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Old 12-28-2011, 08:16 AM
WhyNot WhyNot is offline
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If an employer pays less than the federal rate for mileage...

...and I claim the difference on my taxes, is my employer penalized and/or notified of this?

Longer version:

Boss is paying 17.5 cents/mile*, well below the federal rate of 55.5 cents/mile. This covers my gas (at an average of $3.50 a gallon, 20 mpg) but nothing else - wear and tear, depreciation, insurance, tolls, etc. From what I understand, I can claim mileage on my taxes, deduct the amount Boss has given me (he writes separate checks with "gas" in the memo, so they're easy to account for and not affected by payroll taxes) and Bob's your Uncle. Only...I don't want Boss to get a bill or letter from the IRS for not paying me the federal rate. (Or, rather, I want to know if this would happen and bring it to his attention, and so let him decide whether he'd rather pay me the full rate or what.)

*He claims that this is in addition to mileage reimbursement "figured in" to the per-visit pay, but I don't think it would stand up to scrutiny if I pushed the issue. There are at least two employees who don't drive, who he provides rides for, who make the same per-visit pay I do. If mileage was "figured in" and itemized the way it should be, then shouldn't they be making a bit less per-visit?

This is for home health care, by the way. As I read the tax code, I can't claim mileage for trips into the office, but I can for travel to clients' homes.


(Placed in IMHO instead of GQ 'cause I figure if medical and legal questions go here, so should tax questions. I know you are not my tax preparer, and I promise not to hold anyone responsible, but I'm pretty sure there's a factual answer to this!)

Last edited by Ellen Cherry; 12-28-2011 at 08:35 AM..
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  #2  
Old 12-28-2011, 08:42 AM
WhyNot WhyNot is offline
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Thanks for the typo fix in the title, Ellen Cherry!
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Old 12-28-2011, 09:23 AM
Kasper1014 Kasper1014 is offline
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From what I understand, you can. I have several coworkers who do claim the mileage on their taxes. They document everything carefully.

I don't worry about it as I'm sure I'll screw up somewhere and will get audited. Lol
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Old 12-28-2011, 09:42 AM
doreen doreen is online now
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Your employer won't get in trouble for paying you less than the Federal rate. He doesn't have to reimburse you for mileage at all. The employers' only issue is whether the reimbursement is part of an accountable plan- if you have to verify the date ,time ,place and business purpose of the expense , and you are required to return excess reimbursements or advances , it's an accountable plan and the reimbursement is non-taxable. If you receive a sum of money and don't have to account for the expenses or return any excess (say if your employer gives you $100 a week for gas, whether you drove 10 miles or 300) it's not only taxable, but it's treated as salary/wages and income tax, SS tax ,etc must be withheld
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Old 12-28-2011, 09:50 AM
Northern Piper Northern Piper is online now
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I'm curious - what is the "federal rate" for mileage? Where doesn't come from? It's not a mandatory rate, I gather?
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Old 12-28-2011, 10:14 AM
doreen doreen is online now
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Quote:
Originally Posted by Northern Piper View Post
I'm curious - what is the "federal rate" for mileage? Where doesn't come from? It's not a mandatory rate, I gather?
It's the rate the IRS allows a person to deduct per mile as a business expense and is also the rate at which Federal employees are reimbursed for mileage. Many non-Federal employers , from state governments to private businesses use that rate because there are no tax consequences to the employee if they receive that amount as part of an accountable reimbursement plan. My employer reimburses at the Federal rate- when the Feds change their rate , my employer changes our rate. When I claim my expenses I must detail my starting /ending dates and times , the mileage and tolls for each leg of the trip. ( If the total mileage for the day is below a certain number, i can give less detail). Since I must account for my expenses and I am reimbursed at the Federal rate, nothing goes on my tax return. I don't report the money as income, and I don't deduct the expenses.

WhyNot is reimbursed at less than the Federal rate. If her plan is accountable ( as it seems to be) she doesn't report the reimbursement as income and can deduct the difference between the Federal rate and her reimbursement as a business expense, subject to whatever limitations there are on business expenses (I think they only the amount of 2% over the adjusted gross income is deductible, but I could be wrong)


My husband is "reimbursed" under a non-accountable plan - he receives a set sum (say $200) every week regardless of whatever expenses he may or may not have had that week. He even receives it when he is on vacation , although he would not receive if he transferred from outside to inside sales. That is supposed to be reported by his employer as wages/salary , appear on the tax return as wages/salary and he can then deduct mileage at the Federal rate along with any other business expenses on the tax return.

Last edited by doreen; 12-28-2011 at 10:16 AM..
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  #7  
Old 12-28-2011, 10:15 AM
MsRobyn MsRobyn is offline
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Quote:
Originally Posted by Northern Piper View Post
I'm curious - what is the "federal rate" for mileage? Where doesn't come from? It's not a mandatory rate, I gather?
The Internal Revenue Service sets a baseline for mileage that is 51 cents per mile for a vehicle used for business. This figure takes into account gas, tolls, depreciation, insurance, and so forth that are part and parcel of owning and driving a car. This mileage allowance is also taking into consideration that if you drive your car for business, it's going to have faster-than-usual wear and tear. That being said, employers are not required to pay you the full 51 cents per mile. The good news is that there's more than one way to skin this particular cat. (The links go to some IRS publications about mileage allowances.)

My advice is to find a tax professional who is used to dealing with this sort of situation, at least to show you what records you need to keep and how to keep them. This person should also be able to explain deductions and what deductions might trigger an audit, and that sort of thing. (Several teacher friends recommended that to me, and I'm passing it along.)
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Old 12-28-2011, 10:17 AM
doreen doreen is online now
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Quote:
Originally Posted by MsRobyn View Post
The Internal Revenue Service sets a baseline for mileage that is 51 cents per mile for a vehicle used for business.

It changed to [URL="http://www.irs.gov/newsroom/article/0,,id=240903,00.htm"]http://www.irs.gov/newsroom/article/0,,id=240903,00.htm]55.5[/URL for miles driven between 7/1 and 12/31/11

Last edited by doreen; 12-28-2011 at 10:22 AM..
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  #9  
Old 12-28-2011, 10:24 AM
MsRobyn MsRobyn is offline
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Quote:
Originally Posted by doreen View Post
It changed to [URL="http://www.irs.gov/newsroom/article/0,,id=240903,00.htm"]http://www.irs.gov/newsroom/article/0,,id=240903,00.htm]55.5[/URL for miles driven between 7/1 and 12/31/11
OK. I was going by the first IRS link I found.
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  #10  
Old 12-28-2011, 10:34 AM
WhyNot WhyNot is offline
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Yep, I'm carefully logging all my trips, and making back-ups of my Garmin's mileage logs, as well, just to have everything documented and documented again! (I remember helping my stepmom with her travel logs back when she was a Realtor, so this isn't entirely foreign.)

OK, so if he won't get into hot water, I'll let him pay me the 17.5 cents/mile, and I'll work the rest out with the IRS.

Thanks!
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  #11  
Old 12-28-2011, 10:37 AM
Really Not All That Bright Really Not All That Bright is offline
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If your car only gets 20 miles per gallon and you're driving a significant distance for work, you might want to think about buying a more efficient vehicle.
Quote:
Originally Posted by Northern Piper View Post
I'm curious - what is the "federal rate" for mileage? Where doesn't come from? It's not a mandatory rate, I gather?
It's mandatory in the sense that individuals can't deduct more than it from their taxable income*. It's not mandatory in the sense that employers don't have to pay you that much (or anything) for travel expenses.

On the other hand, it's also mandatory in the sense that it's the de facto standard for mileage reimbursement for all sorts of other purposes. Most states have adopted laws requiring casualty insurers to reimburse claimants for travel to and from medical appointments at the federal mileage rate, for example.
Quote:
Originally Posted by doreen
It changed to [url="http://www.irs.gov/newsroom/article/0,,id=240903,00.htm"]http://www.irs.gov/newsroom/article/0,,id=240903,00.htm]55.5[/URL for miles driven between 7/1 and 12/31/11
...and will stay at 55.5 cents per mile until July 2012.

Last edited by Really Not All That Bright; 12-28-2011 at 10:38 AM..
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  #12  
Old 12-28-2011, 10:49 AM
WhyNot WhyNot is offline
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Quote:
Originally Posted by Really Not All That Bright View Post
If your car only gets 20 miles per gallon and you're driving a significant distance for work, you might want to think about buying a more efficient vehicle.
No, he pays that because it's his average gas mileage, I think! I'm actually coming out a little bit ahead, as I drive a little Saturn sedan with pretty awesome gas mileage.

But that's the nice thing about using the Federal mileage rate, or an employer's rate per mile*: you don't have to keep track of your actual expenses. Sure, my Saturn isn't using as much as his SUV in gas...OTOH, being 15 years old, the Saturn's going to need more repairs. It all comes out in the wash, at least enough to keep the IRS happy.



*which can be less than, but not more than, the Federal rate - more than and the difference between what you've been paid and the Federal rate is taxable income
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  #13  
Old 12-28-2011, 10:55 AM
Ellen Cherry Ellen Cherry is offline
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Quote:
Originally Posted by WhyNot View Post
Thanks for the typo fix in the title, Ellen Cherry!
I live to serve. [/SIRI]
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  #14  
Old 09-13-2012, 08:23 PM
TreatRight TreatRight is offline
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I'm working a temp to perm position at one of the large, well-known fitting and fixture manufacturers. They have another location a little over 1 mi. away from where the HQ is. They mentioned during a meeting that I and another temp to perm employee would be required to make periodic visits to this other location. In addition, we would be visiting various local home improvement stores every 2 weeks or so to review POP displays.

Though visits to the other building may not be frequent and we have not made but 1 trip to a local home improvement store, I asked how they handle travel expense reimbursement. The idiot who had just been appointed as my boss (since the last one had just quit) said that she could buy me a donut and the doof who'd just been hired above her said that they don't have any such plan. Obviously, that's a straight lie, as anyone knows that executives, who are often already well-paid, who work at companies aren't footing their travel bills themselves. I'm not at all one of those well-paid executives, so I should be requesting travel expense reimbursement for sure.

With Corporate America crumbling on the moral front, is this legal for them to do? Should I be claiming mileage on my taxes, as long as it's documented correctly or should I just realize that I work for a deadbeat dud?
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  #15  
Old 09-13-2012, 08:36 PM
Really Not All That Bright Really Not All That Bright is offline
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Are you using your own vehicle? Sure. It's an unreimbursed employee expense.
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Old 09-13-2012, 08:43 PM
Suse Suse is offline
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IIRC, you can only claim mileage if you are itemizing.
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Old 09-13-2012, 08:48 PM
doreen doreen is online now
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Quote:
Originally Posted by TreatRight View Post
With Corporate America crumbling on the moral front, is this legal for them to do? Should I be claiming mileage on my taxes, as long as it's documented correctly or should I just realize that I work for a deadbeat dud?
Well, you can except that first of all you have to itemize deduction to even deduct unreimbursed business expenses and second, you can only deduct those expenses above 2% of your adjusted gross income. If you're only driving a few miles a week, it won't be enough to get over the 2% threshold.
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Old 09-13-2012, 08:57 PM
Really Not All That Bright Really Not All That Bright is offline
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Originally Posted by Suse View Post
IIRC, you can only claim mileage if you are itemizing.
Well, yeah. I figured that was kind of taken as read. You can only claim mortgage interest if you itemize too.
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  #19  
Old 09-13-2012, 09:01 PM
doreen doreen is online now
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Originally Posted by Really Not All That Bright View Post
Well, yeah. I figured that was kind of taken as read. You can only claim mortgage interest if you itemize too.
You'd be surprised how many people beleive you can deduct business expenses even if you take the standard deduction.
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  #20  
Old 09-13-2012, 10:04 PM
TreatRight TreatRight is offline
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So, although not a great expense, it is basically a loophole for your employer to get you to cover some of their expenses. Correct? I guess that's why when they wanted me to use my old iPhone for their use, I told them, "No, I don't carry that with me." I saw this same type of thing happen at the best known computer manufacturer in the world. I mean, it's not like they're really paying anything in the first place. So I chose to be even more miserly than they.
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  #21  
Old 05-15-2014, 08:02 PM
Copyman Copyman is offline
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Can I ask a question concerning personal vehicles used for business. I work for a company as a copier repair guy and travel all over. Just need some help locating info for my particular situation
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  #22  
Old 05-15-2014, 08:29 PM
Omar Little Omar Little is offline
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If you use you personal vehicle for business purposes and are not reimbursed by your employer, you are entitled to take an itemized deduction on your tax return. Travel expenses are subject to an amount that exceeds 2% of your adjusted gross income. If you don't itemize you are SOL.

http://www.irs.gov/publications/p529..._publink100027 Part #:999E1-32000 003
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