Question:I work for a florist and often use my personal vehicle to deliver flowers for events like weddings, birthdays and funerals. The shop I work for reimburses my mileage at 45 cents per mile. Can I take a mileage deduction on top of my partial mileage reimbursement?

Stephen Fishman:You cannot deduct the 45 cents per mile that your employer reimburses you for your mileage. This deduction belongs to your employer, not you. You need not include the amount of these reimbursements in your income provided that you properly document your mileage for which you’re reimbursed.

The IRS does not mandate how much employers must reimburse their employees for their mileage, if they elect to do so. Such reimbursement can be full or partial, as calculated by using either the IRS standard mileage rate or a fixed and variable rate (an allowance combining a cents-per-mile rate with a flat amount).

The standard mileage rate for 2017 is 53.5 cents per mile. Thus, your reimbursement of 45 cents per mile is partial, not full. You may deduct the remaining 8.5 cents per mile as an unreimbursed employee business expense. 

However, this deduction is limited because it is a miscellaneous itemized deduction. You can deduct it only if you itemize your personal deductions on IRS Schedule A. If you do itemize, you may deduct your unreimbursed business mileage expenses only if, and to the extent, that they, along with your other miscellaneous itemized deductions (if any), exceed 2% of your adjusted gross income.

Miscellaneous itemized deductions include amounts you spent during the year for all your unreimbursed employee expenses (including business mileage), investment expenses, tax preparation fees, and hobby expenses (up to hobby income).

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Each week, our resident small business tax expert, Stephen Fishman, answers your small business tax questions. Have a tax question for Stephen? Submit it here.

Stephen Fishman

Stephen Fishman

Stephen Fishman is a self-employed tax expert and regular contributor to MileIQ. He has dedicated his career as an attorney and author to writing useful, authoritative and recognized guides on taxes and business law for entrepreneurs, independent contractors, freelancers and other self-employed people. He is the author of over 20 books and hundreds of articles, and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Visit Fishman Law and Tax Files for more information on his work.
Stephen Fishman