Employee Mileage

Today TaxMama hears from Frank in Arkansas who asks, “What is the IRS position on mileage for company errands that are not reimbursed?”

Dear Frank,

Actually, IRS has two perspectives on employee business mileage.

1) And you won’t like this one.
If your company has a reimbursement policy and you don’t get reimbursed because you simply fail to turn in your expense reports, or don’t turn them in on time, you’re out of luck.

You won’t get to deduct anything your company would have reimbursed.

2) And this is the one you really want, I’ll bet:
When your company either doesn’t reimburse you for your mileage, or limits your reimbursable mileage to a fixed number of miles each pay period, or reimburses you for less than the IRS mileage rate – you have a deduction. For 2007 the IRS rate is 48.5 cents per mile.

Use Form 2106 to report your mileage. If you’ve received any reimbursements for those same miles,
deduct the reimbursements on the designated line.

Incidentally, once you’ve entered your mileage on the form (total miles and business miles), go back and enter all your actual expenses.

Those will include insurance, gasoline, oil, repairs and service and depreciation.
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If your actual expenses are higher, it might be worth your while to use actual instead of the 48.
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5 cents.

There’s a chapter in IRS Publication 463 that specifically address vehicle expenses. It’s worth reading. https://www.irs.gov/publications/p463/ch04.html#d0e3114

And remember, you can find answers to all kinds of questions about employee business expenses and other tax issues, free. Where? Where else? At TaxMama.com

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