what is a difference between car allowence and getting expenses?

Question

i am a sales person. i used to travel on trains/planes and my expenses were refunded monthly.

in my new job i am gonna receive a car allowance - how is that related to my expenses when visiting clients? should that cover all my customer visits no matter how much i really spend visiting them?

Answer 1

A car allowance is a set dollar amount that is given to you, usually each month. You will get a 1099 for this. Some companies will reimburse you at the end of the year for miles driven in excess of a pre-determined amount, usually over 10,000 miles paid at .10/mile. You may also be required to have your employer named as an Additional Insured on your auto insurance policy.

Expenses are reimbursed periodically by way of you having to turn in receipts You should not receive a 1099 for this type of reimbursement.

If you have to take a plane or stay in a hotel those expenses should either be paid upfront by the company or reimbursed to you.