Today TaxMama hears from Jerry in Abingdon, VA who tells us, “My wife is a sales rep. She is paid 20 cents per mile. She has driven over 1200 miles (we have documentation). What form do we use to claim the unpaid mileage vs the government’s 40.5 cents per mile? My wife does not own her own business nor is she an independent contractor.
Well Jerry,
You would use Form 2106 to report the total mileage at 40.5 cents per mile. On the form is a line to deduct the amount she has been reimbursed.
https://www.irs.gov/pub/irs-pdf/f2106.pdf
But I will tell you, this is a rip-off. You see, you can only deduct your job-related expenses if they are more than 2% of your Adjusted Gross Income (the last line on page 1 of your Form 1040).
And with your income added to your wife’s, and those few miles, she won’t be able to deduct anything.
So you have two choices –
1) Look for everything else she has spent on her job that has not been reimbursed—- appointment books, supplies, phone, fax, Internet usage, etc.
or
2) Ask her employer to join this century and pay her a reasonable reimbursement….
Or, there is ONE more option that might work for you. Some outside sales reps are considered statutory employees. There’s usually a box checked on the W-2 in this case.
https://www.irs.gov/charities/article/0,,id=131138,00.html
That means that, while they are paid with a payroll check, the tax code considers them to be independent contractors. If your wife qualifies for that definition, you may report her wages and the mileage reimbursements she has received on Schedule C. And you may deduct all the expenses and get the full benefit.
https://www.irs.gov/pub/irs-pdf/f1040sc.pdf
But this is tricky to report. Since the Schedule C will show a large profit, your tax software will try to compute self-employment taxes. Get Help if you do this.
But, unless your wife just started working for the company, I doubt she would qualify. She’d have a lot more mileage than 1200 for the year if she really fit the definition of an outside contractor.
And, remember, you’ll find answers about employee expenses and other tax issues, free. Where? Where else? At TaxMama.com
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- Ask TaxMama :: Where taxes are fun and answers are free
- IRS Form 2106 :: Employee Business Expenses
- IRS Schedule C :: Business Profit & Loss
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