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Question Re: Work truck / personal use tax
Posted on 11/6/15 at 10:38 am
Posted on 11/6/15 at 10:38 am
My company provides us with trucks and gas cards. These trucks can be used for business and personal.
Last year we had new upper management come in and put GPS on the trucks, no big deal. Along with these GPS, they said that the IRS requires them to report each vehicles mileage split between business and personal, and we get taxed on the personal miles.
Each week the GPS report comes out with every stop, time and mileage for each. We have to go in and type "location, purpose, business or personal". Huge pain in the arse. It is bad enough that I just let them charge all of my miles as personal and take the hit rather than fool with the headache.
I have never heard of this process being used anywhere. I understand if you are using your personal vehicle for work use and having to report the business/personal split to the IRS.
Before last year, it was free roam and no reporting for the past 50 or so years.
My buddy works for a competitor and they pay a flat fee $100 a month to offset personal use for their company provided vehicles, which is more than fair. No "reporting to the IRS" involved.
Please help, we were just purchased by another company and I am trying to quickly get them to see where I am coming from.
Last year we had new upper management come in and put GPS on the trucks, no big deal. Along with these GPS, they said that the IRS requires them to report each vehicles mileage split between business and personal, and we get taxed on the personal miles.
Each week the GPS report comes out with every stop, time and mileage for each. We have to go in and type "location, purpose, business or personal". Huge pain in the arse. It is bad enough that I just let them charge all of my miles as personal and take the hit rather than fool with the headache.
I have never heard of this process being used anywhere. I understand if you are using your personal vehicle for work use and having to report the business/personal split to the IRS.
Before last year, it was free roam and no reporting for the past 50 or so years.
My buddy works for a competitor and they pay a flat fee $100 a month to offset personal use for their company provided vehicles, which is more than fair. No "reporting to the IRS" involved.
Please help, we were just purchased by another company and I am trying to quickly get them to see where I am coming from.
This post was edited on 11/6/15 at 10:44 am
4
Posted on 11/6/15 at 11:16 am to Polar Pop
Damn man, as soon as they put on that GPS I would have given the truck back. Have you offered to pay them a flat fee for personal miles used like your buddy? That could possibly save you the headache of having to log all the miles. It could be a happy medium for both sides
Posted on 11/6/15 at 11:32 am to Big Floppy TDs
The only reason that I didnt give it up when they put the GPS is that I was under strict understanding with my direct supervisor that I would never hear a word about it.
I havent brought up the flat rate deal to the new ownership yet, I am really focused on trying to get them to understand that this IRS Reporting is 100% unnecessary.
I havent brought up the flat rate deal to the new ownership yet, I am really focused on trying to get them to understand that this IRS Reporting is 100% unnecessary.
Posted on 11/6/15 at 11:45 am to Polar Pop
quote:
I just let them charge all of my miles as personal and take the hit rather than fool with the headache.
You are about to be analy raped on the auto fringe taxable amount on your year end payroll check.
I think some terminology is getting crossed up by your new management team. It is not the IRS you need to be concerned with in this situation. The impact to your net income position is what at risk. All this will depend on the number of miles you have driven and the value of the auto.
Many companies will give you the first couple hundred miles free for personal miles - then charge a nominal rate per mile for anything over the freebe miles. Then you get tagged with auto fringe at year end.
Your new management team is trying to olay by the book and not communicating the process or potential impact.
This post was edited on 11/6/15 at 11:58 am
Posted on 11/6/15 at 12:08 pm to Big Floppy TDs
quote:
Damn man, as soon as they put on that GPS I would have given the truck back.
My initial reaction would be the same - but for the prices of fuel, maintainance, insurance and the monthly P&I, I would have too think hard about giving that back.
That said, companies that do this to fleet vehicles that are not 100% delivery related...screw em and find a better, more trusting company.
There are plenty of legit reason to have GPS placed on your work vehicle..driving history, recent wreck, speeding tickets, mileage fraud worries, etc......for a new management team to come in and do it to everyone is poor management
Baby steps when making changes unless you want employees to quit.
Posted on 11/6/15 at 12:16 pm to nelatf
quote:
for a new management team to come in and do it to everyone is poor management
Definitely sounds like they have ulterior motives. Probably just monitoring it to give them justification for doing away with providing vehicles to employees sometime in the future.
As to the question at hand, they are going a little overboard with it. They are required to report personal use on the vehicle as a fringe benefit, and tax that amount. However most companies just use a percentage, or flat rate, and go on their way.
Posted on 11/6/15 at 1:03 pm to The Spleen
quote:
hey are required to report personal use on the vehicle as a fringe benefit, and tax that amount. However most companies just use a percentage, or flat rate, and go on their way
OK this makes great sense. I just sent the last half of that to my direct supervisor and hopefully he can lobby to the top with it.
I appreciate everyones feedback
Any more insight appreciated.
Posted on 11/7/15 at 5:23 pm to Polar Pop
My guess is that new upper management is used to working at a larger company that gets audited regularly and has to provide more evidence than just employee-kept records.
You're getting a free truck out of it plus gas though, I'd love a deal like that.
You're getting a free truck out of it plus gas though, I'd love a deal like that.
Posted on 11/7/15 at 8:59 pm to foshizzle
Maybe they just want you to put SOMETHING on the log and aren't going to dig deep?
Posted on 11/8/15 at 12:57 pm to foshizzle
quote:
You're getting a free truck out of it plus gas though, I'd love a deal like that.
Definately, I love it! I dont mean to sound ungrateful at all in this topic, I am very fortunate to have the situation.
It is just the unbearable record keeping that they say is required by the IRS.
Each stop has an address, I dont mind putting down "business" or "personal" for the stops. Having to put a location and purpose is the killer.
You would have to write down the location and time for EVERY stop during the day (these are rural area drilling rig stops that arent easy to pick from an address pulled by the GPS report) so it would be accurate on your mileage log, then dictate the reason for the stop. When you are stopping for something work related 20+ times a day, that can become very overwhelming.
Posted on 12/29/15 at 1:39 pm to nelatf
quote:
raped on the auto fringe taxable amount on your year end payroll check.
Correct
Posted on 12/29/15 at 1:49 pm to Polar Pop
Is the management team from a larger company? From what I understand, it's a pain in the butt for an Auditor to use employee records, and properly maintained GPS systems are a billion times easier.
Posted on 12/29/15 at 1:51 pm to Jcorye1
New VP in my office now. He says that he is planning on getting our hit set at a flat rate per month and adjusting our pay to match it.
Hopefully that plan sticks, I got hit really hard on these last few checks for the "true up" at the end of the year.
Hopefully that plan sticks, I got hit really hard on these last few checks for the "true up" at the end of the year.
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