IRS Regulations for Employee Business Mileage Reimbursement

To write off work-related miles, you have to itemize your deductions.

To write off work-related miles, you have to itemize your deductions.

When you use your car for your job, the Internal Revenue Service may let you write off the business miles you drive. To qualify for the deduction, though, you need to follow their rules, which include keeping an accurate mileage log. You will also need to itemize your deductions on Schedule A.

Unreimbursed Employee Expenses

As long as you itemize your deductions on Schedule A, you can write off most of the expenses that you incur at your job that your employer doesn't reimburse. These expenses include everything from the costs of maintaining your uniform to the costs of entertaining clients to the costs of driving your car for work -- although you cannot deduct the cost of commuting.

Writing Off Mileage

To deduct your business miles, you need to maintain a log that substantiates them. IRS Publication 463 recommends that your log contain the date of the trip, the purpose of the trip, where you went, and your odometer readings at the beginning and end of the trip. Once you have logged all of your miles, you can write them off at the end of the year by multiplying them by a standard mileage rate that's published by the IRS, and that changes periodically. For example, in 2012, the rate was 55.5 cents per mile, but it increased to 56.5 cents per mile for 2013. If you had driven 9,100 business miles in 2012, you would have been able to claim a $5,051 write-off using the standard rate. When you claim the standard mileage rate, you can't claim your other car expenses, though. You just claim the flat rate per mile.

Income Limitation

The deduction for unreimbursed employee business expenses has one major limitation: You can only write off your miles, other employee expenses, and other miscellaneous deductions to the extent that they exceed 2 percent of your adjusted gross income. For example, if you have $5,051 in mileage, $3,500 in other unreimbursed employee expenses, and $350 in tax preparation fees, the total of your miscellaneous deductions would be $8,901. If you had a $90,000 adjusted gross income, you'd only be able to deduct $7,101 of those expenses, which is the amount that is more than 2 percent of your adjusted gross income.

Actual Expense Method

Instead of claiming the standard mileage rate, you can also write off your actual car expenses. To do this, you need to keep a log of everything you spend on your car, including gas, maintenance, insurance and tires. You can also depreciate your car's value. Once you've added up all of these expenses, you then multiply it by the percentage of the time that you drive your car for business. For example, if you drive 12,000 miles a year and 4,000 of them are business-related, you could write off 33.3 percent of your actual expenses.


About the Author

Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.

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