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Posted by Tiffany Gaskin

How Employees Can Claim Mileage Deductions if their Employers do not Reimburse

How Employees Can Claim Mileage Deductions if their Employers do not Reimburse

In many cases, reimbursement of mileage is not compulsory in the United States even though there is a yearly Standard Mileage Rate for employers and their workers categorized as follows:

  1. With this rate, employees get a rate to use when claiming mileage deduction for taxes. 

  2. Employers get the ideal reimbursement rate judging by the research

  3. The rate allows employers to know the kickback amount from employees, which will help in wage consideration. 

Using this rate, workers can get compensated through their boss or via a business deduction based on mileage on their taxes. There are free calculators online with which employees can deduce their mileage reimbursement, or by getting in touch with a tax professional such as TIFFANY GASKIN

The employer can decide to pay any mileage rate they chose except for people in California, which could be above or below the value set by Uncle Sam. If an employer gets a lesser amount, they can deduct what is left from their taxes.


Estimating Mileage Deductions 

For every mile that the employer did not entirely reimburse at the given rate specified by Uncle Sam, workers can deduct such. The itemizing deduction is essential for them to claim the deduction, or else such expenses will be classified as part of the taxpayer’s standard deduction. 

Also, the only condition in which mileage can be deducted is if it exceeds 2% of the taxpayer's Adjusted Gross Income.  (In other words, the Adjusted Gross Income is not up to the gross income). As a result, if your driving is not that excessive, you can request a reimbursement from your employer or get a new job. 

At the end of each year, there are three possible cases:

  • For a firm that does not reimburse mileage, the worker can make use of the full benefit.

  • The worker cannot deduct anything if the boss reimburses the entire mileage rate.

  • There is a possibility to deduct what is left should the employer reimburse below the mileage.

Claiming Mileage Deduction: How to 

You cannot just think of some random figures and assume it is your mileage deduction, and guessing is also not allowed. Also, it is not permitted to consult Google maps, find the route plied and multiply it by the number of drives made that specific year to estimate the deductions. Your numbers must be precise as this is what Uncle Sam expects of you. 

As a result, it is essential to have a log of your entire odometer readings for every trip that is work-related. Should there be an IRS audit, the agents will demand this document. You can do this in many ways:

  • Paper and pencil 

  • Smartphone app

Simply recording it the old fashion way by using paper and a pen is allowed. On the other hand, you can employ technology by downloading a smartphone app that will automatically track your mileage. There are many apps that can make this possible which are available for iPhones and Android device. 



Tiffany Gaskin
Contact Member