Using my car for company business...

Factual Questions
1

I live in Virginia and work for a small company. We are part of a larger company, but legally the company I work for has only 3 or 4 employees, depending on how you count them. I don’t know if these facts are relevant…

Anyway, lately I have been using my personal car for company business alot. Legally, do they have to pay me for mileage or anything. It has been a gradual increase, and I didn’t mind when it was sporadic, but now it is getting extensive.

Thanks Dopers!

2

They don’t have to pay you for mileage, but if they don’t, you can deduct mileage on your taxes (assuming you itemize).

3

I’ll leave the “do they have to reimburse me” question to someone who actually knows the answer. Your post raises another issue, however: make sure your insurance company knows that you’re using the car for business. If they don’t know about it, and you then have an accident, they could refuse to cover you for it. They’ll probably raise your premium, but unless your company is providing liablity coverage for you while you’re tooling around on their business, you don’t have any good options.

4

Keep in mind that if you do take the tax deduction (if you itemize) your taxable income is adjusted by a small amount – I think in the neighborhood of $0.33 (I don’t travel for work anymore, so I don’t know the current figure). BUT this is subject to the 2% rule, meaning only business expenses (such as your vehicle use) above 2% of your income are deductable.

IANAtaxA.

5

Many companies will refuse to pay mileage expenses unless you can provide proof that you are insuring your car for business use. It’s a policy that protects both them and you in the event of an accident.

6

Many companies will offer reimbursement because they can decuct the cost thereof from their taxes. They can either reimburse you for actual charges (such as if you submit gas recepits, etc.) or they can pay you the IRS determined mileage rate. (I have no idea what it is know, but as Balthisar notes, in the last several years it’s hovered around 30-some cents per mile.) If they pay you by the mile, they will not also reimburse you for gas because the IRS number is meant to include the cost of gas as well as wear and tear on the vehicle. A company is allowed to reimburse you whatever it wants, of course, but it can only deduct direct expenses OR the IRS mileage rate, not both.

I agree that the company is under no obligation to reimburse you, but that doesn’t mean that they won’t if you ask or demand them to.

–Cliffy

7

$0.365 this year.

http://www.irs.gov/formspubs/page/0,,id%3D104153,00.html#T8

(a surprise, since I thought it was only $0.36!)

8

Alternatively, politely inform them that this accommodation you have been making for them can no longer be contributed by you.

You can give them a reason, ie your insurance doesn’t allow it, but frankly the shorter and simpler, the better. Simple to mean no emotional load in the communication–no frustration, no helpful suggestions, no apologizing. Pure professional.

Let them figure out what to do about it, ie pay the expenses, give you a raise, provide a company vehicle, etc. Don’t you start with the suggestions, let them do the thinking and open any negotiations.

…What do they when you are on vacation? What do they do when your car breaks down? What do they do upon an on-the-job accident?