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How To Use The Commute Deduction Option To Comply With IRS Guidelines?
How To Use The Commute Deduction Option To Comply With IRS Guidelines?

Simplify IRS compliance, eliminate manual errors, and ensure precise deductions effortlessly with Fyle's Commute Deduction feature,

Kamalini Yuvaraj avatar
Written by Kamalini Yuvaraj
Updated over a week ago

Companies frequently compensate employees for utilizing their personal vehicles for business-related journeys, covering mileage expenses. However, IRS regulations mandate that employers exclude the daily commuting distance between an employee's home and workplace from these reimbursements.

Manually calculating mileage by subtracting the commute distance can lead to errors and consume considerable time for both employees and administrators. To simplify this process and guarantee precise deductions, you can use Fyle's Commute Deduction feature within its Mileage module.

โ€‹Note: This feature is exclusively available to our beta customers via the web app. If you're interested in joining the beta program, please reach out to us at [email protected]

Here's how you can effortlessly implement this solution:

Step 1: Enable Commute Deduction Feature

Navigate to Admin Settings -> Expenses -> Mileage. Turn the toggle on to Enable Commute Deduction in the mileage expense form

Step 2: Make it a Mandatory Field (Optional)

If you want to ensure that all employees utilize the Commute Deduction feature, you can make it a mandatory field. Simply scroll down to access the Mileage Expense Fields Options to set this preference.

Step 3: Employee Commute Details (to be filled by employees)

Once the feature is enabled, employees can add their Home and Work locations in their Profile section by clicking on Add Location.

The employee will be able to see a pop-up where the Home and Work addresses can be Saved.

The system will seamlessly calculate one-way and two-way distances, allowing immediate deduction from their mileage miles.

Step 4: Applying Commute Deduction in Mileage form

While creating a mileage expense, the user will be able to see a list of options from the Commute Deduction option, which can be used based on the requirement.

The Distance will be automatically calculated based on the selected option. Below are a few examples for different kinds of deductions.

Step 5: Admin Visibility for Approval

As an admin, you have full visibility into employee activities. You can easily track whether an employee has applied a commute deduction or not. Additionally, detailed information, including the actual distance and claimed distance, is available for each expense.

This straightforward approach not only reduces manual labor and potential errors but also aligns with IRS compliance requirements. Say goodbye to complex calculations and welcome easy expense management with our intuitive interface. Protect your business from over-reimbursement and enjoy a smoother financial operation. Try it today for a hassle-free experience!

If you require assistance setting this up, please don't hesitate to contact us at [email protected].

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