We added some functionality to our product to help a customer with a recent IRS reality:
Personal usage of take-home vehicles is taxable as income.
Now it’s pretty easy to quantify just how much of that usage is taxable using GPS Insight.
We have a new way to choose which hours of the day for several reports, to include the drive time summary (down to 5 minute levels):
New Time Selection capability within GPS Insight Reports
So when you run a month-long report with the default (00:00 through 00:00), which is what we used to allow (just a full day, not just certain hours of the day), you would get this:
Run a GPS Insight Drive Time Summary for All of May
This shows 193,887 TOTAL miles
Now run it for JUST personal hours (this would vary based on your company’s schedule of course):
Choose your exact hours for the report
The options allow you to specify the time “band” (e.g. 7PM until 5AM in this case) as well as whether to include or exclude trips which happen only partially within that time. Also, you can apply this to EVERY day or just the start/ending days by clicking “Apply Each Day.”
We will soon have a 3rd “split trips” option which literally split activity in half at the exact time you specify — e.g. if you say 19:00 and a trip starts at 18:00 and ends at 21:00, it will only report 2, not 3 hours & the mileage of those 2 hours.
Additionally, there will be weekend support as well, which will help quantify personal usage (although we already do this in our odd-hours/weekends report.
Here is the result of that particular “personal hours” report:
Quickly determine how many miles need to be taxed
The personal usage miles, based on the 7PM-5AM filter are 29,074 for May, 15% of total miles driven.
A) you may want to curb this usage, since it’s costing your company money for fuel & wear and tear
B) you need to report this as income if it fits the IRS’s definition, and avoid putting your employees in a bad position of owing taxes if/when you/they are audited.
The IRS just announced an audit of all State of California take-home vehicles, reported by Government Fleet Magazine:
IRS is auditing California take home vehicle usage
Here is the link to that article.
Be prepared! Start quantifying your vehicle usage. Also, know that GPS Insight stores 3-5 years of your data, so an 18 month audit will take you no time at all to complete. Good luck with most other GPS providers which only give you 3-6 months of data. If you want that data, they will usually charge you thousands of dollars for archived data requests. Not us though…
Rob.
June 5th, 2010 4:02 pm
Hi Rob, this article really because it used to be one of my big selling points regarding the hidden values of 100% fleet tracking. The failure to report income received to employees is a big IRS “hot button” in the current business environment.
Based on what happened to a friend who runs a large, mainly cash business, the IRS seems to be focused more on the reporting than the actual money involved. My friend got audited and everything came out “good” except that he was paying a lot of independent sales people their commissions through a third-party payment agency. All the money transactions passed the audit just fine, but my friend’s company bore the responsibility of issuing 1099′s to these independent agents … and they never got issued.
Two million dollars later in fines and interest fees my friend’s business is now made whole again.
How many miles/dollars in reportable benefits each year go undocumented/unrecorded?