How to Deduct Business Mileage

Most of the companies, private and government, provide their staff with some additional facilities including insurance cover, medical (for the employee and his/her immediate family), utilities and expenses for the vehicle while some employers also pay the expenses which are  incurred during a business trip only.

When an employee claims fuel and other (vehicle) expenses, the employers request you to provide the proof of all the incurred expenses and then pay you according to the standard mileage rate set by the company. If you are an employee in the United States of America, you need to visit this website to make an appeal for reimbursement from your employer – www.irs.gov

Instructions

  • 1

    Actual expense

    Visit the website and download IRS Form 1040, Schedule C and 1040 instructions.

    Collect your car shipment documents, which may include gas, oil, insurance, tires, maintenance and license plates. These receipts should include only the cost of the vehicle that has been used during a business tour.

    Combine the expenses to determine the amount of your deduction.

    Enter the sum in the row labeled "car and truck expenses" in the "Expenses" section of Schedule C.

  • 2

    Standard Mileage deduction

    Gather your records and combine all mileage used for business purposes.

    Refer to Form 1040 instructions to determine the standard mileage rate for the current tax year.

    Multiply the total mileage by the standard mileage rate. This is the amount of your deduction.

    Enter the total amount in the row labeled "car and truck expenses" in the "Expenses" section of Schedule C.

  • 3

    Unreimbursed costs of staff

    Gather your records for mileage and the amount of compensation from your employer.

    Divide the amount of compensation by the total number of miles to determine the recovery rate of your employer. If the reimbursement rate is less than the standard mileage rates IRS, you can take a deduction.

    Subtract your employer's reimbursement rate from the standard IRS mileage rate to determine your non-refundable rate.

    Multiply the total mileage on the non-refundable rate. This is the amount of your deduction.

    Enter this amount in the "unreimbursed employee expenses" in Appendix A.

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