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Torben Robertson

4 mins

Why Mileage Reimbursements need Mileage Tracking Apps

Vehicle reimbursement programs reduce company tax-burdens, but the IRS needs detailed records. Mileage apps provide that data easily.


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What is a mileage tracking app?

Mobile mileage tracking applications are intelligent ways to replace manual mileage logging. Mileage logging is necessary to remain compliant with IRS guidelines for vehicle reimbursement programs, but it take a lot of time and can be wildly inaccurate. Mileage apps reduce both inaccuracies and the time it takes log mileage, all while keeping companies and drivers IRS-compliant.

A mileage app is a mobile application that replaces manual mileage logs. It is a tool for companies with reimbursement programs; that is, with drivers who use their personal vehicle for work and who need to be reimbursed for business driving.

A mileage app stores all the data companies need for approving and distributing those reimbursements.

That same data is everything businesses need to keep their reimbursement programs IRS-compliant.

The IRS allows companies to reimburse tax-free with programs like Cents per Mile (“CPM”), Fixed and Variable Rate (“FAVR”), and Tax-Free Car Allowance. However, you need to keep detailed mileage logs to maintain tax free status. A mileage app removes all the hassle of doing so manually.

How do I get a mileage app?

It is very difficult and expensive for companies to design and build their own mobile applications. The best option is to get an app like Cardata Mobile. We have built ours with careful attention to IRS requirements for reimbursement programs and constant customer feedback.

Cardata Mobile comes with every Cardata reimbursement program.

Company & employee tax implications

When a mileage app is properly used, in conjunction with a FAVR, CPM, or Tax-Free Car Allowance program, employees no longer pay income tax on business related vehicle expenses. Their reimbursement is considered a justified business expense by the IRS, and their tax burden is waived.

Without the mileage app, these programs would need to be validated with time-consuming manual mileage logging.

Companies win as well when they justify their reimbursement program with a mileage app. They no longer pay payroll or FICA tax on business related vehicle expenses.

How does it help make vehicle programs more efficient?

As mentioned, a mobile mileage capture app is a crucial piece of a tax-free reimbursement program. But other savings are realized as well.

A mileage app, for example, lets employers accurately reimburse only for miles driven. It eliminates driver error in odometer readings, which are commonplace with manual mileage logging.

Do company drivers like it?

Absolutely. A mileage app like Cardata Mobile:

  1. Ensures that drivers get reimbursed properly for all the business driving that they do
  2. Allows them access to data which helps them make decisions about their own driving habits
  3. Provides them with mileage information necessary to manage their vehicle expenses intelligently
  4. Provides them with an easy way to account to the IRS for all driving, in case of personal audit

Drivers save time and get properly reimbursed when they use a mileage app

How much time do they save?

By eliminating the need for manual mileage logs, drivers save many hours a year. Cardata calculates that it can take up to four minutes per trip to record all the IRS-required data in a log book.

For drivers who do several trips per day, and drive most days of the year, a mileage app is indispensable. In large driver populations, the time savings can add up to literally thousands of hours per year.

Read more about how drivers win with reimbursement programs.

Administrators save time too

Cardata Mobile continuously aggregates mobile miles, and serves the data to program admins via Cardata Cloud.

This means that administrators have no need to read logbooks and calculate reimbursements. It is all done ahead of time.

There is also no need to request submissions of mileage data, or chase up missing miles. A mileage app does the heavy lifting, so administrators can focus on what matters most to them.

Praise for Cardata Mobile

Cardata Mobile is consistently given 5 stars on G2 by its users! Here is what one user said about our app:

“The new app has made life so much easier. Just having the app to [do] the tracking  (eliminating the need to be watching the odometer constantly) is an absolute pleasure.”

Moreover, our software suite—which includes Cardata Mobile and Cardata Cloud—has just won a Best Software of 2022 Award! We could not be more proud.

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