Employees that drive for work have a lot on their plates. There’s the schedule they’re keeping, their destination and their duties there, and the road they’re driving on. Oh, and tracking their business mileage. This last piece may not seem all that big, but mileage logs are important to mobile workers if they want to receive a proper reimbursement. In fact, logs are so important that some companies are offering a structured mileage log template for their road warriors. Why? And what does that mean exactly? Let’s dive in.
A mileage log is a method of record keeping for drivers who plan to either deduct mileage (1099 workers) or collect reimbursements from an employer for miles traveled for business (W2). Mileage logs can take on many forms, from a detailed notebook to a living excel file. Simply put, a good mileage log tracks relevant information for any business miles driven in one’s personal vehicle.
Mileage logs are effective tools for both 1099 and W2 workers alike. At a minimum, they track the dates, start and end locations and purpose of each trip. Each mobile worker is responsible for the quality of their mileage records. However, as an employer, offering a more robust mileage log template can facilitate record keeping and guarantee more fair and accurate reimbursements for each individual driver.
Regardless of the structure of your company’s vehicle reimbursement program, offering a standardized mileage log template to employees enables them to work smarter. Instead of dashing off odometer readings on restaurant napkins, they have a clear outline that also brings ease to the mileage submission process. And that means they’re better positioned to be reimbursed fairly and accurately for their business mileage.
With a cent-per-mile (CPM) program, a mileage log template makes it easier for mobile workers to check all the boxes for submitting accurate, IRS compliant mileage. That also means receiving a total reimbursement. And, as long as the offered cent-per-mile rate falls at or below the IRS Safe Harbor rate, that reimbursement will be tax-free.
For those with an accountable allowance program, a mileage log template can serve as a critical tool in eliminating tax waste. Employers who require detailed mileage logs can remove FICA taxes and ensure that only driver reimbursements above the IRS Standard rate get treated as income when tax season comes around.
In order for a business vehicle program to comply with IRS requirements, employers are required to keep detailed records that justify any business trip reimbursements. An effective mileage log will clearly outline exactly what drivers are expected to document in order to receive their reimbursements tax-free.
Drivers must include the following:
That said, mileage logs are only as effective as the driver makes them. Taking the time to document trips before running into a client meeting or spending an additional hour each night filling in the details around the day’s business isn’t an especially fun task for anyone.
And even the clearest of mileage log templates isn’t immune from drivers rounding mileage, whether intentionally or not. And those small changes in amounts can have large consequences.
Removing the barriers to consistent and accurate record keeping can both optimize your mobile employees’ productivity and shield your company from issues like mileage fraud and incomplete records in the face of an audit. Motus Mobile is an app that automatically tracks key data around business trips for mobile employees. This minimizes the burden of reporting on drivers and provides you with the most accurate data around business miles traveled. Want to learn more? Find out about it here.
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