|
I look at it this way:
The IRS business mileage reimbursement is more like an average. On average, their rate of $0.56/mile is how much it costs to own and operate a vehicle. However, since it's an average, your actual full expenses per mile could be lower or higher. Assuming you drive something around that average, you're not really coming out ahead, but you are having your full expenses be covered.
If you really want to know what profit you're bringing in from mileage reimbursement, you'll have to start keeping up with all your expenses and calculate them all per mile. It's not difficult at all. I do it all the time for my job delivering pizza.
Here are calculations you can use to determine your full vehicle expenses per mile:
Fuel
This site or Fuelly calculates it for you.
Depreciation
Keep up with the value of your vehicle each year and take the difference between the values from one year to the next and divide it by the number of miles you drove that year.
Interest (If vehicle was financed)
Calculate how much interest you paid during the year and divide that by the number of miles you drove that year.
Insurance
Add up your premiums for the year and divide that by the number of miles you drove that year.
Taxes/Tag
Divide the yearly cost by the number of miles you drove that year.
Maintenance and Repair
Either:
A. Record all your maintenance and repair expenses for the year and divide that by the number of miles you drove that year. Or...
B. Estimate it by figuring out the cost of every part of your vehicle and divide each of those by the number of miles you expect to get out of each part, then add them all together and add a little extra for emergencies/unforeseeable events.
__________
Add all those costs together, and you'll know your actual full vehicle expenses and can compare that to what you're being reimbursed. You may end up a little disappointed, but with the right vehicle you can make decent money off mileage reimbursement if you drive a lot of miles each year. 400 miles per month probably won't net you much money. 4,000 miles per month would.
__________________
|