Fixed and variable rate plans recognize the dual expense nature of owning and operating a vehicle. Fixed expenses are depreciation, finance, license, title and insurance. Variable expenses are fuel, maintenance and tires. Fixed expenses are reimbursed as dollars per month and variable expenses are reimbursed as cents-per-mile. The IRS has two revenue procedures governing fixed and variable reimbursements – the Accountable Plan and the FAVR Plan.

The dual nature of reimbursement provides a fair, accurate and transparent method for reimbursing drivers.

The Accountable Plan is flexible requiring only that the sum of the reimbursement not exceed what the reimbursement would have been using the IRS Standard Mileage Rate. The IRS FAVR plan is a complicated system carefully designed to avoid any possibility for an erroneous non-taxable reimbursement.  Both plans require business mileage be recorded.

The CarDATA  Online application tracks and measures IRS compliance through exception reporting. CarDATA Online coordinates driver mileages, odometer readings and manager mileage approval.

To learn more about how CarDATA can assist with your Fixed and Variable program, please visit the following...