[CAUT] mileage fees.

[Jeff Tanner]

On Jul 23, 2006, at 4:56 PM, Willem Blees wrote:

> Chris.
>
> You are right that I have a different perspective on building, and
> operating, my business. I'm not saying what you are doing is wrong,
> because obviously it works for you. But I have a different approach to
> dealing with my customers. Maybe the diffrence is an "East Coast"
> mentality as opposed to "Midwestern" approach to doing business, but I
> could never, in good concience, do what you are doing.
>
> Wim
>

Ah, mileage.  We FTE's don't get it, do we? (pun, um, intended?)

Current Federal deduction, I believe, is 44.5¢/mile and AAA recently  
calculated that Americans are spending an average of 55¢/mile on  
transportation.  You Joes who have a home office deduction get to  
deduct every inch you drive.  Some of you will have $20K to $30K in  
mileage deductions.  FTEs can only deduct mileage for outside jobs if  
they moonlight.  You wind up with a free vehicle and claim it as a  
cost of doing business.  We FTEs pay for that cost of doing business  
after taxes, and after other deductions many of you think are free to  
us.  Maybe that's why Wim and Chris have different perspectives.

Perspective:  When you're a 37.5 or 40 hour FTE tech at an  
institution, mileage takes on a different perspective.  If you're  
doing daily tunings after work, you're only going to get one in at  
best.  You've already got an hour and a half commute time per day to  
the school, and add that to a full day and you're already at 9.0 to  
9.5 hours for the day, so yes, Chris, we're working outside the 9 to  
5 time frame here.

(OK, those of you who are getting FTE pay for half time hours don't  
count -- you're doing that under the table and our bosses don't know  
that)

As far as I see it, the Income Tax deduction is a gift for business  
when you consider that I"m driving on my dime to work for $14/hour  
versus driving on a 44.5¢/mile deduction for $60(and up)/hour for the  
same skill.  Heck, I did over $18K in outside work last year and the  
government still owed me money in April.  My accountant projects I  
can make (gross) as much as $25K to $30K above my university salary  
before I'll start owing money, and I'm withholding as little as  
possible (not that I have that much energy, mind you).  At least the  
IRS understands CAUTs don't make enough to support a family on, but I  
digress.

That said, I usually charge a "round trip" fee based on one way  
mileage for folks more than 20 miles out of town (I'm happy with the  
deduction for anything inside of 20 miles - that's like getting to  
deduct my commute mileage).  They are living cheaper by being that  
far out and expect that some services might cost them more in  
return.  My mom was paying an old country tooner a hundred bucks to  
drive 45 miles (one way) to tune her piano in the economically and  
culturally barren bowels of South Georgia 25 years ago, and that was  
sharing mileage with at least two other jobs.  So, unlike some, I  
don't see that as punishment  I am occasionally asked if I've charged  
enough for driving so far out.  When I go out on Saturdays on distant  
drives, I charge a flat fee for the estimated round trip.  For  
example, I've been charging $60 to drive to Augusta (Georgia, where  
the Masters is played, which is about 60 miles down the interstate  
from my home) and divide that by the number of clients I am able to  
schedule.  In many cases, they're  winding up paying me less than  
some of the local dealerships there charge.  I can go gross up to  
$500 or more in a day, I'm happy with that, and the IRS gives me a  
deduction for 44.5¢/mile regardless of what I've charged the  
customer, and that's money I wouldn't get to keep working as an FTE  
for the University of South Carolina.  It's like an extra payday when  
I wind up with $4000 or $5000 worth of mileage come tax time, and  
that's just for part time mileage.  (Man, if we could only deduct  
commute mileage -- I mean, what's the difference?  the cost of going  
to work is the cost of going to work is it not?  Especially if you're  
earning 1/3 the money for doing it?)

I have one very special client who pays me $100 to drive the 90 plus  
miles one way to her house plus the tuning fee to tune her piano 4  
times a year.  As long as she's happy with that, I'm very happy.   
(She usually even tips me on top of that -- but she is one of a  
kind).  I usually wind up with at least $200 for about a 6 hour day  
in which I've tuned one very nice piano, and an $80+ IRS deduction  
toward my car payment to boot, and that is more than I can say for my  
university job.  (Give me 50 or so more like her and I'm outta here!)

Jeff



Jeff Tanner, RPT
University of South Carolina



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