Yosser

I started a new job in Sales last September, it was base pay plus commission.
Mileage was paid at .485 per mile. Any Clients taking to Lunch and Dinner etc was paid for with proof of receipt etc etc.

It was a rather tedious task keeping up with it all and having to send in an expense report every Friday, but when I got the check back it was all there.

Being that I am a rather truthful chap, it seemed some of the other Sales rep's were submitting Monthly expense reports of $1500 - $1800 per month. Mine on average topped out at $800 - $900. My boss decided in these shakey economic times to give all reps $1000 per month all in (not including Hotels if we were at of town, company paid for that).

This week I got my $500 expense but its lumped into my base+commission, so now I am paying tax??? How the hell does that work out at the end of the next tax year? do I keep receipts? bit of a pain in the ass really? anyone else in the same situation?

Michael

It sounds like the payroll department screwed up. They probably misunderstood management and started charging the expenses as pay.

Contact HR to determine what they are doing.

lisa67

Apparently they can tax you on certain "expenses". We were "lucky" enough to get some money from my OH's company to help us with selling our house in MI..this is seen as a "benefit" and therefore is being taxed. The usual expenses such as flying for business trips, hotel stays etc. are not to be taxed. Hope the helps

Yosser

Yeah, looks like a call to HR on Monday! My main expense is obvisouly gas (petrol) I do alot of miles every week (being that North Texas is rather large)..so I didn't think thats correct paying for Taxes at the gas pump and tax taken out of the lump sum of money....

Michael

Yes but you said that you were getting paid $0.485 per mile so I think federal law either allows car expenses or a flat fee ($0.485) but not both. If the company is willing to pay both the flat fee as well as the cost of gas, they would have to charge one or the other as income.

Vimto

according to the IRS web site:

For 2008, the standard mileage rate for the cost of operating your car for business use is:

50½ cents per mile for the period January 1 through June 30, 2008, and

58½ cents per mile for the period July 1 through December 31, 2008.

http://www.irs.gov/publications/p463...blink100033935

Starbucks66

I work in sales to. My expenses I claim back, gas, hotels etc. are untaxed on my pay check. Check with your HR.

Yosser

I didn't make myself clear, my bad...They have done away with the .485 and receipts for meals etc and given the reps a flat $500 per pay check. When I got my first check this month, it reads that I have had that $500 with tax deducted like its part of my wages.

I just don't know what do next year when filing my tax returns.
I will have to check with the HR.

Michael

Then if they are taxing that flat $500, that is part of your income. You will then file taxes either a flat amount driven per business per mile (amount varies per year) or you can keep all your receipts (including gas, depreciation, car maintenance, insurance, etc.) and file those as deductions at the end of the year (not sure if this is only the percentage used for work).

Also you will deduct any business meals or other business expenses.

http://www.essortment.com/family/tax...cting_slwe.htm

Yosser

Thank you for your help....mucho appreciated for that link.