Charging Calculations

[hamoneaster]

My work pays for car expenses for business-related use. For 2022, I am trying to figure out how to best track my charging costs so that a portion of that is reimbursed by my work.

I know there are apps out there that tell you how much kWh you charged, but what app is the best for this sort of tracking? I would be charging at home most of the time.

 

[MY1stEV]

Any chance they would just reimburse you the IRS standard mileage amount? It would be a nice little source of passive income.

When you supercharge, you will get a pdf invoice each time under charging history in your Tesla account. For all non-supercharger charging, Teslafi can do what you ask ($5/mo or $50/yr). Use the promo code "FREE30" and you can try it out for a month.

 

[hamoneaster]

Any chance they would just reimburse you the IRS standard mileage amount? It would be a nice little source of passive income.

When you supercharge, you will get a pdf invoice each time under charging history in your Tesla account. For all non-supercharger charging, Teslafi can do what you ask ($5/mo or $50/yr). Use the promo code "FREE30" and you can try it out for a month.

The standard mileage is actually not a good method. It only gives like 55 cents per mile. It's an easy way to do it. But if you calculate your business use and personal use, you can then report ALL expenses (gas/energy, car washes/cleaning, registration, insurance, monthly payment, tires, maintenance, etc) and then deduct them based on the percentage used. Example: If I drove 4000 miles this quarter and 1000 of those were for business, then I have a 25% business use. I could get 55 cents per mile for those 1000 miles which ends up being like $550. Or I can use the actual expense method, calculate the total cost for the quarter which can be like 10k+ for a Plaid, then multiply that by 25% and end up getting $2500 back for that quarter.

 

[ATPMSD]

The standard mileage is actually not a good method. It only gives like 55 cents per mile. It's an easy way to do it. But if you calculate your business use and personal use, you can then report ALL expenses (gas/energy, car washes/cleaning, registration, insurance, monthly payment, tires, maintenance, etc) and then deduct them based on the percentage used. Example: If I drove 4000 miles this quarter and 1000 of those were for business, then I have a 25% business use. I could get 55 cents per mile for those 1000 miles which ends up being like $550. Or I can use the actual expense method, calculate the total cost for the quarter which can be like 10k+ for a Plaid, then multiply that by 25% and end up getting $2500 back for that quarter.

Most companies will not allow you to do what you are proposing given the documention required, and $10K for 3-months seems very high. Perhaps you have already had a discussion with your CFO but if not, I suggest you have one to ensure you are not making bad assumptions.

Some issues from my experience:

• If you are leasing you can submit monthly payments, but if you have a loan generally, you work from a depreciation schedule
• You also do not get to write off other expenses such as tires and maintenance (BTW there is practically no maintenance for a Tesla) until and unless you incur them
• Your electric bill will be maybe $200 for 4,000 miles
• Things like car washes/cleaning are generally not allowed

In any case, good luck!

 

[MY1stEV]

You're probably not going to recoup much on energy and maintenance (because you won't spend much). Registration, insurance, and monthly payments is a different story.

Where I live, electricity is pretty cheap. When charging at home, I think it cost me about 2.3 cents per mile in the summer months, and 1.1 cents per mile the remaining 8 months of the year.

If you check out the maintenance section of the owner's manual, there's not much to do. You might, however, go thru tires faster than you are accustomed, due to the weight of the car and the lure of all that near-instant torque.

 

[hamoneaster]

Most companies will not allow you to do what you are proposing given the documention required, and $10K for 3-months seems very high. Perhaps you have already had a discussion with your CFO but if not, I suggest you have one to ensure you are not making bad assumptions.

Some issues from my experience:

• If you are leasing you can submit monthly payments, but if you have a loan generally, you work from a depreciation schedule
• You also do not get to write off other expenses such as tires and maintenance (BTW there is practically no maintenance for a Tesla) until and unless you incur them
• Your electric bill will be maybe $200 for 4,000 miles
• Things like car washes/cleaning are generally not allowed

In any case, good luck!

I've talked to our accountants already and they do confirm what I've said. Some of what you said is not true though.

- Yes, if you have a loan then it's a depreciation schedule or monthly on a lease; either is a decent chunk on a Tesla
- You do get to write off maintenance costs, including tires, repairs, fees, etc. I do agree that maintenance cost is low on a Tesla but I've also had two flats in two months on my prior tesla (bad luck?! lol)
- IRS does not specifically mention cleaning and washing, but my accounts confirm that many businesses write those off and it is allowed - they've been doing it for many many years, it's part of general wear/tear/upkeep. Ofc you cant get a $200 car wash every week.

Per IRS:
Actual Expenses - To use the actual expense method, you must determine what it actually costs to operate the car for the portion of the overall use of the car that's business use. Include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) attributable to the portion of the total miles driven that are business miles.

Source: Topic No. 510 Business Use of Car | Internal Revenue Service

 

[swaltner]

I won't talk about the tax questions because I don't care about them, but as to how to track your expenses, you'll want to put a meter on the line running to your outlet used for charging or your wall charger if you go the permanent mounted route. Google something along the lines of "14-50 electricity meter" for a few options. Many threads have been started here on tracking electricity usage at the outlet. Something along the lines of https://www.ekmmetering.com/products/ekm-omnimeter-i-v3 or even buying a used meter can retired from a utility company and mounting that in-line. Myself, I have a TED 5000 (The Energy Detective) system monitoring electricity going to the EVs.

Once you have the kWh consumed for charging over the course of the month, you can correlate that to your electricity bill to calculate the cost of that electricity as a portion of your electricity bill. The meter will display a running total on the total energy consumed. You'll need to keep a log of the ready at the end of each month (or billing cycle) and subtract off the previous value to get the usage for that month.

 

[hamoneaster]

I won't talk about the tax questions because I don't care about them, but as to how to track your expenses, you'll want to put a meter on the line running to your outlet used for charging or your wall charger if you go the permanent mounted route. Google something along the lines of "14-50 electricity meter" for a few options. Many threads have been started here on tracking electricity usage at the outlet. Something along the lines of https://www.ekmmetering.com/products/ekm-omnimeter-i-v3 or even buying a used meter can retired from a utility company and mounting that in-line. Myself, I have a TED 5000 (The Energy Detective) system monitoring electricity going to the EVs.

Once you have the kWh consumed for charging over the course of the month, you can correlate that to your electricity bill to calculate the cost of that electricity as a portion of your electricity bill. The meter will display a running total on the total energy consumed. You'll need to keep a log of the ready at the end of each month (or billing cycle) and subtract off the previous value to get the usage for that month.

Oh this is splendid!

 

[ATPMSD]

I've talked to our accountants already and they do confirm what I've said. Some of what you said is not true though.

You have an incredibly liberal company! Congratulations.

 

[hamoneaster]

You have an incredibly liberal company! Congratulations.

I mean not really lol. The IRS website literally says you can deduct those. So if your company doesn't let you, the company is shafting you and themselves. Because those are literal costs of operating a vehicle for a company use that the company can deduct from their taxes and reimburse to you. So its a win for the company and win for you -- and the IRS says go ahead. nothing 'incredibly' liberal about it.

 

[ATPMSD]

I mean not really lol. The IRS website literally says you can deduct those. So if your company doesn't let you, the company is shafting you and themselves. Because those are literal costs of operating a vehicle for a company use that the company can deduct from their taxes and reimburse to you. So its a win for the company and win for you -- and the IRS says go ahead. nothing 'incredibly' liberal about it.

But here is the issue as to why this is generally not allowed. First, what is to stop someone from buying a Ferrari and expecting the company to pay 25% of the bill? Also, mileage reimbursement is meant to cover operating cost and is not intended to help you pay for the car.

Generally, what you are doing is done by people who own their own business. Most corporations do not offer this option.

 

[hamoneaster]

But here is the issue as to why this is generally not allowed. First, what is to stop someone from buying a Ferrari and expecting the company to pay 25% of the bill? Also, mileage reimbursement is meant to cover operating cost and is not intended to help you pay for the car.

Generally, what you are doing is done by people who own their own business. Most corporations do not offer this option.

Just depends on how higher up you are in the said corporation. They are all doing it, but they just aren't doing it for everyone and esp not for the W2 hourly employees lower on the totem pole. Corporations want a healthy amount of tax deductions -- that's what America is all about!

And yes, the IRS has thought about people buying a Ferrari and expecting the company to pay for it. So they do put a cap on the amount that can be reimbursed. I personally know other corps that do some "incredibly liberal" stuff. I have a buddy who is in the same line of work as I am and he gets $2.5k monthly for car and travel expenses -- it's in his contract and has been for several years now. Now THAT'S incredibly liberal. What my Corp is doing is literally by the tax book and deducting only what the IRS allows.

You seem to change your narrative with each post when I've literally linked the source on the IRS website that literally tells you what and how much car costs you can deduct. And again, standard mileage reimbursement AND actual cost are TWO different methods endorsed by the IRS to cover vehicle operating costs for business. You can choose whatever is most advantageous for your corporation.

Nevertheless, I extend my gratitude to those who posted helpful insights to my original question. I will look into an electricity meter!!

 

[ATPMSD]

You seem to change your narrative with each post

No change, just illustrating the many issues involved and some of the reasons why many companies do not allow what your company does. To your point, your buddy is getting $2.5K / month where, if the company used the mileage reimbursement model, he would be reimbursed in the hundred of dollars. Financially, this is really foolish of the company. But they, and your company, feel their reimbursement model is appropriate for the talent they want to acquire or retain.

 

[hamoneaster]

No change, just illustrating the many issues involved and some of the reasons why many companies do not allow what your company does. To your point, your buddy is getting $2.5K / month where, if the company used the mileage reimbursement model, he would be reimbursed in the hundred of dollars. Financially, this is really foolish of the company. But they, and your company, feel their reimbursement model is appropriate for the talent they want to acquire or retain.

Financially foolish when the IRS literally allows you to do it and hundreds of companies are doing it across the nation? Lol, Okay, bro, I don't think you understand what financially foolish is. It's actually financially good for the company to decrease its tax liability. Just because your company doesn't let YOU do it doesn't mean "many" companies don't. Your last post doesn't even make sense. But again -- It's advantageous to the employee and the coorporation to use EITHER standard milage OR actual cost methods -- both are approved by the IRS and both decrease a corporation's tax liability. They can use whichever one gives them the most benefit. I think you're viewing the situation as "if the company has to reimburse $2k using the actual cost method, then that's bad for the company as they are losing money because they could have reimbursed using the standard mileage method and only reimbursed perse $200." In actuality, the situation is that large corporations can use either method (and many other deductions) to reimburse and those reimbursed amounts are deducted from the company's balance sheet and that decreases the companies tax liability.

I'm going to stop trying to get down to your level though because you literally do not understand how corporations, tax deductions, and the IRS work even when I have provided the literal IRS source. If you think that a corp reducing its tax liability is "foolish" then you really don't understand the matter at hand no matter how many times you reply twisting your narrative.

Plus it wasn't my intention to open a post to argue with someone who doesn't understand how those things work.

 

[ATPMSD]

$1,000,000 income - $100,000 tax deduction for remimbursing cars is now a tax liability of $900,000. 30% tax costs the company $270,000 in taxes and, of yeah, the $100,000 they paid out to employees which is $370,000 out of pocket (IRS and employees)
Or
$1,000,000 income - $1,000 tax deduction for “mileage” only = $999,000 tax liability, 30% tax costs the company $299,700, plus the $1,000 they paid out comes to $300,700. That is $69,300 LESS!

Now I am done with you.

 

[Archstone]

$1,000,000 income - $100,000 tax deduction for remimbursing cars is now a tax liability of $900,000. 30% tax costs the company $270,000 in taxes and, of yeah, the $100,000 they paid out to employees which is $370,000 out of pocket (IRS and employees)
Or
$1,000,000 income - $1,000 tax deduction for “mileage” only = $999,000 tax liability, 30% tax costs the company $299,700, plus the $1,000 they paid out comes to $300,700. That is $69,300 LESS!

Now I am done with you.

Long time reader, first time poster. Okay, so an actual corporate accountant here and I deal with situations like this often.

ATPMSD, you are incorrect. If a company pays out $100,000 in actual-cost reimbursements to its members then that does not equate to only a $1,000 in standard-mileage calculation. A $1,000 mileage-based reimbursement is only 1900 miles driven. If a company is reimbursing out $100,000 in actual-cost total to its member, then they have driven more than 1900 miles combined. If they did indeed only drive 1900 miles combined then even using actual-cost, they would not get a $100,000 reimbursement because use for work would be too low. So you really can’t compare the two methods in the manner that you are. They aren’t the same. Just because you’re saying 100 + 1 = 200 doesn’t mean your math is correct, I’m sorry, no mic drop there.

The calculations for these types of things are very lengthy and the IRS has strict rules on the actual-cost method, including how much its used for work etc. But OP is correct. For many large corporations making millions, it’s prudent for them to reap as many tax deductions as they can. Even for personal taxes, it’s prudent for you to reap as many tax deductions as you can! Vehicle use for work is one of those. As in OP’s IRS article, you can turn in all of your expense receipts (whether Tesla or some other car) and your accountant should be able to run through the calculations to figure out which method gives you to highest reimbursement. If your accountant is advising against getting tax deductions allowed by the IRS, then you should probably try to find a new accountant. Large corporations go out of their way to find tax deductions. The IRS article explains the rules very clearly (if you're an accountant), and your thought process and math in this matter is just incorrect. Hundreds and thousands of US businesses use these deductions and the IRS has went out of their way to write rules to make sure everyone does it correctly. If you still have doubts, then please read the IRS article on these deductions or even better, call up the IRS yourself and ask them questions! Nothing better than increasing the breadth of your knowledge in areas it lacks!

 

[ATPMSD]

@Archstone

The examples I gave were intended to be a really good reimbursement versus a piss-poor one. And yes, if we only look at the income statement you are 100% correct. But as you know we have to look beyond that, a company can have a good income statement and still be cash poor. The point I have been doing a piss poor job in trying to make is that deductions like this are paid out of cash, as are taxes. In the first case the company is paying out almost $70,000 more than in the second. Which of course is reflected on the balance sheet.

 

[rameshratan]

My work pays for car expenses for business-related use. For 2022, I am trying to figure out how to best track my charging costs so that a portion of that is reimbursed by my work.

I know there are apps out there that tell you how much kWh you charged, but what app is the best for this sort of tracking? I would be charging at home most of the time.

Hopefully your company should be reimbursing you based on miles driven. There is a IRS rate for 2022 is 58.5 cents per mile. This includes the wear and tear on the car.