What is the intent behind the IRS standard for gas mileage reimbursement?

Question

I know that currently the IRS standard for gas mileage reimbursement is .48 cents per mile. Is it mandatory for an employer to reimburse at this amount? What is the IRS intent behind setting the reimbursement amount at this amount? When When I cut reimbursement checks for employees in the firm it seems like a lot of money for driving to and from Office X. The IRS must have intended that the reimbursement cover more than just gas. Does anyone know of specific sources?

Answer 1

The reimbursement covers all vehicle costs including; gas, oil, deprecation, maintance and lease payments.
see put 463 p15 & 16

Answer 2

The IRS amount is intended to cover the total automobile cost - depreciation, gas, repairs, etc. Employers don't have to use that amount, and are not required to reimburse employees at all. Many do, and use the IRS amount to keep it simple.

Answer 3

IRS demands a mileage log. Taxpayers going to Tax courtroom have a relentless 0 checklist with out one. perhaps you will get a harm as a results of hearth. in case you drove a common direction, in line with danger you will possibly be able to desire to reconstruct the mileage employing Yahoo maps. 2001 is a marginally previous 300 and sixty 5 days to be auditing. Are there different issues which will impression issues?

Answer 4

The rate for business use is supposed to cover gas, oil, repairs, tires, insurance, registration fees, licenses, depreciation, etc., basically everything except for parking, tolls, and tickets. (Most companies reimburse the IRS rate PLUS the actual costs for tolls and parking. Most companies do not reimburse for parking tickets or for traffic tickets.)

For comparison, the 2006 rate for moving expenses was $0.18 per mile, and this was intended to cover gas and oil, so they are assuming that the cost of gas alone is even less than that.

Answer 5

If you use a car for your business, for tax purposes you have two basic choices on how you charge that cost to your business.

One is to charge the actual costs for the car, repairs, gasoline etc. This means keeping careful records for all costs associated with owning the car.

The other choice is to keep track of the miles you drive the car for your business and charge 48 cents per mile.

That would indicate that the intend of the IRS is to let the cents per mile charge reflect the total cost of owning and operating the car in your business.