Mail Route

[Jesse]

Are mail carriers who use their own vehicles allowed a higher standard mileage rate?

[gtaylor]

Re: Mail Carriers

Mail carriers can not use the mileage deduction. They have to use form 2106 and deduct any expenses that were not reimbursed to them. That amount will be on their W2. Postal W2's are a bit different than regular W2's.

[Jesse]

Our local post office treats all "driving route" mail carriers as independent contractors. They must have their own vehicle and at year end are issued a 1099-MISC from the US Postal Service.

I thought there was a higher standard mileage rate for mail carriers? Or some special rules for mail carriers? I thought this was discussed at a seminar that I attended a few years ago, but I could be totally off base - or laws may have changed over the years.

[Gene V]

Rural Mail Carriers

I remember back in 1997 the Standard Mileage Rate for Business was 31.5 cents
And for Rural Mail Carrier was 47.25 cents

But I don’t think they have a standard mileage rate anymore for Rural Mail Carriers.

[Armando Beaujolais]

I remember back in 1997 the Standard Mileage Rate for Business was 31.5 cents
And for Rural Mail Carrier was 47.25 cents

But I don’t think they have a standard mileage rate anymore for Rural Mail Carriers.

Gene is correct. They repealed the increased deduction for rural mail carriers beginning with tax year 1998.

[Jesse]

Thanks for the help. I guess my seminar was more than a "few" years ago - my how time flys when your having fun! Thanks again!!!

[Bees Knees]

Code Section 162(o) has special rules for rural mail carriers. It basically says that amounts deductible by rural mail carriers for using their vehicles for business equals the amount reimbursed by the post office, and that this constitutes an accountable plan. Normally, under an accountable plan, the employee has to substantiate the business use and expense to the employer and then any reimbursements are tax free. If expenses are not accounted for, then the employee cannot exclude the reimbursement from income and has to take a deduction for actual expenses to offset the reimbursement income.

But for rural mail carriers, the code excuses that requirement by simply saying any qualified reimbursement is excluded from income. The reimbursement can actually be greater than actual expenses, and it would still be excluded as being a part of a qualified plan.

There is an exception for expenses that actually exceed the reimbursement. Under this case, Section 162(o)(2) says that if actual expenses exceed qualified reimbursements, the excess is deductible. So in this case, the rural mail carrier would have to keep track of actual expenses in order to claim a deduction in excess of reimbursements.

In 1997, Rev. Proc. 97-58 deleted the special mileage allowance for rural mail carriers. They use to have a mileage allowance 1.5 times the regular business standard mileage rate, but in 1997, their rate went back to the same as everyone else. Rural mail carriers can still use the standard mileage method to figure expenses, but they have to use the same rate as everyone else. And I believe that since the rate the post office generally reimburses at is greater than the standard mileage rate, then the only way for a mail carrier to claim expenses greater than reimbursements is to prove actual expenses exceed reimbursements.