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August 17, 2010
Mileage Expense Requirements and Policies

In a BLR webinar entitled "Mileage/Commuting Expenses: How to Avoid Big Mistakes With These Employee Expenses," Mark E. Tabakman, Esq., partner in the nationwide law firm Fox Rothschild, LLP and Stacy Wade, Ph.D., CPA, assistant professor of accounting at Western Kentucky University, explained that, although the Internal Revenue Service (IRS) does not presently require businesses to keep contemporaneous logs listing the details of every mile of business travel, employers should require employees who use personal cars for business to keep records of whom they went to see, when (time, date, and duration), and for what purpose, as well as the mileage and related expenses that were incurred.

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  • You should also require employees to use a standard expense reporting form when they submit this information to you. Don't let employees wait too long to turn in these forms! Many accountants recommend a firm deadline of no longer than 60 days after the miles were actually driven (or no longer than 30 days, if you advanced the reimbursement to your employee). Remind passengers to turn in receipts for items such as tolls and parking (it's a good rule of thumb to require receipts, no matter how small the amounts are).
  • You should also have a workplace policy that includes those recordkeeping procedures, how reimbursement will be made, and a notice that reimbursements will only be made for company business.

Mark E. Tabakman, Esq., is a partner in the nationwide law firm Fox Rothschild, LLP (www.wagehourlaw.foxrothschild.com). He advises clients throughout the country on all aspects of labor relations and employment law, as well as the development of corporate employment policies. Stacy Wade, Ph.D., CPA, is assistant professor of accounting at Western Kentucky University (www.wku.edu). She teaches undergraduate and graduate courses in financial accounting and taxation.

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