Is being paid for work mileage a money maker?

[gk_ghig14]

Originally Posted by WilliamYH09

Maybe so for the taxes/tag, but that isn't always the case for insurance. To use your vehicle for commercial purposes, you will need commercial coverage unless you want to risk not being covered and then dropped if you do get in an accident during work. Therefore, the extra you have to pay for commercial insurance should be calculated in.

That all depends on the type of driving you're using it for. For example if a real estate broker paid the real estate agent a mileage amount, the agent could just use their standard insurance. However in the case of say a hotshot hauler, yes they would need the commercial insurance

[jamesqf]

Originally Posted by WilliamYH09

How so? A deduction will only earn back a percentage of IRS rate multiplied by your miles driven. How could that cover the expenses you paid while driving?

Because it was an Insight :-) Gas about 5-6 cents/mile, add in everything else and my cost was under $0.10/mile. IRS rate was IIRC $0.50/mile. I was in the 25% tax bracket, so each mile driven took 12.5 cents off the taxes.

[WilliamYH09]

Originally Posted by mcrews

It's been forever since I was paid mileage.
(im self-employeed) but isn't the paid mileage rate from your employer a taxable event?

It's not supposed to be, because it's not meant to be income. Most companies reimburse mileage tax-free to compensate employees for money spent to do business for the company.

[WilliamYH09]

Originally Posted by jamesqf

Because it was an Insight :-) Gas about 5-6 cents/mile, add in everything else and my cost was under $0.10/mile. IRS rate was IIRC $0.50/mile. I was in the 25% tax bracket, so each mile driven took 12.5 cents off the taxes.

I see. Though, $0.10/mile seems a bit low realistically when factoring in everything. If that is true, I may have to find myself an Insight.

[XYZ]

I went back to page 1, post #1, where the OP said:

Originally Posted by pete c

Have been considering changing jobs lately. Would like to get a field technician type job. Some of these positions come with a company car. Some just pay mileage.

I was wondering whether anyone actually has a company car, and what are the perks or benefits of having one nowadays?

[Joggernot]

Originally Posted by California98Civic

Yes, in my case it comes in my check, subject to auto deduct.

Interesting. Mine comes in a separate check with no deductions. I don't know which is the correct way.

[WilliamYH09]

Originally Posted by Joggernot

Interesting. Mine comes in a separate check with no deductions. I don't know which is the correct way.

IRS Topic 510 - Business Use of Car

If you are an employee whose deductible business expenses are fully reimbursed under an accountable plan, the reimbursements should not be included in your wages on your Form W-2 (PDF), and you should not deduct the expenses.

If your employer uses a nonaccountable plan to reimburse you for the expenses, the reimbursements are includable in your wages. Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other compensation and report the total on your Form W-2. Your employee business expenses may be deductible as an itemized deduction. For a definition of accountable and nonaccountable plans, refer to Publication 463 and Topic 514.

[jamesqf]

Originally Posted by WilliamYH09

I see. Though, $0.10/mile seems a bit low realistically when factoring in everything. If that is true, I may have to find myself an Insight.

But as I mentioned above, I don't count everything, because a lot of the costs, like registration and insurance, are simply a consequence of having a car. I'd be paying the same whether or not I drove those extra work miles.

Maintenance has also been really cheap. Other than oil changes, in 10 years I've replaced an O2 sensor, a wheel bearing, and brake pads: maybe $200 total. And of course I do all the work myself.

[Hersbird]

I believe the difference in the IRS reporting is if they give you a flat rate per mile that is reported as income and then you can deduct all actual costs. If they give you your actual expenses say you save receipts for gas or have a company card then that's not reported as income and you probably can't deduct as much. I would still deduct wear and tear, extra insurance, the depreciation accountable to the work use, if those things are not reimbursed by the employer.

[kir_kenix]

My wife had a job recently that paid her $0.56/mile plus a slightly reduced hourly pay for travel time. She drove her '97 Escort and made some pretty good money while she was on the road. The first year she drove something like 30,000 miles, and probably pretty close to 20,000 in the first part of 2013 before she got a different job. The company also paid a % of her car insurance as well.

It ended up being a pretty good deal for us. I got the car from a renter who couldn't pay his bills, so the car didn't cost us much as the property was paid off to begin with (just insurance, taxes, and regular maintenance to the house).

If I would have had to buy her a brand new car for this job, I think we still would have come out ahead provided it was pretty fuel efficient to begin with. I put in a new radiator, hoses, belt, shocks & struts, brakes/rotors/drums all around, 02 sensors, plugs/wires/pcv/tranny filter, oil changes etc as needed so there we no shop fees. The car definitely has more wear and tear on it then when she started, but its still on the road.

I helped her company do some work and they paid me in the same manner. I didn't put nearly as many miles on as her, but I got to ride the motorcycle around and get paid for it. If I could ever find a job that paid mileage + good hourly driving time + good benefits I would jump on it in a second.