YES
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.
Everyday thousands of business people don’t log their mileage properly or at all. Don’t miss out on tax dollars you could be receiving.
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
Vancouver, September 11, 2009 – Quino Solutions Inc. is happy to announce the release of the MileTracer. The MileTracer enables the user to automatically record mileage for mileage reimbursement and/or tax deductions. The MileTracer is targeted at independent sales people, contractors, installers, and self employed professionals.
“Our innovative approach to mileage recording is designed to save time and money and provide our clients with an audit proof mileage log” -Chris Pinter, CEO of Quino Solutions Inc.
Get rid of that log book! Quino Solutions Inc. developed the software and hardware which will replace the log book that we all despise on a daily basis. The hardware is designed as a plug-in-and-forget solution for worry free mileage recording and reporting. Access the stored data from the device by simply connecting it to your PC via USB. The software interface makes navigation and customization of the data easy.
Get this!
Quino Solutions Inc. is the leader in mileage logging expense tools and covert tracking devices used around the world. The company’s core competency resides in the development of leading edge, low-power wireless technology. The company is privately held and currently expanding its investor base. For more information about Quino Solutions, visit the Quino website at http://www.quino.ca.
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We, at Quino, have developed our software to accommodate to the government’s regulations according to vehicle use for business purposes. Therefore, because we serve to protect our clients from audits with either the IRS or CRA, we figured an update would be nice.
The Minister of Finance Jim Flaherty announced, late last year, some key points for automobile deduction limits and expense benefit rates for businesses:
Capital Cost Allowance (CCA) stays at $30000 for purchases after 2008
The limit of deductible leasing costs have remained at $800/month
Maximum allowable interest deduction for borrowed or purchased after 2009 remained at $300/month
The tax exempt, for employees using their personal car for work, remained at a 52 cents limit up to 5000km and 46 cents for any additional kilometres. If you live in the Yukon Territory, Northwest Territories, or Nunavut that tax exempt is 56 cents up to 5000km and 50 cents for any additional kilometres. The personal portion of automobile operating expense paid by employers remained at 24 cents per kilometre
We hope that you found this update helpful and beneficial. If you want to stay informed about “the need to know” for the government’s automobile limits and rates for businesses follow us at…
Follow us on twitter: @QuinoSolutions
Follow this blog. Updated weekly… at least
-Ashton Byrne, Marketing Coordinator
Note: The deduction limits and expense benefit rates above are taken directly from the Canadian Government’s website. If you need further clarification of any point above contact the government directly. http://www.fin.gc.ca/n08/08-114-eng.asp
A blog post from Quino Solutions’ old website… Worth reading
As a small business owner, reviewing costs and analyzing what is best for the company’s cash flow is at the forefront of my mind daily.
We recently hired a salesman for our company. We had never had anyone dedicated to sales before so the expenses arising were new to me.
I contacted our outside accountant and viewed the Revenue Canada website. I confirmed that the prescribed rate to reimburse an employee was 52 cents per km to cover gas, insurance and car payments etc. So I notified our salesman to keep track of his business km driven for business purposes using our “MileTracer” product. The system works beautifully. He checks his mileage report from our “MileTracer” product and reports it to me at the end of each month.
The other owner of the business reviewed the expense report and said that looks a little high to me, wouldn’t it be cheaper just to pay for a company car and pay the gas and insurance costs? Well, I had been paying about $200 a month to cover the mileage km driven. So I immediately began to create a cost benefit of the situation.
It would cost about $200 a month in car payments for a compact car. About $1,600 per year in insurance and on top of that about $100 a month is gas receipts. There is no mention in this scenario yet of car repairs and maintenance. It was clear that reimbursing by the km was a lot better for our small business as cash flow is king.
The only scenario is where a sales rep drives many km per week and is constantly on the road. If a sales rep averaged 200 km per day in driving. I had met one once who worked for McCain’s and drove constantly from one supermarket to another. They would average about 200 km (day) x .52 cents = $104 in mileage costs times around 22 days per month – this bill would be $2,288 monthly to the company. In an instance such as this with a salesman constantly on the road it definitely makes sense to foot the bill for the car payment and the insurance etc.
So, the results are if you have a salesman who just visits a few customers around town then definitely go with the mileage reimbursement based on km driven. If you do, however. have a salesman who is constantly on the road for days at a time it is definitely cheaper to go with paying for a company car.
- Natalie Pinter, VP Finance of Quino Solutions
Our software allows you to view details of the stops you have taken. You can see location, duration, average and maximum speed and time of stop.
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