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On December 3, 2009, the IRS announced its 2010 standard deduction mileage rates (online at http://www.irs.gov/newsroom/article/0,,id=216048,00.html). As of January 1, 2010, the IRS is decreasing the IRS standard employee mileage deduction for business use of a motor vehicle to 50 cents per mile. (In 2009 the IRS mileage standard deduction was 55 cents per mile.) Employers that use the IRS rate or lower may deduct that amount as a business expense. However, employees who receive higher reimbursement may be required to pay taxes on the difference between their employer’s reimbursement rate and the IRS mileage deduction as “wages.” Employers should notify their employees if they intend to change the reimbursement rate.
If you have any questions on this or any other employment laws, please contact me or any of our other employment law attorneys. Best wishes, Bob Edwards
If you are an employer facing possible litigation, or have an employee issue on which you need immediate guidance, call us to set up a consultation, or submit your message.
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