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the_dala at 11:42am on 12/12/2013
the_dala at 11:42am on 12/12/2013Flist, I have a question for you because you are a multi-talented group of folks.
We have consultants who provide therapy services at clients' homes, so we reimburse for mileage at the federal rate. The way we've been doing this is to calculate the miles driven from the Office to Client and back (a round trip).
Our finance department is now saying that in order to follow IRS regulations and be able to reimburse mileage without making it taxable, we need to calculate this rate based on how close the Consultant lives to the Client - if they live closer to the client than they do to the office, that's what their mileage should be. Example: Consultant A lives 4 miles from Client A, so she should be reimbursed from Office --> Client's House --> Home. But since Consultant B lives 50 miles from Client A, she should be reimbursed from Office --> Client's House --> Back to Office.
Obviously we know our consultants aren't coming back to the office when their visits go from 4-6 pm or whenever. But I've always understood that you use the business address regardless. And I can't find anything online that covers this specific issue.
Bottom line, no one wants to be taxed on their mileage, so we'll do what we have to do. But making this change would be a real pain in the ass, since clients sign an agreement based on a monthly calendar detailing their visits (including the travel rates). Asking them to change it for some consultants but not others is going to be really confusing.
Any insight?
We have consultants who provide therapy services at clients' homes, so we reimburse for mileage at the federal rate. The way we've been doing this is to calculate the miles driven from the Office to Client and back (a round trip).
Our finance department is now saying that in order to follow IRS regulations and be able to reimburse mileage without making it taxable, we need to calculate this rate based on how close the Consultant lives to the Client - if they live closer to the client than they do to the office, that's what their mileage should be. Example: Consultant A lives 4 miles from Client A, so she should be reimbursed from Office --> Client's House --> Home. But since Consultant B lives 50 miles from Client A, she should be reimbursed from Office --> Client's House --> Back to Office.
Obviously we know our consultants aren't coming back to the office when their visits go from 4-6 pm or whenever. But I've always understood that you use the business address regardless. And I can't find anything online that covers this specific issue.
Bottom line, no one wants to be taxed on their mileage, so we'll do what we have to do. But making this change would be a real pain in the ass, since clients sign an agreement based on a monthly calendar detailing their visits (including the travel rates). Asking them to change it for some consultants but not others is going to be really confusing.
Any insight?
(no subject)
(no subject)
Basically, I was told by my accountant because D's office was my regular work base, I could not count driving there every day as self-employed mileage. However, if I was home on a day and I had to run an errand elsewhere for him, I could count that mileage. I was told it was similar to what an actual employee would be allowed to do (except that an actual employee is probably reimbursed by their employer for mileage, whereas I was not - I turned mine all in to the IRS at the end of the year).
Does that make sense, or answer your question at all?
P.S. However, when I drove to one of the newspapers or magazines for which I freelanced, I COULD count that mileage as work-related, since I worked out of my home for those jobs and not at any of their offices. Also, of course, I could count the miles I drove anywhere to work on a story from home, as mileage. (I don't know that you need any of that P.S., I just wanted to include it, LOL.)