New year, new mileage rate. The Service has officially announced what your finance department will be working with in 2020.
This year, the Service is slightly decreasing the amount that your department can reimburse employees on the road. As of Jan. 1, 2020, the rates are:
- 57.5 cents per mile for business miles driven (down from 58 cents)
- 17 cents per mile for medical or moving purposes (down from 20 cents, and only for active-duty military, due to the Tax Cuts and Jobs Act), and
- 14 cents per mile driven in service of charitable organizations (unchanged).
To stay compliant, your finance team will want to start adjusting its practices and sharing the news immediately.
A new reason to stay vigilant
This year, there’s one major factor you must address concerning mileage reimbursement: fraud.
A recent survey by software provider Chrome River assessed the behaviors of employees who’ve committed fraud. And when asked what type of fake expense they’ve added, “additional mileage on driving” was the top answer, cited by 39% of people.
It makes sense: Gas mileage is a common expense, one that your finance team sees regularly and may not give a second thought to. But since falsifying mileage is the No. 1 tactic sneaky employees are using now, your team must scrutinize those expenses closer than ever.
It’d be worthwhile to share this jarring stat with your whole team, so you can all work to keep mileage fraud at bay in 2020.
Of course, employees can’t use ignorance as an excuse for that kind of shifty behavior if you thoroughly communicate the new mileage rate.
That can be hard at this time of year, though. Employees are catching up after the holidays. They’re finishing year-end tasks and starting to organize for 2020. But amid the bustle, your message about the mileage rate must ring clear.
As usual, your finance team should start by crafting a general companywide email. You’ll want to remind them that both the subject line and the email text should be clear and concise. Not too short and vague, not too long-winded.
And to stress the importance of your email, have your team mark it as a “High Importance” item. They could also throw in a brief mention of “IRS regulations” or “federal compliance” so employees remember it’s coming from a high authority.
Going a step further
In addition to that email blast, your finance team should:
1. Update internal resources. Including the mileage rate in company resources (e.g., T&E policy, expense report template, web page) is a great way to deter those “I didn’t know” conversations that your team has to endure with employees. Be sure they update the rates for 2020 at the same time the email goes out for consistency.
2. Decide if more attention is needed anywhere. Seasoned travelers likely understand the mileage rate, no problems or questions. But ask your team to consider: Are there newer employees who will be traveling in 2020 and might need further explanation? Did any employees pose mileage issues last year, and could a separate chat with them be beneficial? Your team will be glad later that they got ahead of potential problems.