Payday loans

December 14, 2009

IRS Mileage Rate Takes a Dip January 1

Filed under: General HR Buzz12:07 pm

Employers that reimburse employees for business use of a personal automobile should be aware that the IRS mileage rate will drop from 55 cents/mile to 50 cents/mile on January 1, 2010.  The mileage rate for 2010 reflects lower transportation costs compared to a year ago.  The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile.

It’s important to note that if employers continue reimbursing employees at 2009’s 55 cents/mile, they will have to warn employees that they’re receiving five cents/mile in taxable income – this could mean they could end up owing more in taxes on April 15th the following year.

Whatever your company decides, it’s important to inform employees about the new rate and the company policy for mileage reimbursement.

Source: www.IRS.gov

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