This is a multi part question and I know TWW can come through.

My company requires us to be on the road 2-3 days per week in our personal vehicles. Our mileage reimbursement for the last 2 years has been set at 34 cents per mile which we are paid back by submitting a weekly expense report. 34 cents/mile remains the rate for 2008.

After talking to a few of my friends who travel for work I have been told that 34 cents is a garbage rate. Upon a google search I found that 48.5 cents was the Federal IRS Mileage Rate for 2007 which has been bumped up to 50.5 cents for 2008. I then verified with two colleagues that they were indeed paid the appropriate 2007 and are currently being paid the IRS's 2008 rate for business travel.

Using the following links I did a little research:

1) http://stonecarlie.com/headlines_sub.asp?NavID=226&nID=795
2) http://en.wikipedia.org/wiki/Business_Mileage_Reimbursement_Rate


..and I found

in link #1)

Quote :

"The Business Mileage Reimbursement Rate is also used by employers for computing employee reimbursement amounts when an employee operates an employee-owned automobile for the employer's business purposes."

in link #2)

Quote :

"A taxpayer may use the business standard mileage rate with respect to an automobile that is either owned or leased by the taxpayer. A taxpayer generally may deduct an amount equal to either the business standard mileage rate times the number of business miles traveled or the actual costs (both fixed and variable) paid or incurred by the taxpayer that are allocable to traveling those business miles."

Question #1) What's the deal with my firm paying below the IRS rate? I did not see anywhere in the literature to directly state it was required, but it seems that other companies are keeping up.

Question #2) If I have to loose the battle with my firm not abiding by the suggested reimbursement rate, could I legally claim the difference (48.5 - 34 cents) on my 2007 Federal Tax return?

Any other insight would be helpful.

1/25/2008 5:07:09 PM

bttt

1/26/2008 10:49:00 AM

yeah, 34 cents per mile sucks, but a private company can pretty much pay however much they like. i don't see any reason why you couldn't deduct the full rate though

1/26/2008 11:29:19 AM

thanks to the reply. I'm hoping someone who gets mileage reimbursement has any related feedback, anyone?

1/26/2008 5:03:26 PM

The real question is, what kind of cheapass company do you for?

1/26/2008 5:15:29 PM

yea i was told in a similar situation to write off the difference but i dont think i kept very good track of my milage

1/26/2008 5:34:21 PM

Yes, you can claim the full rate on your tax returns, even though you aren't being compensated at that rate. Your company can choose to reimburse at whatever rate they choose, but only 50.5 cents/mile is claimable. Really, it is against their interests to not be paying you the full rate, unless they are paying you 34 and claiming 50.5 (which is, ahem, ILLEGAL.)

1/26/2008 7:00:57 PM

Quote :

"The real question is, what kind of cheapass company do you for?"

The answer is, a great company that just has issues with mileage reimbursement. I have actually been very please as they give me a stipend that overpays my home internet, cell phone, blackberry service, and my travel budget goes up every quarter. Good thing I travel to Asheville, Charleston, Augusta, and Greenville, SC alot

Quote :

"yea i was told in a similar situation to write off the difference but i dont think i kept very good track of my milage"

I might be in luck because I submit a weekly mileage reimbursement and have hard data for every mile I have traveled in 2007. I'm just hoping that I can deduct the difference with that aggregrate mileage.

Quote :

"Yes, you can claim the full rate on your tax returns, even though you aren't being compensated at that rate. Your company can choose to reimburse at whatever rate they choose, but only 50.5 cents/mile is claimable. Really, it is against their interests to not be paying you the full rate, unless they are paying you 34 and claiming 50.5 (which is, ahem, ILLEGAL.)"

Good stuff - I have finished my tax filing for 2007 as of today and since "I have people" Im going up there Monday to confirm and see which form to file. I will keep everyone posted so hopefully we can help some other people stick it to the man. Thanks all!

1/26/2008 7:51:26 PM

I actually deal with this a lot in my work.

Quote :

"Question #1) What's the deal with my firm paying below the IRS rate? I did not see anywhere in the literature to directly state it was required, but it seems that other companies are keeping up."

It is true that the company can reimburse you at a rate below the rate that the IRS allows. Companies are all over the place on this (I know of one company that only reimburses $.20/mile). While the company I work for reimburses at the IRS rate, it's been my observation that more don't than do.

Quote :

"Question #2) If I have to loose the battle with my firm not abiding by the suggested reimbursement rate, could I legally claim the difference (48.5 - 34 cents) on my 2007 Federal Tax return?"

I worked this out w/ my CPA a few years ago. Here is how you recover the difference: You can't claim a deduction of $.145/mile (48.5 - 34 cents) after you were already reimbursed for those same miles at the $.34 rate. What you have to do is take the amount that you were reimbursed ($.34/mile * 'x' miles) and call that income. You then take ('x' miles * $.485) and take that total as a deduction.

Save your original expense reports because they will now serve as your mileage log.

This is also the same way that you recover the difference if you work for a company that reimburses you for per diem at a rate that is less than what the IRS allows.

(By the way, the 'I have people' tax preparers are most likely not going to know how to do this. My advice is to get a proper accountant)

[Edited on January 26, 2008 at 9:50 PM. Reason : . ]

1/26/2008 9:35:00 PM

Quote :

"It is true that the company can reimburse you at a rate below the rate that the IRS allows. Companies are all over the place on this (I know of one company that only reimburses $.20/mile). While the company I work for reimburses at the IRS rate, it's been my observation that more don't than do."

this was my understanding as well. although i don't know first hand though because my company does pay 48.5 cents/mile.

^ and great info about taxes btw.

[Edited on January 28, 2008 at 12:51 PM. Reason : irs]

1/28/2008 12:50:25 PM

There can be lots of variables in the rate. The university will only reimburse you at the full rate if a state-owned vehicle is unavailable for whatever reason. If a state-owned is available and you choose to use your personal vehicle, the rate is somewhere around .30/mile IIRC.

1/28/2008 5:10:29 PM