Deducting Auto Mileage for W2 Employee Who Has Received Employer Reimburesements

[Steve Stang]

Not Reported As Wages By Company

The big problem in this whole thing,

To me the big problem with this whole thing is just what mileage may be deductible. I am still of the opinion that his reimbursements from the Co. most probably should be reported as wages, as the reimbursements may very well not be for allowable deductible employee business expenses.

I am baffled by this 20 mile thing. And as to why or why not he should get any deduction for his mileage.

The company (Acosta) is not reporting this as wages. They require employees to use their own vehicle. They do not provide a flat reimbursement per month regardless of mileage. Their employee manual details that they are trying to cover fixed and variable expenses that an employee incurs. As such the reimbursement rates are tiered and the per mile rate drops as the mileage driven per month increases.

So I would consider this a legitimate expense incurred by the employee.

And in many ways this case seems to resemble the one outlined by Jiggers above. They expect the employee to drive to the customer's store location which means its more time efficient to go direct rather than go to the office and then likely have to backtrack.

In this employee's case, there is one office located 18.3 miles from his home (but I'm not sure if he's in that division). The other regional office is more than 40 miles away.

So as arbitrary as it may be, I can see why the employer has probably indicated that the first and last 20 miles is 'commuter' miles for their record-keeping.

But again, if the employee is incurring use of his vehicle for an average 30 cents per mile and the IRS rate is 56.5 cents then I can see why the employee should consider - at least a portion of this - as unreimbursed requiring a 2106.

[Burke]

I am baffled by this 20 mile thing. And as to why or why not he should get any deduction for his mileage.

You are getting hung up on a non-issue. It doesn't matter whether they exclude the first 20 or the first 100 miles. It's just their policy. The taxpayer has to base his deduction on the actual, legitimate mileage allowed under the Tax Code. If they reimburse him for any of it, that is deducted. This applies to the mileage reimbursement plan, as described, which apparently is not included on his W-2.

[ddoshan]

You are getting hung up on a non-issue. It doesn't matter whether they exclude the first 20 or the first 100 miles. It's just their policy. The taxpayer has to base his deduction on the actual, legitimate mileage allowed under the Tax Code. If they reimburse him for any of it, that is deducted. This applies to the mileage reimbursement plan, as described, which apparently is not included on his W-2.

I guess I am taking the position that his mileage may be non deductible employee business expense. Maybe it is legitimate transportation expenses. But if his mileage is indeed the same as commuting which it seems it could be ... then should not any reimbursement from his employer be included in his W-2. Would not his employers reimbursement then be considered from a non accountable plan.

I admit I am confused