Comparing Home Purchase / Loan Scenarios

[qwerty]

when i was at the big 4 i did get reimbursed for mileage in excess of my normal commute to the office. that is pretty much standard business practice all over the place.  i guess you guys view this as a car allowance but they are just reimbursing for your wear and tear and gas on your car for making you drive above and beyond what you normally would to your home office.  we got reimbursed for cell phones as well. any parking outside of your home office was reimbursed.  we paid for team lunches on the firm/client, etc.  if we worked more than 10 hours a day we would get free dinners, at some clients, depending on the budget we would buy dinners regardless. 

i guess you guys have a much wider view of a car allowance than i do.  to me a car allowance is what goes on your w-2 as income, otherwise you are just get reimbursed for your expenses.

Operating/owning a car is mix of fixed and variable expenses. When you're paid a mileage-based reimbursement, it's all variable. After a few hundred bucks, it's a perk. Either way, it's an offset.

By the way, would love to see your comparison template ....

my model is very similar to yours. the main difference is i just start with my net paycheck and apply my top marginal tax rate (fed and state combined, this year turned out to be 42% vs the 37% i budgeted) to the interest deduction. for the property tax i only apply the state marginal rate as we dont get a deduction for federal purposes. your model starts out with your gross and applies one rate to arrive at your net paycheck and i believe uses the same rate to calculate the tax benefit, which could be a little less accurate (going off memory here). Your net paycheck is a blended rate where as deduction uses the top marginal rate (assuming you have enough income to absorb the deduction).  to increase my withholding based on the calculated tax benefit (37% x total interest that i was going to pay in 2013) i just went to payroll and said how many withholdings do i need to increase so i dont prepay the government a bunch of money, they bust out their payroll calculator and told me i needed to increase my withholding by 8).

otherwise the models are almost identical, except my dog expenses are much much more

 

[qwerty]

But either way - it decreases your monthly car expenditures which was the original point made by someone.  So yea - $300 per month for car on $250k salary is doable and realistic.

i dont disagree. it was just how we viewed the definition of car allowance. i view it as a w2 event, you guys view as a w2 event or reimbursements. remember im a cpa so when i hear car allowance, i hear income (typically grossed up), not reimbursements.

 

[bones]

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[usctrojancpa]

In my 4+ years of audit, I only saw two people have car allowances of the companies that I audited (both public and private).  I only know the local auto companies provide a car allowance (toyota, honda, mazda, kia, and hyundai).  That's not to say there aren't other companies that do provide it, but I think it's not the norm and more the exception to the rule. 

 

[OpenSky]

8)

 

[OpenSky]

8)

 

[qwerty]

Rather than describe it, why not share for the group's benefit?

there are plenty of smart people here that im sure have their own templates, pretty straight forward.  dont really feel like going through and sanitizing it and also, not sure how to put the excel template up like you did.

 

[usctrojancpa]

In my 4+ years of audit, I only saw two people have car allowances of the companies that I audited (both public and private).  I only know the local auto companies provide a car allowance (toyota, honda, mazda, kia, and hyundai).  That's not to say there aren't other companies that do provide it, but I think it's not the norm and more the exception to the rule.

did you have a mileage reimbursement?

Yeah, mileage reimbursements at the IRS $/mile are very common....I used to get them when I worked in commercial lending in my former life.

 

[OpenSky]

 

[qwerty]

In my 4+ years of audit, I only saw two people have car allowances of the companies that I audited (both public and private).  I only know the local auto companies provide a car allowance (toyota, honda, mazda, kia, and hyundai).  That's not to say there aren't other companies that do provide it, but I think it's not the norm and more the exception to the rule.

did you have a mileage reimbursement?

Yeah, mileage reimbursements at the IRS $/mile are very common....I used to get them when I worked in commercial lending in my former life.

Ahh, so you were the exception as well. Along with the four companies I worked for (and their employees), qwerty and his firm, my brother's big four firm, etc.

Lots of exceptions out there.

Hell, the IRS has specific guidance on auto allowances and even sets a rate for mileage reimbursement.

But yeah, it's a corner case.... right ?!  ???

everyone one acknowledges that mileage reimbursements can create additional money in your pocket, no one is disputing that. both USC and I have mentioned that is common practice.  keep in mind we were disputing "car allowance," car allowance does not equal mileage reimbursment. mileage reimbursement is just that, pays you for the use of your car (depreciation/gas) at IRS determined rates. 

if your statement is that every/most company offers mileage reimbursement and an employee likely benefits from it, yes i would agree with that. if your statement is that every/most company offers a car allowance (which shows up on your w2) then that is the statement that i believe is not accurate.

while you may pocket some extra cash up front, you will end up with 100K miles on your car in three years. so you end up buying a new car faster, so do you really benefit?

 

[OpenSky]

 

[qwerty]

opensky - so do you submit an expense report for mileage?

 

[OpenSky]

:

 

[Leano]

Wow. It's nice to know i have fellow -auditors here. I was in public accounting for 8+ years. I must say, it's nice to be home relaxing at this time of day during this time of year.

 

[qwerty]

Wow. It's nice to know i have fellow -auditors here. I was in public accounting for 8+ years. I must say, it's nice to be home relaxing at this time of day during this time of year.

you got that right. we just wrapped up our quarterly review last week. i left at 5pm the auditors stayed till 9pm. suckers.