Employer won't let me expense mileage

[dave]

So we have a company policy that for any real road trip we are supposed to rent a car instead of expensing our mileage. It ends up being cheaper for the company to do this. In reality, very few people do it however. They usually use their personal vehicles and expense all the mileage.

Today my manager made a point of enforcing this seldom used rule with me. He said he doesn't want it to look like I'm abusing the system.

I didn't push it, and agreed to rent a car for my trip. It is the rule after all. Co-workers have been bugging me about it since I got the car, saying "Wow you get all this mileage reimbursement for free". I try to explain that I've "prepaid" my fuel expenses with my giant battery, while they are paying their fuel costs as they are incurred, but they still don't get it, and perceive that I'm taking advantage of the system.

Anybody else go through something like this?

 

[Liz G]

My 2 cents. I think your employer is wrong. You are still incurring miles on your vehicle which causes it to depreciate. Paying mileage is not just about paying for has it also covers wear and year and depreciation.

 

[riceuguy]

My 2 cents. I think your employer is wrong. You are still incurring miles on your vehicle which causes it to depreciate. Paying mileage is not just about paying for has it also covers wear and year and depreciation.

They aren't required to allow use of personal vehicles, just to reimburse you if you do. That said, it is certainly not abuse...the depreciation is pretty rough, but tire wear and tear alone is twice as high as a normal car. Don't get me wrong, I love getting reimbursed while not having gas or oil changes, but it does push me closer to that $600 service visit, too.

 

[Canuck]

So we have a company policy that for any real road trip we are supposed to rent a car instead of expensing our mileage. It ends up being cheaper for the company to do this.

What if you just printed out the cost of the rental from a rental vehicle website (without actually going through with the rental) and use that as your expense receipt and then take your Tesla. You should submit the "receipt" with a memo explaining that you will take your car but are claiming the equivalent costs of a rental so they don't think your submitting a false receipt -- and you should get prior approval -- but if you do it that way it should make no difference to your company and then you can enjoy driving your car.

 

[yobigd20]

not that I agree with this but doesn't Tesla use a $1 per mile driven depreciation discount when selling their loaner cars? couldn't you argue that the depreciation itself is enough to justify the reimbursement? alternatively, you could point them to the new Blink Charger rates that are so damn high it costs the same to charge the Model S as it would be to fill up a tank of gas. Blink New High Charging Rates $$$

 

[ItsNotAboutTheMoney]

I don't travel for work, but if you would prefer to drive your own car (for some reason), I think it would be reasonable to ask to be reimbursed standard mileage or rental, whichever is lower, although I could understand if the company prefered not to have the administrative burden related to mileage. However, suddenly getting picky on the rules because some mopeople think the Federal mileage allowance is a generous gas payment is not on.

 

[ZBB]

I know a bit about this topic -- I manage the expense reporting process for a company you would all recognize...

You should follow your company's travel policy. If renting a car is less expensive than reimbursing you mileage, you are helping the company save money. Travel policy violations are one of the easiest ways for a company to terminate an employee -- the policy is written, and the expense reports and corporate card spend provide a paper trail that documents what the employee did. Would driving instead of taking a rental car in and of itself lead to termination? Unlikely, but why put something on your record that could be used down the road if you have a manager that doesn't like you?

Keep in mind that your Company does not actually have to reimburse you for travel expenses when traveling for them. Companies do since employee travel expenses are deductible under IRS regulations (and most other country tax laws...). But if you are not reimbursed, you may be able to deduct expenses not reimbursed on your tax return (please consult a tax advisor; IRS publication 463 may also be helpful).

As for mileage reimbursement rates, the IRS sets a rate for each year (they occasionally do a mid year update if gas prices rise fast). For 2014 the rate for business mileage on a personal car is 56 cents per mile. The IRS does not distinguish EVs -- all personal vehicles have the same rate regardless of fuel type. Note -- some countries use different rates for diesel vs petrol and or engine size, but I'm not aware of any EV-only rates.

Now, again, your company may choose to reimburse mileage at a different rate than the IRS specifies, however if they reimburse more than the IRS published rate, the IRS considers the extra amount taxable income to the employee. If you are reimbursed less, you may be able to deduct the difference up to the IRS rate.

While I am an expert in this topic, I am not a tax advisor -- so please do not act on the tax related comments without obtaining guidance from your tax advisor... But I would follow the policy...

edit:
I failed to mention that the IRS rate does not just cover the cost of fuel. It is a rate to reimburse and employee for all costs associated with operating a personal vehicle: insurance, wear and tear, depreciation, fuel, maintenance, etc...

 

[Canuck]

I know a bit about this topic -- I manage the expense reporting process for a company you would all recognize... You should follow your company's travel policy. If renting a car is less expensive than reimbursing you mileage, you are helping the company save money.

Your advice is good from a corporate and tax perspective. But as an employer who reimburses employees for travel expenses (very small company no one would recognize), I find it's much better to bend the rules (not tax rules) - but in this case I would let him have the equivalent cost of a car rental -- that makes no difference to the company but makes the employee happy. And happy employees, who are respected by their employer, perform better and earn the company more money. So even if there is a savings to the company to do things certain ways, if it at the expense of sacrificing employer/employee relations, it may not worth making it an issue. It's hard enough finding good employees as it is.

 

[bonnie]

I know a bit about this topic -- I manage the expense reporting process for a company you would all recognize...

.

hah! I suspected your username was not your initials.

 

[ZBB]

Your advice is good from a corporate and tax perspective. But as an employer who reimburses employees for travel expenses (very small company no one would recognize), I find it's much better to bend the rules (not tax rules) - but in this case I would let him have the equivalent cost of a car rental -- that makes no difference to the company but makes the employee happy. And happy employees, who are respected by their employer, perform better and earn the company more money. So even if there is a savings to the company to do things certain ways, if it at the expense of sacrificing employer/employee relations, it may not worth making it an issue. It's hard enough finding good employees as it is.

I probably should have addressed your first post also... You make a good point. And any good travel policy would allow for flexibility. Your basic suggestion is a good one -- and reimbursing up to the cost of a rental (and gas) would most likely be tax compliant also.

FWIW, the policy where I work has no spending limits in it -- just a broad rule asking employees to choose lower cost vendors and to spend "reasonably." We get requests all the time from various managers asking us to put limits in -- and we always push back based purely on flexibility (plus we're a global company, so a reasonable amount for a dinner in India will be vastly different than in London)

- - - Updated - - -

hah! I suspected your username was not your initials.

Nope... But ZBB also has nothing to do with my current employer. It relates to a summer internship I had in college at BMW in Munich..l

 

[spaghetti]

I know a bit about this topic -- I manage the expense reporting process for a company you would all recognize...

Zero-based bud..... Why have I heard this so often in the last 23 years....

 

[jkirkebo]

Note -- some countries use different rates for diesel vs petrol and or engine size, but I'm not aware of any EV-only rates.

Norway has an EV-only rate, but it doesn't differ much. A little less than 4% higher than the usual rate (NOK 4,20/km instead of 4,05/km).

 

[ZBB]

Norway has an EV-only rate, but it doesn't differ much. A little less than 4% higher than the usual rate (NOK 4,20/km instead of 4,05/km).

Thanks... I'll have to get that set up then!

 

[adiggs]

Zero-based bud..... Why have I heard this so often in the last 23 years....

Ack - I come here to NOT here company acronyms for a while.

I blame Princess Tesla.

 

[bonnie]

Ack - I come here to NOT here company acronyms for a while.

I blame Princess Tesla.

As long as I stay above the line, it's all good.

 

[Rodolfo Paiz]

The employer has the right to do a bunch of things. The employee has the right to choose to work elsewhere.

I've had great success in the past, both as an employee and employer, with the idea of freedom with equivalent costs. As a private pilot, I chose to fly myself to various places in the course of my work. The office simply quoted the ticket they would have bought me on the airline, reimbursed me for that amount, and any difference for or against was then my problem. I would suggest discussing this nicely with your employer, looking for mutually-agreeable solutions. Remember: in many cases involving a population, things must not only BE good, they must also LOOK good to others.

 

[essaunders]

Funny. my company specifically prohibits flying yourself (or any other employee) on business trips.

My company does reimburse standard IRS mileage rates and does strongly encourage rental cars for longer trips. Given they are paying my labor while actively traveling, I doubt there would be much tolerance for (labor) charging for (ev) charging.

 

[PeterK]

Given they are paying my labor while actively traveling, I doubt there would be much tolerance for (labor) charging for (ev) charging.

Except that during the time you're charging you would likely be getting a needed meal, checking and responding to emails and calls, or both. In fact you're saving your employer the five minutes you would otherwise be standing gripping a fuel dispenser handle...