IRS Publication 463

IRS Publication 463: Travel, Gift, and Car Expenses is a foundational tax document that provides guidance on tax-deductible business expenses and tax-free expense reimbursement. Publication 463 lists eligible business expenses, establishes the criteria for deducting business expenses, explains required recordkeeping, and more. 

While Publication 463 covers many different types of business expenses and how to address them, it importantly covers vehicle expenses and reimbursements. Publication 463 includes useful information such as what is considered to be a deductible vehicle expense, which details need to be recorded for each business trip, and other important compliance regulations. Publication 463 also explains the difference between mileage-based reimbursement and the actual expenses method. 

FAVR, accountable allowance, and cents per mile (CPM) reimbursement programs are all based on the mileage reimbursement guidelines established in Pub 463. 

Read more about how FAVR taxes work, including important rules for employers and employee drivers. Or speaking to a Cardata expert to learn more about how you can apply 463 accountable programs to your employee driver program.