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Level 1

Recording Mileage for both Business and Personal Use of Vehicle

I am new to recording mileage into QuickBooks. I currently track mileage by a spreadsheet. I would like to begin using QuickBooks to track mileage, however, I do not see how to record the mileage for the personal use of the vehicle. Would I create a customer, in my name and if so, can I pay the taxes on this fringe benefit through payroll by tieing the use of the vehicle into payroll?

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Best answer 03-21-2020

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Highlighted
Moderator

Recording Mileage for both Business and Personal Use of Vehicle

Thanks for reaching out to us here, DAN123.

 

I'd like to provide you insights on recording mileage for personal use in QuickBooks Desktop.

 

I've got two options on how to record this in the system. We can either use the class tracking feature or create a different expense account for it. Let's make sure to turn on the class tracking option in QBDT. Here's how:

  1. From the Edit menu, select Preferences.
  2. Select Accounting and go to the Company Preferences tab.
  3. Select the Use class tracking for transactions checkbox.
  4. Select OK.

To set up class:

  1. From the Lists menu, select Class Lists.
  2. Select New from the Class drop-down menu.
  3. Enter the class name and click OK.

To create a different expense account:

  1. From the Accountant menu, select Chart of Accounts.
  2. From the Account drop-down menu, select New.
  3. Select Expense and click Continue.

The instructions should allow you to track mileage for personal use.

 

Keep me posted if you need anything else.

View solution in original post

6 Comments
Highlighted
Moderator

Recording Mileage for both Business and Personal Use of Vehicle

Thanks for reaching out to us here, DAN123.

 

I'd like to provide you insights on recording mileage for personal use in QuickBooks Desktop.

 

I've got two options on how to record this in the system. We can either use the class tracking feature or create a different expense account for it. Let's make sure to turn on the class tracking option in QBDT. Here's how:

  1. From the Edit menu, select Preferences.
  2. Select Accounting and go to the Company Preferences tab.
  3. Select the Use class tracking for transactions checkbox.
  4. Select OK.

To set up class:

  1. From the Lists menu, select Class Lists.
  2. Select New from the Class drop-down menu.
  3. Enter the class name and click OK.

To create a different expense account:

  1. From the Accountant menu, select Chart of Accounts.
  2. From the Account drop-down menu, select New.
  3. Select Expense and click Continue.

The instructions should allow you to track mileage for personal use.

 

Keep me posted if you need anything else.

View solution in original post

Highlighted
Level 1

Recording Mileage for both Business and Personal Use of Vehicle

Thank you. I like the class tracking feature because I already use class tracking. However, will this allow me to track the vehicle use during payroll each period?

Highlighted
QuickBooks Team

Recording Mileage for both Business and Personal Use of Vehicle

You can track your mileage in QuickBooks Desktop, DAN123.

 

Entering your mileage allows you to account for the entire cost of owning and using your company vehicle including fuel, maintenance, and registration costs. By tracking your mileage, you can properly estimate the total cost for a job and bill your customers accordingly. I'll guide you in doing the whole process:

 

  1. Select the Company from the top menu bar.
  2. Choose Enter Vehicle Mileage
  3. Select the Vehicle List, then click New
  4. Enter a name for the vehicle (you can use the model, year of the car, license plate number or any other vehicle specific information). 
  5. Hit OK to add the vehicle.

 

Since you've mentioned that you want to the taxes of fringe benefit through payroll, We can either create taxable fringe benefits payroll items to handle that transaction. 

 

Here's how to set up a taxable fringe benefit payroll item:

  1. Select Lists from the top menu bar, then choose Payroll Item List.
  2. Click the Payroll Item button, then select New.
  3. Choose Custom Setup.
  4. Select either Company Contribution or Addition, and select Next.
    • Company Contribution: Adds the value of the fringe to be taxed but does not increase net pay
    • Addition: Adds the value of the fringe to be taxed and increases net pay
  5. Enter a name for this item, then click Next.
  6. Select an Expense account and Liability account from the drop-down lists, then hit Next.
  7. From the Tax Tracking Type drop-down list, select Fringe Benefits and select Next.
  8. Select Next twice (to bypass the Calculate based on quantity window).
  9. Enter that default rate in the first section of the Default rate and limit window if the benefit will be a specific amount.
  10. Enter the amount of any limits on the item in the second section of the window.
  11. Click Finish to complete the process.

If the amount will be included on a paycheck with regular wages to offset the taxes, we can enter the amount using the Fringe Benefit payroll item, under Other Payroll Items. We'll also have to take note that no other deductions should be added as the amount is not added to the net check, and only taxes are calculated.

 

If you reimburse the mileage, you can refer to this article in doing it: Create a non-taxable reimbursement payroll item.

 

Although, you can still use the class tracking to represent the vehicle or add a class for each vehicle but it won't be directly associated with tracking of your fringe benefits.

 

As always, we're open 24/7 to help you. You can always mentioned me in your post if you further assistance in managing your mileage and taxes.

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Level 1

Recording Mileage for both Business and Personal Use of Vehicle

Thank you for your feedback. I did create a fringe benefit as "Employee Use of Company Vehicle."  However, since 2019 is over, and I cannot create another paycheck, how can I include this on my W-2 for last year?  I would like this to be included in the 2019 taxes.

 

Highlighted
Level 1

Recording Mileage for both Business and Personal Use of Vehicle

I just realized that I have been confused. I am asking two questions. First, as you have answered, how to include "Employee use of the company vehicle" on the payroll, a taxable item.  Second, the unanswered question, how do I enter the use of the same vehicle on my 2019 W-2, the taxes of which have not been paid.??  And what calculation do I use to see what charges to apply to the W-2?

Thank you. 

Highlighted
Moderator

Recording Mileage for both Business and Personal Use of Vehicle

We'll have to submit an amended form of your W- for 2019, DAN123.

 

This is to include the fringe benefit item on the W-2 form when paying the 2019 taxes. 

 

If you don't have a corrected form yet, you can order one through QuickBooks.

 

Before doing so, we'll have to create a liability adjustment to correct your books. I'll show you how:

 

  1. Click the Employees menu.
  2. Select Payroll Taxes and Liabilities, and then Adjust Payroll Liabilities.
  3. Modify the Date.
  4. In the Adjustment is for field, select Employee.
  5. Select an employee.
  6. In the ITEM NAME column, select Fringe Benefit.
  7. Enter an AMOUNTWAGE BASE, and INCOME SUBJECT TO TAX.
  8. Select the Accounts Affected tab.
  9. Select Affect liability account and expense accounts.
  10. Click OK, and then OK.

 

Afterward, you'll have to manually file the amended form to the IRS.

 

You can also check these articles for more information about the supported pay types and deductions in QuickBooks:

 

 

I'm just a post away if my assistance is in need. Thank you  and stay safe!

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