buy EE's cars?
System
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We have 4 regional managers who travel the state on Montana putting much wear and tear on their own auto. Currently we reimbuse miliage. Traveling managers understandably want more. Does anyone have any benefits in place for manager's who travel extensively? Do we give them a stipend for car maintenance? Do we own cars that they use for travel?
Comments
you don't own the car unless its titled to the company, but you could still be liable for accidents among other issues. we had different levels of vehicles for different levels of managers. you may want to consider leasing autos for these guys in the company name. Liability insurance would be corporate responsiblity, leasing company covers collision (in a lot of cases). ee's would be taxed at end of year for personal miles used (personal use of a business vehicle).. but the lease cost and upkeep may be less than paying out the mileage charge or buying the car and then unloading it. Depending on where the cars are leased, (there was a company out of Chicago called "Four Wheels Leasing" - but I don't know if they are still in business), most have maintenance schedules that need to be followed and at end of lease there's the option to return the cars and pay a small fee on excess miles or the driver can buy outright. there are many options, but company would have to look at economics and liability, among other issues. etc.
Employees who go for big SUV's will end up spending more than the reimbursement amount. Employees who go for compact cars will spend less and be ahead financially. That is their choice, not yours.
We have 2 employees who are on the road alot. All they get is the IRS rate (and my ear when gas prices are going up).
If your company wants to do more, then you can lease autos for these employees as suggested by another poster. Just remember that if they use the cars for their own personal use too, that the value (IRS mileage reimbursement rate) of those personal miles is taxable income and you will need to add it to their W2's.
We used leased autos for awhile. The employees were very unhappy when we got to year end and had they had to come up with the FICA taxes on the personal mileage. That's why we switched back to the IRS rate. For us, it runs alot smoother this way.
Good luck!
Nae