extra money, they’ll go through the hassle of keeping track. And many probably don’t realize it’s even an option. So they’ll be grateful to know Finance is looking out for them.