Tax Question with Mileage

dukebound85 · May 20, 2013

I had an interview with a company that entailed a 740mile round trip drive in my personal car. They had told me they would reimburse me for mileage. However, after the interview, in my emails thanking them for their time and what not, I had mentioned if there was a form I need to fill out or what not. They have not acknowledged this request on two occasions since then.

I feel that they are not professional with their dealings and feel I may just have to eat it.

With that said, I have emails that arranged this interview. Come tax season, would it be possible to deduct mileage spent to travel to interviews? Can I classify these trips as business expenses?

The only documentation I have is the emails setting the time, gas logs from gas cubby, and my reconstruction of the trips and logging them in trip cubby. Is this sufficient? Or can I not do this?

Thanks

Plutonius · May 21, 2013

http://www.ehow.com/info_12033025_tax-writeoffs-mileage-job-interviews.html

I'm not sure but I probably wouldn't have pressed them on it. A job is much more important then a small tax write off (if you even get one) and a company is less likely to hire you if you press something like this. At the very least for future interviews, don't ask until they give you a decision on the job

. Best of luck in the job hunt.

GoCubsGo · May 21, 2013

I seriously do not think you can get away with this but you should contact a tax professional. The deduction you will receive from a whopping 740 miles hardly seems worth the headache … and what not.

http://www.irs.gov/uac/IRS-Announces-2012-Standard-Mileage-Rates,-Most-Rates-Are-the-Same-as-in-July

Next time don't leave the interview without the form if it is that important to you. Sounds like a ****** company anyway.

SMDBill · May 21, 2013

It sounds like a great deal to take a deduction like that, but the math doesn't work out so well. But, I would definitely consult a professional to find out because unreimbursed expenses for work are deductible to some degree IF you itemize (Schedule A).

So 740 x $0.555 (mileage deduction from 2012: source IRS) = $410.70 additional deduction if you're permitted to take it. But in terms of the effect that deduction has, imagine your adjusted gross income is $50,000 and assume your itemized deductions were $10,000. The effect of adding $410.70 to your itemized deductions really lowers your taxable income by that amount. So if you're taxed on $40,000 minus your deductions (dependents), let's round again down to $30,000 for simplicity sake as your final taxable income (before adding the mileage deduction). Your final federal tax is $3,634 (married filing joint - assumed).

So what would it be with the mileage deduction? Final taxable amount of $29,589.30. Tax = $3,626.

That deduction would have saved you a whopping $8. Best bet is to get the company to live up to its obligations, especially if they told you in writing, and have them reimburse you. You're much better off with the cash than a tiny deduction.

http://www.irs.gov/pub/irs-pdf/i1040gi.pdf

GoCubsGo · May 21, 2013

SMDBill said:
It sounds like a great deal to take a deduction like that, but the math doesn't work out so well. But, I would definitely consult a professional to find out because unreimbursed expenses for work are deductible to some degree IF you itemize (Schedule A).

So 740 x $0.555 (mileage deduction from 2012: source IRS) = $410.70 additional deduction if you're permitted to take it. But in terms of the effect that deduction has, imagine your adjusted gross income is $50,000 and assume your itemized deductions were $10,000. The effect of adding $410.70 to your itemized deductions really lowers your taxable income by that amount. So if you're taxed on $40,000 minus your deductions (dependents), let's round again down to $30,000 for simplicity sake as your final taxable income (before adding the mileage deduction). Your final federal tax is $3,634 (married filing joint - assumed).

So what would it be with the mileage deduction? Final taxable amount of $29,589.30. Tax = $3,626.

That deduction would have saved you a whopping $8. Best bet is to get the company to live up to its obligations, especially if they told you in writing, and have them reimburse you. You're much better off with the cash than a tiny deduction.

http://www.irs.gov/pub/irs-pdf/i1040gi.pdf

Thanks for doing the math on that. Like I said, it doesn't seem worth the headache. Even still, I question whether he needs to be employed by the company or at the very least, fill out a W9 to receive the payment. Again, a hassle I'm personally not willing to go through but I'm lazy as all ****.

rdowns · May 21, 2013

These are not work related expenses, they are job search related expenses and may be tax deductible.

http://www.irs.gov/uac/Job-Search-Expenses-Can-be-Tax-Deductible

That said, unless you itemize and have significant deductions, it won't be worth it.

mobilehaathi · May 21, 2013

To be fair, that $400 probably bought upper management a halfway decent bottle of scotch.

Tomorrow · May 21, 2013

rdowns said:
That said, unless you itemize and have significant deductions, it won't be worth it.

(emphasis mine)

This is the crux of it, I think. I itemize on my return, and I'm able to claim any work-related or job search-related expenses, as long as I'm not reimbursed for them. But I think if you take the standard deduction, you're out of luck.

I went on an interview out of town once, drove my personal car, and was promised mileage reimbursement. I took another job. They only reimbursed me mileage for a one-way trip. Douches.

dukebound85 · May 21, 2013

jessica. said:
I seriously do not think you can get away with this but you should contact a tax professional. The deduction you will receive from a whopping 740 miles hardly seems worth the headache and what not.

http://www.irs.gov/uac/IRS-Announces-2012-Standard-Mileage-Rates,-Most-Rates-Are-the-Same-as-in-July

Next time don't leave the interview without the form if it is that important to you. Sounds like a ****** company anyway.

Yea, not that impressive of a company. Just rubbing me wrong when they tell me one thing and then it's like pulling teeth. A 6 hr drive one way is quite an interview trek. I have had companies fly me out and pay for rental vehicles and never an issue, nor did I ever have to bring it up. Speaks about the nature of the company.

I am thinking of sending an email to their accounts manager on Thursday or Friday if I don't hear anything. I don't think I will take the job if they offered me it at this point.

GoCubsGo · May 21, 2013

dukebound85 said:
Yea, not that impressive of a company. Just rubbing me wrong when they tell me one thing and then it's like pulling teeth. A 6 hr drive one way is quite an interview trek. I have had companies fly me out and pay for rental vehicles and never an issue, nor did I ever have to bring it up. Speaks about the nature of the company.

I am thinking of sending an email to their accounts manager on Thursday or Friday if I don't hear anything. I don't think I will take the job if they offered me it at this point.

You don't think you'll take the job? Unless that job is somehow going to boost your career and pay you more than you could normally make at this point, I would pass today. They don't seem like a company worth working for ... unless you're out of work, then any company is worth working for as long as you get paid.

dukebound85 · May 21, 2013

jessica. said:
You don't think you'll take the job? Unless that job is somehow going to boost your career and pay you more than you could normally make at this point, I would pass today. They don't seem like a company worth working for ... unless you're out of work, then any company is worth working for as long as you get paid.

Thanks for your insight Jessica. I am of your same mindset.

TedM · May 21, 2013

You should be able to deduct it from your taxes.

samiwas · May 23, 2013

dukebound85 said:
Yea, not that impressive of a company. Just rubbing me wrong when they tell me one thing and then it's like pulling teeth. A 6 hr drive one way is quite an interview trek. I have had companies fly me out and pay for rental vehicles and never an issue, nor did I ever have to bring it up. Speaks about the nature of the company.

This is what I think. If they promised you mileage (current rate is 56.5¢ per mile), that's $418.10. I don't know where you live or where they are located, but I can fly round trip almost anywhere for under $400. Why wouldn't they fly you? It sounds to me like they never intended to live up to this obligation, especially if they aren't answering emails.

I had a company last year who just wanted to meet me in case they wanted to use me for future projects. They paid for a flight from Atlanta to San Antonio, a hotel room in a nice hotel in downtown, most of my meals, and all of my expenses. And that wasn't even an interview per se. That shows me that a company is actually serious.

smithrh · May 23, 2013

Agreed with Samiwas.

If a company won't fly you, that's a pretty horrible sign right off the bat.

Bad enough that I would never interview with such a company, good economy or bad.

Think of it this way - if they're that cheap (or hard up for cash), how are they going to treat you once they have you working there?

Live and learn.

mobilehaathi · May 23, 2013

smithrh said:
Agreed with Samiwas.

If a company won't fly you, that's a pretty horrible sign right off the bat.

Bad enough that I would never interview with such a company, good economy or bad.

Think of it this way - if they're that cheap (or hard up for cash), how are they going to treat you once they have you working there?

Live and learn.

I don't necessarily disagree, but that is quite a luxurious attitude to take. There are plenty who wouldn't be able to (literally) afford it.

smithrh · May 23, 2013

mobilehaathi said:
I don't necessarily disagree, but that is quite a luxurious attitude to take. There are plenty who wouldn't be able to (literally) afford it.

Ignoring clear leading indicators isn't wise. It's hardly a luxury. If the OP were to have been called to relocate for this job, it really could have been a miserable experience, and an expensive one to boot.

mobilehaathi · May 23, 2013

smithrh said:
Ignoring clear leading indicators isn't wise. It's hardly a luxury. If the OP were to have been called to relocate for this job, it really could have been a miserable experience, and an expensive one to boot.

I suppose you missed my point. Some people can't afford to not consider a job even in the face of evidence that the employer would be a poor one.

smithrh · May 23, 2013

Ahh... yes.

I'd hardly call that luxurious though.

dukebound85 · May 23, 2013

samiwas said:
This is what I think. If they promised you mileage (current rate is 56.5¢ per mile), that's $418.10. I don't know where you live or where they are located, but I can fly round trip almost anywhere for under $400. Why wouldn't they fly you? It sounds to me like they never intended to live up to this obligation, especially if they aren't answering emails.

I had a company last year who just wanted to meet me in case they wanted to use me for future projects. They paid for a flight from Atlanta to San Antonio, a hotel room in a nice hotel in downtown, most of my meals, and all of my expenses. And that wasn't even an interview per se. That shows me that a company is actually serious.

The position is located in a rather small town if that means anything

I am just not used to this behavior in my brief expereince on the job hunt over two separate occasions (back in 2008 and now in 2013). I have been fortunate so far to have companies fly me out, pay for any expenses and a per diem, renatl cars, etc and never a hang up on that "obligation"

This is the first time I have had a bad experience with recruiting.

However, I did try one last attempt and they did respond saying sorry for not replying to it before but they will merely reimburse the gas costs my car endured.

Better than nothing I suppose...

MarkG21 · May 24, 2013

It does not look too promising that you can deduct your mileage.

First of all, milage is an employee business expense. You need to deduct job search expenses and that does not fall under employee business expenses.

Second, job search expenses favors people who already have jobs and are looking for new jobs while in the same field.

If your out of work it depends on how long you were out of work.

You really won't save much money in your taxes. Remember, it is a tax deduction NOT a tax credit. So lets say you spend $150 on gas. That 150 deduction is to your top income tax bracket. Lets say that is 20%. That is only $30 in tax savings before the 2% threshold.

If your single, you would need greater than $6200 in deductions to itemize.

Check out this link

http://www.sfgate.com/business/inve...o-Deduct-Your-Job-Search-Expenses-4413798.php

----------

samiwas said:
This is what I think. If they promised you mileage (current rate is 56.5¢ per mile), that's $418.10. I don't know where you live or where they are located, but I can fly round trip almost anywhere for under $400. Why wouldn't they fly you? It sounds to me like they never intended to live up to this obligation, especially if they aren't answering emails.

I had a company last year who just wanted to meet me in case they wanted to use me for future projects. They paid for a flight from Atlanta to San Antonio, a hotel room in a nice hotel in downtown, most of my meals, and all of my expenses. And that wasn't even an interview per se. That shows me that a company is actually serious.

That is the IRS mileage rate. Companies are under no obligation to reimburse employees that rate. They can reimburse employees what they want including no reimbursement to above the IRS rate. Anything above the IRS rate, employees would have to include that in income (the amount above 56.5) and anything below the rate' the employee can deduct on their returns net of what they were reimbursed.

turtle777 · May 24, 2013

I think it's deductible in the context of "job search" as long as it's in the field of your current occupation.

http://www.irs.gov/uac/Job-Search-Expenses-Can-be-Tax-Deductible

-t

samiwas · May 25, 2013

MarkG21 said:
That is the IRS mileage rate. Companies are under no obligation to reimburse employees that rate. They can reimburse employees what they want including no reimbursement to above the IRS rate. Anything above the IRS rate, employees would have to include that in income (the amount above 56.5) and anything below the rate' the employee can deduct on their returns net of what they were reimbursed.

True, but if a company told me ahead of time that they would reimburse based on mileage (which the OP seems to be saying), and didn't give me their number, I would expect the IRS rate. If they came back afterwards and and said "Oh, yeah...we only do 10¢ per mile", I'd have a problem with that.

On the other extreme, I remember when we tried to have a friend of one of our PAs run to a neighboring town to pick up an order for us. She demanded $500, expenses, gas reimbursement, AND mileage. We told her to F off.

Second, job search expenses favors people who already have jobs and are looking for new jobs while in the same field.

Is that hat the law is? That's pretty stupid. So someone who already has a job and an income can deduct their expenses in finding another one, but someone who is unemployed and has no income cannot? Seems very backwards (oh wait, it's tax law...duh).

dukebound85 said:
However, I did try one last attempt and they did respond saying sorry for not replying to it before but they will merely reimburse the gas costs my car endured.

Better than nothing I suppose...

Better than nothing, but pretty crappy after saying they would reimburse for mileage. Yeah, this doesn't sound like a company I'd want to work for.

I've worked on ending a relationship with a current client based on the same sorts of things. They just try every little thing they can to swindle another dollar out of implied agreements.

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