The question above was posted on LinkedIn and I figured it would be important for Quino readers to know. Not to mention, I have dealt with this problem myself when recording my mileage.

Devesh Dwivedi on LinkedIn says, “If the employee goes to a client site and the mileage is less than normal commute (normal commute being, his home to your office/ primary place of him employment) then there’s no reimbursement however, anything traveled more than the normal commute should be reimbursed.

For example, if the employee visits a client 10 miles from his home and does not come in to office that day, the 20 miles roundtrip drive of the day will not be reimbursed for (being under the normal commute 40miles round trip in your case) however, if the employee visits the client plus comes at work then miles over normal commute should be reimbursed (20 miles in this case).” http://www.linkedin.com/answers/hiring-human-resources/personnel-policies/HRH_PPO/277363-230164?searchIdx=0&sik=1258516961637&goback=%2Easr_1_1258516961637

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In addition, in my situation, I was using my car to get to and from networking events. Some days I would go to the networking event from home and then go to the office after the networking event. Adhering to the processes set by my company, I would subtract 14 kilometres (my daily commute to work from home) from the kilometres accumulated to the networking event and back to the office. The Calculation would be 30 kilometres (mileage to networking event from home) + 40 kilometres (mileage from networking event to office) – 14 kilometres (daily commute to work from home) = 56 kilometres; therefore, after my calculation I am entitled to 56 kilometres for reimbursement.

As always, consult your accountant to be informed of your company’s specific tactics when addressing this issue. OR if you want to consult the Fair Labor Standards Act (FLSA) go to http://www.opm.gov/oca/worksch/HTML/travel.asp#commtime.

-Ashton Byrne, Marketing Coordinator for Quino Solutions Inc.

As I have mentioned previously, instead of having to navigate aimlessly through the government’s documents… let me do the hard work for you. Below is the “need to know” about mileage deduction according to the US government.

The IRS says,

“Deductible Car and Truck Expenses

 Ordinarily, expenses related to use of a car, van, pickup or panel truck for business can be deducted as transportation expenses. Use of larger vehicles, such as tractor-trailers, is treated differently and is not part of this discussion. In order to claim a deduction for business use of a car or truck, a taxpayer must have ordinary and necessary costs related to one or more of the following:

Traveling from one work location to another within the taxpayer’s tax home area. (Generally, the tax home is the entire city or general area where the taxpayer’s main place of business is located, regardless of where he or she resides.)

Visiting customers.

Attending a business meeting away from the regular workplace.

Getting from home to a temporary workplace when the taxpayer has one or more regular places of work. (These temporary workplaces can be either within or outside taxpayer’s tax home area.)

Expenses related to travel away from home overnight are travel expenses. These expenses are discussed in Chapter One of Publication 463, “Travel, Entertainment, Gift, and Car Expenses.” However, if a taxpayer uses a car while traveling away from home overnight on business, the rules for claiming car or truck expenses are the same as stated above.

It is important to note that costs related to travel between a taxpayer’s home and regular place of work are commuting expenses and are not deductible.

Taxpayers can choose to use either the standard mileage rate or actual expenses to compute their allowable business deduction. They may want to figure the deduction using both methods to see which provides a larger deduction.

Standard Mileage Rate Method

The standard mileage rate may be used to figure the deductible costs of a vehicle that is owned or leased. If a taxpayer wishes to use the standard mileage rate for a leased vehicle, it must be used for the entire lease period. In other words, a taxpayer must use the standard mileage rate for the first year a vehicle is available for business use in order to use the standard mileage rate in subsequent years.

The standard mileage rate is adjusted annually by the IRS to reflect changes in the cost of operating a vehicle. In some situations it is adjusted during the year. The 2006 standard mileage rate of 44.5 cents per mile, as well as rates for previous periods, can be found at http://www.irs.gov/taxpros/article/0,,id=156624,00.html

The standard mileage rate is used in place of actual expenses. Taxpayers who choose the standard mileage rate may not deduct actual expenses, such as depreciation, lease payments, maintenance and repairs, gasoline (including gasoline taxes), oil, insurance or vehicle registration fees. Business-related parking fees and tolls may be deducted in addition to the standard mileage rate. Fees for parking at a taxpayer’s main place of business or tolls related to commuting to and from that main place of business are personal expenses which are not deductible.

Actual car or truck expenses include:

Depreciation, Lease payments, Registration fees, Licenses, Gas, Insurance, Repairs, Oil, Garage rent, Tires, Toll, and Parking fees

These and other expenses are discussed in detail beginning on page 16 of Publication 463. If business use of the vehicle is less than 100 percent, expenses must be allocated between business and personal use. Only the business use percentage of each expense is deductible.”

If you needed more information please contact the Internal Revenue Service (IRS). Also, consult your financial advisor or accountant for your specific company processes as they may be different from what the government is offering.

- Ashton Byrne, Marketing Coordinator for Quino Solutions Inc.

The CRA (Canadian Revenue Agency) says,

“Motor Vehicle Expenses

3. Where a “motor vehicle” is used by an individual in a taxation year partly to earn business income and partly for personal use, the deductible amount is normally that proportion of the aggregate of the

(a) total operating expenses of the vehicle incurred by the individual in the year,

(b) capital cost allowance, and

(c) interest

that the distance traveled by the vehicle to earn the business income is of the total distance traveled by the vehicle for the year. For example, where the aggregate of (a), (b) and (c) as described above for a year is $8,000 and the total distance traveled for the year is 32,000 kilometres of which 24,000 represent business use, the deductible amount is $6,000 determined as follows:

(24,000 ÷ 32,000) × $8,000 = $6,000

4. Should an individual own or lease two or more “motor vehicles” used partly for business purposes and partly for personal purposes, the above calculation may be applied separately for each vehicle or, for convenience, the calculation may be applied for both or all the vehicles taken together. That is, the operating expenses, capital cost allowance and interest (see 5, 13 to 20 and 21 below) for each “motor vehicle” may be combined and the deductible amount determined on the basis of the ratio of combined distance traveled for business purposes to combined total distance traveled, provided the result so determined is reasonable and not materially different from that where the determination is made for each vehicle.

5. The term “operating expenses” referred to in 3(a) above includes the cost of fuel, maintenance (for example, car washes, grease, oil and servicing charges), repairs (other than accident repairs-see 7 below), licenses, insurance and, except as noted in 6 below, “eligible” leasing costs (see 9 to 12 below), less the aggregate of all rebates or other amounts (except where used to calculate the “eligible” leasing cost) received or receivable by the individual for the expenses and not included in the individual’s income.

6. Where an individual, who leases a “motor vehicle” on a long-term basis but is not entitled to claim capital cost allowance on it, makes frequent use of the vehicle during normal work hours for business purposes, but the distance traveled for that purpose is comparatively low, the “eligible” leasing cost (see 9 to 12 below) for that vehicle may be excluded from the operating expenses if the individual so requests and the circumstances warrant it. The “eligible” leasing cost is then apportioned on the basis of a reasonable combination of distance traveled and time the “motor vehicle” was used for business purposes. For example, if a “motor vehicle” were used for business purposes five days out of seven in a normal work week, it might indicate that (allowing for personal use in the evening, usual holidays, time off for sickness, etc.) it was used 65% of the time for business purposes. If, on a distance-traveled basis, the vehicle were used only 25% for business purposes, combining the two factors might suggest that 45% of the “eligible” leasing cost should be attributed to business use. However, where a “motor vehicle” is used infrequently for business purposes, the apportionment must be on the distance-traveled basis alone, even though the vehicle is available at all times for business purposes.

7. Accident repair expenses, whether incurred to repair damages resulting from the accident to a “motor vehicle” driven by the individual or to the property of others, are deductible in full if the vehicle was being used for business purposes at the time of the accident. Any amount deductible is net after recoveries through insurance or damage claims. No portion of such expenses is deductible if the vehicle was being used for personal purposes at the time of the accident.

8. To be deductible, “motor vehicle” expenses must be reasonable in the circumstances and supportable by vouchers. (The vouchers need not be filed with the individual’s income tax return; however, they must be retained for examination on request.) A claim by an individual for “motor vehicle” expenses calculated on a cents-per-kilometre (mile) basis is not acceptable. To support a claim where a “motor vehicle” is used in part for business purposes and in part for personal purposes, a record should be kept of total distance traveled and distance traveled for business purposes in a year. The record should contain at least the date, destination and distance traveled for each trip.” http://www.cra-arc.gc.ca/E/pub/tp/it521r/it521r-e.html

If you needed more information please contact the Canadian Revenue Agency (CRA). Also, consult your financial advisor or accountant for your specific company processes as they may be different from what the government is offering.

 FYI: This post is part 1 of 2 that will outline exactly what the government says about deducting your mileage. Next week I will post the details for mileage deduction according to the IRS (Internal Revenue Service).

Hope this helped

-Ashton Byrne, Marketing Coordinator for Quino Solutions Inc.

-          “Don’t charge for airfare, lodging, rental cars or meals UNLESS it’s an unusual engagement where you will be on-site for days or weeks at a time.” –Greg Brooks of West Third Group

-          “Submit an expense report to [your client] for mileage per trip. It is one of the conditions of the rate per consultation.” –Kevin Johnson of KEVIECO LLC

-          “Work [out] the details during the pre contract negotiations…adding costs after they are closed can become an embarrassing issue.” –Andy Hamer of New Mindset Business Consultants

-          “Do not charge for local – commuting travel, build it into your rates. Do not charge for commuting mileage either, but keep track for tax purposes. However, for out of town travel (travel in excess of two hours) you must negotiate that up front.” – Kathleen Schneibel (Entrepreneurial Accountant)

There are other ways to bill your travel time; however, the answers above are only a few suggestions by business professionals.

If you would like to see the discussion which sparked this blog post click here

If you have another strategy that I didn’t add above leave a comment and tell everyone how you bill for travel time… lets help each other out.

-Ashton Byrne, Marketing Coordinator at Quino Solutions Inc.

The IRS issues the maximum rate allowed for reimbursement, whether or not a company adheres to that rate is the company’s decision. There could be three situations:

1. An employer has a lower rate than the IRS.

What does that mean for you?

• You are not getting “jipped;” but you should claim the difference as an expense.  

2. An employer has the same rate as the IRS.

What does that mean for you?

• Most employers should ask you to keep records for the company’s tax purposes.

3. An employer has a higher rate than the IRS.

What does that mean for you?

• You should claim the difference as income. In addition to keeping records for tax purposes.

The answers above should also pertain to the Canadian Revenue Agency for those Canadian readers.

*If you have any questions or concerns about mileage reimbursement rates please contact your company financial administrator, the IRS, or the CRA. Quino Solutions is not responsible for the reimbursement of any mileage expenses. 

There has been a lot of publicity concentrated on the HST; one event through the Vancouver Board of Trade featured Colin Hansen, MLA. He said that “[the HST] lays the foundation for economic recovery” and “we (the government) believe in BC, we believe in the private sector, we believe in small business…”

Yet, what does the HST mean for you and your vehicle expenses. It won’t effect your mileage deduction, the 52cents that you deduct per km is a flat rate; therefore, the HST shouldn’t have an effect on your mileage logging. But, there will still be an addition HST charge when servicing or fuelling your vehicle.   

Fortunately, companies will be eligible to claim back 12% of tax spent. Unfortunately, consumers will have to “eat up” the additional 7% (12% HST – 5% GST).

What do you think about the HST? Leave your opinion below. Post a comment and tell the rest of Quino’s readers how you feel… 

- Ashton Byrne, Marketing Coordinator for Quino Solutions Inc.

*Note: the information above was gathered from the BC government and the Vancouver Board of Trade. If you have any questions or concerns regarding the HST, please contact the BC government for answers.

For example, if you don’t log your mileage:

I go to roughly 4-5 networking events a month and 2 sales calls a week. Therefore, according to Canadian tax legislation I am eligible to deduct roughly $200 a month (calculated with .52 cents per km traveled). If I wasn’t tracking my mileage I would be missing out on $200 a month and $2400 a year.

For example, if you log your mileage manually:

If you spend 30 seconds every time you get in and out of your car to record your starting and ending odometer reading. AND you take 4 business trips a day; 5 days a week you are spending 10 min weekly to record your mileage. 40 min monthly.

- After a week’s worth of data with the Quino MileTracer, same trips, it would only take you 3min to generate an excel report for the week. Only 12 min monthly! 60 percent less time used when automating your mileage recording, more time spent on the job.

“Get down to business. Automate your mileage recording.”

If you want to see how other people are logging their mileage go to http://polls.linkedin.com/p/58190/aewlt. And while you’re there, tell me your mileage logging strategy, if any. 

“Don’t worry about it. Automate it.” Buy your Quino MileTracer today. Or, fill out a contact form to get more information.

- Ashton Byrne, Marketing Coordinator

Quino Solutions develops automatic mileage loggers to lower the tax burden for people. For a one time investment and no monthly fees Quino’s customers are able to automatically record their mileage for reimbursement and tax deduction purposes. The device stores location data that can later be viewed and exported into google maps and/or Excel.

The claim: Log your business mileage and claim accurate mileage expenses without lifting a finger! The times when you had to use pen and paper to log your mileage are long gone.

 “Our research has shown that a lot of people leave money on the table because they do not want to go through the hassle of recording their mileage manually. Using our solution there are no more excuses not to record your mileage. Our device does the job for you.”  -Philipp Fuhrmann, Business Development Manager

Consider this: The average self-employed person in North America drives about 15,000 km/year for business related purposes leaving the average tax deduction at $7,800 (52cts/km in Canada).

With that in mind you should think twice whether or not to log your business mileage. 

Can you afford to not claim that kind of money?

-Ashton Byrne, Marketing Coordinator for Quino Solutions Inc.

> After working with Quino Solutions for the past two months I really admire the passion and intelligence used to develop the Quino MileTracer. The MileTracer is great product with a simple purpose. Claim your money. “Get down to business. Automate your mileage recording.”

NO… The GPS satellites will stay in the sky! 

It has been reported that some of the GPS satellites in the sky are reaching their end of life.   However, reports from the US government have mentioned that there are more satellites in the sky than ever before.

 24 satellites are required in orbit in order to maintain accuracy acceptable to commercial and military needs.  There are currently 34 so although we may experience degradation over the short term the system will remain functional.

 Here is a link to an article on the subject which was posted May 21, when I first posted this blog.

 http://news.idg.no/cw/art.cfm?id=650277B6-1A64-67EA-E43C4F57008DA7A1

 The need for GPS is paramount.  The people of the world need GPS technology including the US government, Airlines and other aircraft industries, ship navigation, oil and gas, mining, sporting industries.  The list goes on and on.   The really neat thing is that this system is so important that the European Union has developed a new system just to compete called the Galileo system.  So do not worry the sky will not fall…and yes you will find your way home, find that important fishing hole, and record that all important extra mile for your tax reimbursement. 

 -Chris Pinter, President of Quino Solutions Inc.

Nowadays everything is moving to digital. Why? It is easier and faster to work digitally than using any technologies of the past.

Again, throw out your log books. They aren’t worth the stress anymore. Quino Solutions’ MileTracer tracks your mileage automatically; you buy the MileTracer you buy into efficiency. According to eHow.com there are 25 steps to tracking your mileage manually:
Step 1: Get a notebook and a pen with a pocket clip. Clip pen to notebook.
Step 2: Designate a readily accessible spot in your vehicle for the notebook and pen.
Step 3: Write in the notebook the odometer reading of your vehicle every January 1 ‘ or the odometer reading on the date you begin using the vehicle for business.
Step 4: Label a file folder, “Vehicle Expenses,” and write on the folder the current year.
Step 5: Designate a handy place to keep the file folder. The glove compartment is a possible location.
Step 1: Write down the date, the number of miles driven and the business purpose for each business errand or trip, in one section of notebook.
Step 2: Continue to add each trip to the list.
… And the steps go on and on and on

How does that compare to Quino Solutions MileTracer? It takes only 4 steps to track your mileage with Quino Solutions’ MileTracer.
Step 1: Leave device in vehicle
Step 2: Plug device into PC via USB
Step 3: Filter your information
Step 4: Export to excel and add any other vehicle expenses

It is 6 times more efficient to track your mileage with the MileTracer then it is to use a pen and paper. How about that for efficiency?

- Ashton Byrne, Marketing Coordinator for Quino Solutions