Mileage reimbursement

[oceanlovin'ea]

I guess I am just totally brain dead tonight.

Client had 1099-Misc from a transport company. They give rides to disabled people to doctor, etc. They are paid an amount for the trip and they turn in the mileage and they receive reimbursement for mileage too.

So if they received 40 cents a mile for mileage, they should be able to deduct the additional amount that would be allowed. Correct?

Or since it is included in income, can they take the total business miles as a deduction?

See what I mean?? That sounds so simple but my mind is bogged down in the quagmire and I am being swallowed up.

Linda, EA

[JohnH]

If the mileage reimbursement is included in the gross on the 1099-misc, then they can deduct the mileage at fhe full rate on the Schedule C. The net effect is that they are deducting the excess over the reimbursement.

[oceanlovin'ea]

Thanks John. I thought that sounded right but last night I wasn't sure of anything.

Linda.. EA

[FEDUKE404]

Check tax document first

I guess I am just totally brain dead tonight.

Client had 1099-Misc from a transport company. They give rides to disabled people to doctor, etc. They are paid an amount for the trip and they turn in the mileage and they receive reimbursement for mileage too.

So if they received 40 cents a mile for mileage, they should be able to deduct the additional amount that would be allowed. Correct?

Or since it is included in income, can they take the total business miles as a deduction?

See what I mean?? That sounds so simple but my mind is bogged down in the quagmire and I am being swallowed up.

Linda, EA

If I understand your question, two things are occurring. The client receives a fee for the trip and a separate reimbursement at 40¢/mile.

I agree client could deduct mileage, assuming both types of payments are included on the Form 1099-MISC, under the usual guidelines for Sch C. We will assume client has adequate records.

If both types of income are included on the tax document, then client can deduct mileage expenses at the full rate. OTOH, if he is merely being "reimbursed" for travel (your words) and same is not included in the Form 1099-MISC, then the only thing left to claim is the difference between the allowable rates and the amount reimbursed. (Actually you calculate the full amount and then show a line item reduction for the "reimbursements.")

Sorry for the confusion on my part - I don't think the morning coffee has kicked in yet.

FE

[oceanlovin'ea]

I think they turn in the miles for the trip. They are also paid an fee for the trip and then an amount for the miles. So the 1099-misc includes all that they are paid.

I am sure they have accurate records for this....probably the check stubs themselves would have the breakdown.

Linda, EA