By Thomas Arrison, Certified Public Accountant
Thomas Arrison of Arrison & Olden
You’ve been out of work for months (maybe years) and you finally have found that job you so desperately sought.
It might not be perfect, but it’s a job and you can start paying your bills again. The problem is it is 100 miles and two hours away. So for now, 12 hours a day away from home is better than 12 hours on your computer looking for a job. Did I mention that you could actually start paying your bills?
There is a glitch. Do you know much it will cost you to drive that 200 miles a day?
The IRS says that the average car costs 50 cents a mile to run (gas, insurance, repairs etc). That would be $100 a day. That’s $500 per week— a number that is pretty accurate over a long period of time.
What will you spend out of pocket per week?
And who exactly has an “average car”?
Not too many people. If you drive a 15-mile per gallon SUV you will spend a lot more than if you drive one of the 50-mile per gallon hybrids.
- At $3 per gallon of gas, the SUV will cost $40 a day or $200 per week. You will probably have to stop everyday to fill it up.
- The hybrid would cost $12 a day or $60 per week.
It seems that the average mileage people get is between 25 and 30 miles per gallon. At 30 miles per gallon the out of pocket cost would be $20 per day or $100 per week.
Don’t forget that you will be putting more wear and tear on the vehicle and it will require more maintenance the further you have to drive it. At 200 miles per day you need to change your oil every 5 weeks (or 3 weeks if you change it every 3000 miles). A leased vehicle will run over your maximum annual miles quickly.
So a little analysis is necessary to make sure you are really earning more than minimum wage at this wonderful new opportunity.
About Thomas Arrison
Thomas has been a CPA for over 30 years. Since 1992 he has provided individual and business tax and accounting services at Arrison & Olden, PC in Littleton, MA. He also has his own blog, Thom’s Tax Talk, a compendium of tax tidbits and information
