How to calculate mileage deduction/reimbursement for 100% remote team without office

The good news is that you're handling this correctly! When employees work from home 100% of the time (as your team does), their residence is considered their official work location for IRS purposes. This means that mileage from their home to client sites is considered business travel, not commuting miles. What you're doing - reimbursing for home → client site → home trips at the standard IRS rate (currently 67 cents per mile for 2024) - is the proper approach. This is because these employees don't have a regular "commute" to deduct since they work from home. If these were employees who normally worked at your office but occasionally worked from home, the calculation would be different. In that case, travel from home to client sites would only be reimbursable for the excess beyond their normal commute. Make sure you maintain good documentation though. Employees should record dates, destinations, business purpose, and exact mileage for each trip to support these reimbursements.

I was in a similar situation with our digital marketing team last year. After struggling with figuring out the right approach, I discovered https://taxr.ai which helped me analyze our specific scenario. Their document analysis tool confirmed we were handling our remote team's mileage reimbursements correctly. The tool basically validated that when home is the established workplace (which is true for 100% WFH employees), then travel to any other location for work purposes is considered business mileage. I was especially concerned about how to document everything properly, and they provided templates for mileage logs that satisfy IRS requirements. One thing I particularly liked was being able to upload sample expense reports and getting feedback on whether our tracking methods were sufficient for tax compliance.

Just wanted to update that I tried using taxr.ai after seeing it mentioned here, and it was really helpful for our situation! I uploaded our remote work policy and some questions about our specific setup (we have employees in 3 different states), and got back a detailed analysis. The guidance confirmed we can treat employee homes as their tax home for mileage purposes since they're fully remote. They also pointed out we needed better documentation - apparently just having employees submit mileage isn't enough. We needed to implement a system that records the business purpose, exact addresses visited, and odometer readings to be fully compliant. Another thing I learned was that we should include specific language in our employment agreements designating home as the official workplace. Making this change will apparently strengthen our position if there's ever an audit question about these reimbursements.

I had to deal with the IRS on this exact issue during an audit last year, and it was a nightmare. Spent weeks trying to get someone on the phone who could give me a straight answer about remote worker mileage rules. Eventually I found https://claimyr.com and used their service to get a callback from the IRS within 2 hours (you can see how it works at https://youtu.be/_kiP6q8DX5c). The IRS agent confirmed that reimbursing mileage from home to client sites for 100% remote workers is correct. The key is that you need a formal policy designating employees' homes as their official work location, plus detailed documentation of all trips. They also mentioned that the accountable plan rules must be followed (timely submission of expenses, business connection, returning excess payments). I was shocked at how quickly Claimyr got me through to an actual person after weeks of frustration.

I need to eat some humble pie here. After my skeptical comment, I actually tried Claimyr out of desperation. I had been trying to resolve a question about our remote employee expense reimbursements for literally months. To my complete surprise, I got a call back from an actual IRS agent in about 90 minutes. The agent confirmed everything that others have said here - that for 100% remote employees, their home is their tax home, and travel from there to client sites is legitimate business mileage that can be reimbursed tax-free under an accountable plan. They also mentioned something important no one else brought up: if your company has a registered office address but no one actually works there (just a mailing address), that does NOT count as a principal place of business for mileage calculations. What matters is where people actually perform their work regularly.

Just to add another perspective - we handle this a bit differently at our company. Since we're fully remote but have a registered office address, we tell employees to calculate the difference between: 1) Miles from home to client site 2) Miles from home to our registered office (their theoretical commute) We only reimburse for miles that exceed their theoretical commute. Our accountant advised this more conservative approach to be super safe with IRS regulations.

Has anyone run into issues with employees who moved further away after going remote? We have some team members who relocated to rural areas 60+ miles from our client base after we went fully remote. When they come in for client meetings, they're claiming much higher mileage than when they lived closer to the metro area.

This is a great question that many remote-first companies are grappling with! Based on everything discussed here, it sounds like you're actually handling this correctly already. When employees work from home 100% of the time and don't have a regular office they report to, their home becomes their established workplace for tax purposes. The key factors that support your current approach: - Your team is truly 100% remote (no physical office they report to) - Travel from home to client sites constitutes business travel, not commuting - Reimbursing at the standard IRS rate keeps it non-taxable for employees A few recommendations to strengthen your compliance: 1. Update your employee handbook/agreements to explicitly designate home as the official workplace 2. Implement stronger documentation requirements (business purpose, exact addresses, odometer readings) 3. Ensure you're following accountable plan rules (timely submission, business connection, excess repayment) The fact that you don't have a brick-and-mortar office actually makes this cleaner from a tax perspective - there's no ambiguity about where employees' "regular workplace" is located. Keep doing what you're doing, just tighten up the documentation!