Help with Mileage?

magenta321 · #1 07-02-2008, 07:46 PM

I travel a lot for work. We get paid $.40/mile, which is slightly less than the Feb 2005 Federal mileage pay rate. Myself, and many other people who travel for the company are fighting for the current standard mileage, which is $.585.

I was told by the highest high up that the rate would absolutely not change. I reminded him the price of gas has sky rocketed. I showed him the evidence that we were being paid the 2005 rate. It was no use.

He took out a piece of paper and asked me how many miles it was, round trip from our office to another of our offices. 40 miles. Ok, so 40 miles at 40 cents a mile means you are paid $16 each time you go there.

Next he asked me my gas mileage, and then said that to keep it easy, he'd say I got 20 mi/gallon. He then asked me the price of gas, which I said was $4.50. So... 20 mpg times $4.50 is $9.00.

Next he said that he gives me $16 and I spend $9 on gas, so the rest is at my discretion how I am using it. That $7 could be for wear and tear, insurance, whatever... it doesn't matter as far as he's concerned, he's already over-paying me (and by me, he says he means everyone who drives for him).

So, he said if I can prove to him, somehow, that I am losing money by driving my car for him at 40 cents/mile, then he will reconsider.

My thoughts, which are not as clear cut as his, are that:
1. The federal gvt does not give money away, so if they say $.585 is fair, then it's fair.
2. The federal gvt standard mileage rate is a national amount, which I assume, is based on national averages. I am certain that my geographical region has the 3rd highest gas prices in the nation, and I'm willing to bet we have higher repair costs, and insurance costs. So if the national average says that $.585 is fair, it's probably less so for me.

Any thoughts on how I can influence him to increase the mileage reimbursement?

**mjfrombuffalo**[$] · #2 07-02-2008, 08:02 PM

First off, it's none of his business what mileage your car gets, what your insurance is, what local gas prices are, etc. The IRS comes up with their allowable deduction expense as an average of gas, wear and tear, and costs of owning a car, period. The fact he wants you to justify it to him somehow is insulting to you. His math is also irrelevant.

Second, you can get the IRS allowance by taking it as a deduction instead of getting reimbursed from your employer. Employers have the option to reimburse, they are not compelled to do so. Most do as a benefit and convenience to their employees, and most go with the IRS mileage rate. It's a favor they do for you to keep you from having to wait until you file your taxes to get repaid for what you do for them. If they don't want to give you the full amount, it's not much of a favor to you because now you don't get the full amount the IRS says you're entitled to deduct, and you have to do extra paperwork to get the full amount the IRS says you can deduct.

If they do not reimburse the full allowed amount, you can stop putting in for reimbursement and track your mileage to claim on your taxes as unreimbursed work expenses. You may be able (I am not an accountant but believe this may be true) to do both to make the IRS rate - put in for reimbursement, save your reimbursement receipts, then claim the difference between what you are reimbursed and what the IRS would have allowed for 2008 when you file taxes next January. After all, this is what the IRS says is allowable per mile for the work-related unpaid expenses deduction, so if they don't pay you the current rate, you aren't getting the full deduction and can claim the remainder, I believe.

**pluckyduck** · #3 07-02-2008, 08:07 PM

Our controller won't reimburse the IRS rate either, exact same line of reasoning.

So, yes, I am exactly no help.

(And the reason I posted was....... ?)

**mjfrombuffalo**[$] · #4 07-02-2008, 11:43 PM

That's stupid. The IRS rate has never, as long as I have been working, been only about the cost of gasoline, and it's none of anyone's business what mileage your car gets, and it's not your controller or CFO or Director of Human Resources call to make to decide how much are entitled to count as an expense for the use of your car for work - it is the IRS' decision. If they expect you to use your personal vehicle to do their work and they plan to reimburse you for the use of your vehicle, they should give you the IRS rate or just not reimburse you. Giving you partial is only screwing their employees who then have to do extra work to get the full amount of what the IRS says you are entitled to.

Margaret, you can take the cost of maintaining your car for a year (gas plus tires plus oil changes plus insurance plus plus plus) and divide that by the number of miles you drive in a year to get your cost per mile, but he will argue against that too because "you'd be paying that even if you didn't use your car for work", and besides, it's only reinforcing his (idiotic) line of reasoning. Check with a CPA to see if you can claim the difference between what they're giving and what they're allowing on your tax return.

**jgibson2**[$] · #5 07-03-2008, 01:18 AM

Check with your tax preparer, but my son was reimbursed partially for business miles and our tax preparer told him that if he declared the reimbursement as income, he could deduct the full IRS mileage amount -- his reimbursement was only for gas and tolls, though.

**pluckyduck** · #6 07-03-2008, 11:35 AM

Quote:

mjfrombuffalo said

That's stupid. The IRS rate has never, as long as I have been working, been only about the cost of gasoline, and it's none of anyone's business what mileage your car gets, and it's not your controller or CFO or Director of Human Resources call to make to decide how much are entitled to count as an expense for the use of your car for work - it is the IRS' decision. If they expect you to use your personal vehicle to do their work and they plan to reimburse you for the use of your vehicle, they should give you the IRS rate or just not reimburse you. Giving you partial is only screwing their employees who then have to do extra work to get the full amount of what the IRS says you are entitled to.

Our situation is different from Margaret's. We don't have employees *regularly* driving their own cars in the course of doing business. There are a handful of company vehicles and for regular company business (like sending people out on errands), I'm only allowed to use people who are authorized to drive the company vehicles. Pretty firm edict, no personal cars for company business.

The controversy comes up for press approvals and such (overnight trips to our printer). Company cars aren't available for overnights, and the controller *insists* that reimbursing the IRS rate is in no way standard business practice and what the IRS allows for tax deductions has no bearing on what a company should monetarily reimburse an employee for expenditures.

Dunno. If it came up more than once a month or two, I guess I'd dig further. I don't know if businesses match the IRS rate as practice or not.

**mjfrombuffalo**[$] · #7 07-03-2008, 11:39 AM

Quote:

pluckyduck said

I don't know if businesses match the IRS rate as practice or not.

To my knowledge, for child welfare agencies in New York State, yes, reimbursement is keyed to the IRS rate. Even for cheap employers like my former employer whose name shall not be mentioned.

**pluckyduck** · #8 07-03-2008, 04:13 PM

I can't find anything helpful. I've looked for awhile. (Taking the day off of work, I guess this was my idea of fun?)

The subject bugs me 'cause one of my people was quite displeased that the controller wouldn't match the IRS rate on an expense report a few months ago...and I'm about to have a few more of my people taking car trips for press approvals in the next few weeks. I can't find anything that helps either side of the argument particularly. If I can make a case to the controller for them to be reimbursed higher I will. Last time his math had me going, yeah, looks like you are right there. (What do I know? I don't even drive.)

State and federal entities, universities, large corps tend to sync up with the IRS tax deduction allowances and after that....... well, its the internet, so you can find your fair share of people complaining they get nothing. Freakanomics makes a case for the IRS rate being anti environment.

(it's the internet,people)

About the only thing I did find is that apparently there is an employment law in California that employers have to reimburse for mileage, but no requirement in the other 49 states (*reasonably* sure I'm correct there, notalawyer).

If anybody has math to support occasional, approx 100 mile round trips, a couple times a year, at the IRS rates, I'd love to have it.

For Margaret -- maybe if you look at the percentage of your car use that is work related, that's a place to start with your boss? Work it that way, including depreciation?

**mjfrombuffalo**[$] · #9 07-03-2008, 04:19 PM

But you see, his math and your math DO NOT MATTER. Otherwise you'd have one rate for people who drive Hummers and one rate for people who don't drive on highways and one rate for male drivers under 25... etc. etc. etc. And trying to show the comptroller/CFO/whoever the math is never going to work because there will be arguments against everything the IRS includes in its standards (costs of operation and wear-and-tear). That's what's nice about the IRS rate - it is standard, it is already calculated for you, it is sealed-and-approved as it were. And you are entitled to that amount one way or the other - via either reimbursement or deduction.

Damn, if I worked for your companies I'd say no to the reimbursement and wait for the tax refund instead.

**pluckyduck** · #10 07-03-2008, 04:46 PM

Quote:

mjfrombuffalo said

But you see, his math and your math DO NOT MATTER. Otherwise you'd have one rate for people who drive Hummers and one rate for people who don't drive on highways and one rate for male drivers under 25... etc. etc. etc. And trying to show the comptroller/CFO/whoever the math is never going to work because there will be arguments against everything the IRS includes in its standards (costs of operation and wear-and-tear). That's what's nice about the IRS rate - it is standard, it is already calculated for you, it is sealed-and-approved as it were. And you are entitled to that amount one way or the other - via either reimbursement or deduction.

Damn, if I worked for your companies I'd say no to the reimbursement and wait for the tax refund instead.

(99.9% sure what I read online supports being able to get the reimbursement and then deduct the difference on your tax return, up to the IRS limit.)

Okay, I am going to devil's advocate this. Devil's advocate, devil's advocate, devil's advocate. This is not my actual POV (although it is my controller's)

The devil's advocate position is that if someone is reimbursed at the IRS rate, car travel is incentivized because it becomes a profit center of, depending on your actual vehicle mileage, .10 to .30 per mile of tax free extra income *after* depreciation and whatnot. That the IRS rate for deduction is unnaturally high because one rate for the entire country and every kind of vehicle and driver *can't* be mathematically correct.

The company's goal is to reimburse employees for out of pocket expenses. The controller believes he has a mileage rate that is fair compensation for our employee population and area. If someone can show him they have incurred more expenses, he'll reimburse that, too, but he will only pay for actual expenses and not theory.

He's had this fight a bunch of times and nobody can prove him wrong. Theoretically, he would pay more for a Hummer if someone drove one and could show they spent more than they got back.

Personally, I don't care. There isn't enough employee travel on my budget for me to care if our mileage rate were to change.

I am stuck in the middle on this and much prefer when everybody is happy.

**jgibson2**[$] · #11 07-03-2008, 04:52 PM

My argument for the IRS rate would be that it is standard and easily identified, therefore the amount of employee/controller time NOT wasted in arguing likely pay the difference between the current rate and the IRS rate.

It also provides an incentive to drive a more fuel efficient car if only to collect the difference between average and actual expenses.

**mjfrombuffalo**[$] · #12 07-03-2008, 04:58 PM

I used to think I was profiting too, until I had to buy new tires after driving kids around the outer boroughs of NYC as part of my social work job. If I used my car less for work, yes, I would still have to buy new tires, but it would have probably been a year or more later than I did. One major repair per year was generally equal to what I received in mileage.

As far as incentivizing driving, that's what employee's supervisors are for. "We will reimburse you for Amtrak tickets to Schenectady, not mileage. There are enough trains that run from here to there that it will not cause you undue hardship. If you choose to take your car anyway, we will only reimburse you the amount of an Amtrak ticket no matter what your mileage." I've seen agencies do that.

I guess I don't understand employers who want to reimburse their staff (a benefit) but don't do so at what the IRS would grant. Sort of like, "Hey, the government says we can give you steak, but we're going to be really great and give you hamburgers! Isn't that great? Aren't we awesome? Look how we love you! And hey, you can get the difference between this hamburger and some steak at the end of the year if you want, you just have to hold on to all the buns. We treat our staff AWESOME!" How exactly is that a benefit?

**pluckyduck** · #13 07-03-2008, 05:05 PM

Well, you know, for *me*, we're talking at most a $20 difference on an expense account supervising a $200,000 print run so....hell, I'll go to the bank and get a few twenties to hand out and call it a day. The last argument lasted a better part of a week. Forget math - twenties for everybody!

The real issue is for people who use their car regularly for work, like Margaret, whose thread I have not helped much at all, have I.

**mjfrombuffalo**[$] · #14 07-04-2008, 08:05 AM

From my friend the HR/CFO guru:

Quote:

The only thing I can think of is for the employee to say that if it's good enough for the federal government it should be good enough for ACME Non-Profit; and then simply refuse to volunteer the use of their own car and have the agency rent one. I'm sure that would be less expensive than reimbursing the employee.

He works in nonprofit and knows I do, so he thought the "two friends" I was asking about were also nonprofit. I have to say renting a car is the option I would take if I worked for Andrea's company; I don't know if it's an option for Margaret - does your job specify you must have/use your own vehicle to do the job? If not, since you would need to use it so frequently, perhaps you can push for them to lease a car in the company's name for your use

(The downside is they would probably say the car has to stay on their property, so instead of driving directly to wherever your appointment is from home in the morning, you might have to drive to the company, pick up the company car, go to appointment, etc.)

Meanwhile, the accountant who runs my agency's fiscal department says he is 95% certain that if you are not being reimbursed at the IRS rate, you can claim the [IRS rate] - [paid rate] * miles as a deduction on your taxes. Save copies of all the reimbursement forms you submit as your backup for the tax guy.

magenta321 · #15 07-04-2008, 08:11 AM

I tried for the "let me use a company car" or "get me a piece of crap that you pay to put gas in, keep insured, and registered" but I was told that if I would prefer that INSTEAD of my bonus, it may be possible.

I think the BEST I could do is not submit my mileage, and submit it to the government. But they've got me by the short hairs really... I can't pay my bills as it is, so to put gas in my car, I need their measley payments...

I'm getting very discouraged.

**mjfrombuffalo**[$] · #16 07-04-2008, 08:17 AM

Well, you would only be building a deduction, not a tax credit, so it might make more sense to take what they give you and deduct the rest.

To see which makes sense for you (bonus vs. them giving you a car), you can calculate the total costs of using your car (typical repairs and maintenance, insurance, gas, blah blah blah) for a year, then divide by the miles you drive in a year, then multiply by the miles you drive for work for a year. Or use the IRS mileage rate times the number of miles you drive in a year if you trust the IRS rate. If that's greater than the bonus they want to give you, you might want to take them up on it. If you're driving a company car, ever $50 fill-up is on the company, so that's a lot of $$ not coming out of your pocket, not to mention the wear-and-tear on your personal car. (Your insurance rate could go down too if you're driving your car less.)

Or you could just play chicken with them and keep pushing for a company car to see if they cave on the mileage. Going above the CFO on this may help too

magenta321 · #17 07-04-2008, 08:24 AM

I went to the owner of the company. He's the one who took out the sheet of paper. There is no one higher to go to.

I don't think that getting a company car is ever possible and it would be company car, minus bonus, minus mileage. I can tell you already, I won't be able to pay my bills if that happened. I think my options are to 1. eat shit and like it or 2. find another job.

The only good news is that everyone is hurting. The other person who does the same position as me is complaining too, and a lot of the people who have jobs more like Andrea's employees, where they travel on a once in a while basis, are also complaining.

If everyone complains, I'm hoping it will wear on him eventually.

brian_igo · #18 07-07-2008, 12:56 AM

Find another job. Fuck 'em.

Yes, I'm as serious as I am profane. What MJ said about needing to buy tires two years early because of her driving for her job is dead on. If you get the TCO per mile, 58 cents per mile is still probably not enough to cover what you are actually paying.

This is no different than if your boss forced you to buy the paper you need to do your job and then only offered to reimburse you at 2/3rds of the cost. If he can't run his business any better than that, or sees his employees as a profit center to exploit, then you need to find another place to work.

**jgibson2**[$] · #19 07-07-2008, 01:07 AM

The other alternative, if everyone in your place of business can pull together, is simply to make sure that your vehicles are not available for his use. If you don't ALL do it at the same time, he'll just fire whoever defies him, but if nobody will drive for peanuts, he's stuck.

magenta321 · #20 07-07-2008, 05:34 PM

Brian, some part of you completely agrees with you, believe me.

However, knowing the guy pretty well, I can tell you, he doesn't <i>think</i> he's profitting off of me, he thinks he's giving money away to me. He thinks I am robbing him, unless i show him otherwise. He thinks I'm robbing him at $.40 a mile!!! Grr!

That's why I'd love to find (and I haven't yet) something that says the average american spends x on car payments, y on insurance, and z on maintenance per year. Oh, and q for depriciation. Unless I can show him where the gvt gets $.58, I won't make this guy believe that it costs this much.

If the majority of my job wasn't driving around to doctor's offices, I could probably do what you suggest, Judy. But because that IS my job, I really can't say that. It's not an occasional thing that I use my car, nor is it something that I'm often "asked" to do. I just do it. I can't stop, or I wouldn't be doing my job.