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My company car policy is changing and I'd like advice *updated
Posted on 2/14/19 at 4:10 pm
Posted on 2/14/19 at 4:10 pm
All employees who drive under 15,000 miles a year are losing company cars. Others can choose to keep theirs, or go to personal car. No more gas cards. Gas will go on personal cards.
Company will pay mileage on work related mileage: $0.545 per mile for personal vehicle, $0.16 for fleet vehicle. Company will be using the Concur app to log miles.
Wondering if I should use a personal vehicle. I have an '09 Mazda that is paid for, so I could use that.
Thoughts and advice?
Company will pay mileage on work related mileage: $0.545 per mile for personal vehicle, $0.16 for fleet vehicle. Company will be using the Concur app to log miles.
Wondering if I should use a personal vehicle. I have an '09 Mazda that is paid for, so I could use that.
Thoughts and advice?
This post was edited on 2/15/19 at 4:01 pm
Posted on 2/14/19 at 4:13 pm to tom1987
quote:
'09 Mazda that is paid for,
How many miles you drive? $.55/mile can pay for oil changes and tires pretty quickly, and then pocket the rest.
Posted on 2/14/19 at 4:15 pm to tom1987
quote:
Company will pay mileage on work related mileage: $0.545 per mile for personal vehicle
FYI that's less than the federal standard rate so you may want to look into how that affects you.
Posted on 2/14/19 at 4:21 pm to DFWgolfer318
I see that the IRS rate went to 58 cents on Jan 1. Pretty crappy of the company to pay less than that.
Other than less money, how else could that affect me?
Other than less money, how else could that affect me?
Posted on 2/14/19 at 4:23 pm to tom1987
quote:
Other than less money, how else could that affect me?
Some states mandate that companies meet the federal rate.
Posted on 2/14/19 at 4:29 pm to DFWgolfer318
quote:
Some states mandate that companies meet the federal rate.
Any idea how I can find out which ones? The Google machine didn't help.
Posted on 2/14/19 at 4:31 pm to tom1987
quote:
Any idea how I can find out which ones? The Google machine didn't help.
What state are you located in? Alabama?
Posted on 2/14/19 at 4:39 pm to DFWgolfer318
quote:
What state are you located in? Alabama?
Yes
Posted on 2/14/19 at 4:41 pm to tom1987
quote:
Yes
My quick research shows that there isn't a mandated rate in Alabama for private companies. Public jobs follow federal guidelines
Posted on 2/14/19 at 4:43 pm to tom1987
38.5 cents per mile difference?....if so....not worth the trouble using personal car imo.
Posted on 2/14/19 at 5:15 pm to DFWgolfer318
quote:
My quick research shows that there isn't a mandated rate in Alabama for private companies. Public jobs follow federal guidelines
Louisiana?
Posted on 2/14/19 at 5:56 pm to tom1987
quote:
Thoughts and advice?
You need to make sure the plan is an ACCOUNTABLE PLAN
Whoever is handling this for the company should know the answer. It sounds like it is because the company is using an app to log miles. But this is important so you want to confirm.
Why is this important:
Mileage reimbursements under an accountable plan aren't taxed as income.
Mileage payments under a non-accountable plan ARE taxed as income. Used to be, under a non-accounatable plan, we could then deduct mileage as an itemized deduction. But we can no longer deduct milage as an itemized deduction post-TCJA.
I assume the reimbursement for fleet cars are simply for gas, and the company handles directly all other expenses.
What kind of miles/condition is your 09 Mazda? Do you want to put the additional mileage/wear/tear on it? the net 38-39 cents a mile would like cover regular maintenance, but not major and will likely shorten the remaining years on your car (as opposed to driving a fleet vehicle and parking your personal car).
This post was edited on 2/14/19 at 5:57 pm
Posted on 2/14/19 at 6:26 pm to tom1987
Your car will likely be out of compliance. They are age and mileage restrictions. That being said I think it cost one of my coworkers about $700 per year for being out of compliance. You basically pay taxes on the reimbursement when you’re out of compliance.
Posted on 2/14/19 at 7:28 pm to tom1987
Take whatever option needs the least amount of documentation in concur.
Posted on 2/14/19 at 8:09 pm to tom1987
Federal mileage rate went up to 58cents per mile this year. You are getting jipped
Posted on 2/14/19 at 8:26 pm to FriscoKid
quote:
Your car will likely be out of compliance.
What are the conditions of compliance?
Posted on 2/14/19 at 10:23 pm to tom1987
Your car is paid off - take the personal mileage 9/10 times.
Posted on 2/15/19 at 6:22 am to tom1987
This is why I always negotiate a car allowance vs company car.
Posted on 2/15/19 at 6:50 am to tom1987
That’s not that great a deal OP. What is the 16 cents a mile? Just gas?
If you are under the federal allowance it’s a crappy deal imo.
You can’t afford a new car payment with interest plus gas and maintenance if you are under the Fed amount. If you drive 10,000 miles a year for work that’s $5450. If you get 30 mpg at $2.50/ gallon that’s $830 just for gas. So can you afford a new/ish car, insurance, maintenance, and interest on $4600/ year? Barely, with no maintenance issues. That’s $383/ month which after insurance you really aren’t affording a car payment plus maintenance.
You certainly aren’t making out well. So id be very careful as this saves your company biggly. I’d argue like hell for better mileage reimbursement.
If you are under the federal allowance it’s a crappy deal imo.
You can’t afford a new car payment with interest plus gas and maintenance if you are under the Fed amount. If you drive 10,000 miles a year for work that’s $5450. If you get 30 mpg at $2.50/ gallon that’s $830 just for gas. So can you afford a new/ish car, insurance, maintenance, and interest on $4600/ year? Barely, with no maintenance issues. That’s $383/ month which after insurance you really aren’t affording a car payment plus maintenance.
You certainly aren’t making out well. So id be very careful as this saves your company biggly. I’d argue like hell for better mileage reimbursement.
This post was edited on 2/15/19 at 6:56 am
Posted on 2/15/19 at 3:22 pm to tom1987
Answers to some of your questions from my fleet mgr. Thoughts?
1. Is this an “accountable plan”? Why is this important:
Mileage reimbursements under an accountable plan aren't taxed as income.
Mileage payments under a non-accountable plan ARE taxed as income. Used to be, under a non-accountable plan, you could then deduct mileage as an itemized deduction. But we can no longer deduct mileage as an itemized deduction post-TCJA.
*Let me confirm, but I believe our mileage reimbursements are not taxed.*
2. If you provide a personal car, are there any compliance requirements regarding the age of the car or the amount of miles on the car?
*No, we are not adding any compliance requirements related to age of the car or amount of mileage – the car should be in what a reasonable person would consider appropriate for work.*
3. Does the 15,000 miles indicate personal and business mileage or only business mileage?
*The 15,000 miles is only business mileage*
4. Understanding that gas will be paid out of pocket and then reimbursed through Concur – does this mean for every trip we take we need to route it on the concur app? Including: airport, customer visits, work related errands (post office or office max) etc. – will we be required to put where we are going with each trip?
*correct*
5. As of Jan 1, the IRS standard mileage rate is 58 cents per mile. They just increased to that from $.545 per mile. The ABC policy in the presentation is $.545, which is the old rate. Shouldn’t the mileage reimbursement rate meet the IRS standard mileage rate?
*We’ve been awaiting the change within Concur – When I checked it two weeks ago, it was still showing the $.545 but I just double checked, and it is now using the $.58. I’ll update the information for the FAQ and training for the coming two weeks. The IRS typically sets this in January but the Concur system was delayed in updating. *
1. Is this an “accountable plan”? Why is this important:
Mileage reimbursements under an accountable plan aren't taxed as income.
Mileage payments under a non-accountable plan ARE taxed as income. Used to be, under a non-accountable plan, you could then deduct mileage as an itemized deduction. But we can no longer deduct mileage as an itemized deduction post-TCJA.
*Let me confirm, but I believe our mileage reimbursements are not taxed.*
2. If you provide a personal car, are there any compliance requirements regarding the age of the car or the amount of miles on the car?
*No, we are not adding any compliance requirements related to age of the car or amount of mileage – the car should be in what a reasonable person would consider appropriate for work.*
3. Does the 15,000 miles indicate personal and business mileage or only business mileage?
*The 15,000 miles is only business mileage*
4. Understanding that gas will be paid out of pocket and then reimbursed through Concur – does this mean for every trip we take we need to route it on the concur app? Including: airport, customer visits, work related errands (post office or office max) etc. – will we be required to put where we are going with each trip?
*correct*
5. As of Jan 1, the IRS standard mileage rate is 58 cents per mile. They just increased to that from $.545 per mile. The ABC policy in the presentation is $.545, which is the old rate. Shouldn’t the mileage reimbursement rate meet the IRS standard mileage rate?
*We’ve been awaiting the change within Concur – When I checked it two weeks ago, it was still showing the $.545 but I just double checked, and it is now using the $.58. I’ll update the information for the FAQ and training for the coming two weeks. The IRS typically sets this in January but the Concur system was delayed in updating. *
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