gas mileage rate?

Last time I checked (12/07 for 2008) the IRS only allows $0.505 a mile.



Don Phillips

CAD 0.43/km

Here is an exert from our company policy.

"The operator of the vehicle will be reimbursed at the IRS standard mileage rate (40.5¢/mile), plus properly documented parking fees and toll charges. Actual mileage driven must be recorded on the expense sheet for tax purposes. Mileage will be audited by direct point-to-point calculation with typical online direction tools such as mapquest.com or Yahoo Maps.

Use of an employee’s personal vehicle for transport of equipment over 100 pounds to or from the job site will be reimbursed at 60¢ per mile. For miles driven when the vehicle is not carrying equipment, the standard reimbursement amount applies.
Personal car usage on-site (e.g., during outages) is encouraged. A personal car allowance of $35.00 is given.

For tax purposes, the employee must record the actual mileage driven per day on the expense sheet. While XXXXX will pay the $35/day car allowance, tax regulations require XXXXX to report the difference between the actual driven miles times the standard reimbursement rate and the paid $35 as taxable income."

byrdj,
You might point out to your HR department that the $0.405/mile rate is several years out of date. The IRS upped that twice last year and the current rate is $0.505/mile like DonPhillips said above.

David

I agree - $.505 per mile per the IRS

David,

I didn't catch that...Updates to the policy must be in effect since we are at $.505.

I just wanted to show our company has a policy to pay extra for use of private vehicle, but the tax consequencies then fall on the owner.

i've done my research on the irs rate and it's not reasonable for our field of work. what about the fact that the irs rate is an average across cars and trucks? i saw a study (dec 07) by the folks that the irs references and that report indicated that 50 cents/mile would get you a stick, two door, ford ranger...that's not hardly enough room for two people to sit in much less carry all your equipment. i don't expect the company to pay for me to drive a land cruiser or anything extravagant, but i do expect to be reasonably compensated.

as a geotech, if i go to a site, a truck is required. the actual cost for trucks runs higher than cars. either way, i was just curious if anyone else out there has crunched the numbers during these high priced gas times. i did figure it up and i'm losing my butt driving my personal truck. and once i decide to park my truck, my overall profitability will go way down. for example, i parked my truck at the street while doing a recon at a site a few weeks ago and it took me well over an hour and a half longer than it should have...that's time that could've been billed to something...but at least the company didn't have to pay me that extra 15 cents a mile (40 miles rt) that i requested six months ago. hell, if you don't want to pay the higher rate, throw in a free car wash, oil change, etc to at least ease my heartburn. the whole idea of not paying doesn't make sense to me personally and i don't think it makes good business sense. heck, go for better efficiency and profitability while providing a moral boost in the pocket of the employee. adjust rates to compensate if needed.

--i'm a little disgruntled about the issue in case it's not obvious by my tone. at least i have the comfort of knowing that at least two other firms that have contacted me recently will provide a company truck for my use without a reduction in pay should i decide to make the jump. that would equate to several thousand dollar a year in my pocket.

oh well, thanks for the responses.

Be careful on what you get reimbursed. If you are paid more than $0.505 a mile, the extra must be reported by the employer as taxable income. Technically, this is subject to withholding but if your employer does not withhold, you are still liable for the taxes.

Some employers that give you a vehicle allowance will report that on your paycheck and "gross it up" before withholding taxes. Others simple list the benefit and taxes are withheld. This, and other benefits like insurances, are typically part of your total compensation.


Don Phillips