In my company, we don't have allowance for car expenses. We get reimbursed if we use our own vehicle for work-related trips, based on the actual kilometers that we travelled.
Based on my understanding, when we get reimbursed based the actual kilometers, then the reimbursement would be non-taxable for the part below 78 cents/km and the part above 78 cents/km is taxable. My employer's accountant withheld tax for the part above 78 cents. He didn't withhold any tax for the part below 78 cents, which is correct.
However, when I lodge my last year's tax return, I found that both the taxable and non-taxable mileage reimbursements are included in my taxable income. In this case, I would have to pay tax for the whole mileage reimbursement that I received (including the part below 78 cents as this is considered as part of my taxable income at the moment).
In this case, what shall I do to fix that issue? Shall I add the mileage that I travelled and reimbursed by employer as a work-related deduction (car expense) to offset that part of tax? or shall I contact my employer's accountant to fix this issue from his end (i.e., ask him to remove the non-taxable part of mileage reimbursement from my reported taxable income)? or both ways would be ok to solve this issue?
Could someone please kindly advise me the right way to solve this issue?
16,185 views
19 replies