A change in the standard mileage rate for 2010 seems as if it should be pretty straightforward. Except it’s not.
Unless you control the message the right way, telling people that IRS’ mileage rate will fall from 55 cents/mile to 50 cents/mile could mean a big public relations problem for your company. Here’s why:
1. Companies that drop their reimbursements the five cents/mile to keep in line with IRS guidelines may be seen as taking money out of workers’ pockets – at the time they need it the most. Five cents a mile may not seem like much, but for people living paycheck to paycheck, every cent often counts.
2. Employers that generously continue reimbursing people at 2009’s 55 cents/mile will have to warn employees that they’re receiving five cents/mile in taxable income – which means they could end up owing Uncle Sam more in taxes on April 15th the following year.
Whatever your company decides, it’s important you inform employees about the new rate and why your firm is taking that path. For instance, you might include something like this on a paycheck stuffer: “Effective 1/1/10, our mileage rate will drop from 2009’s 55 cents/mile to IRS’ new standard rate of 50 cents/mile, keeping in line with lower transportation costs.”
Other key rates
The IRS standard mileage rates for the use of a car (also vans, pickups or panel trucks) also includes:
• 16.5 cents per mile for medical or moving purposes, and
• 14 cents per mile driven in service of charitable organizations. (This latter rate is set by statute and therefore hasn’t changed in a long time.)
All these rates take effect 1/1/10.
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