Can a taxpayer deduct the difference between what her employer pays her @$.40/mile and the $.54 federal rate? She submits her mileage details to the employer and they verify/pay her from the report. I thought she would be able to, but after reading the rules and doing the Form 2106 I am doubting myself. Nothing is shown on her W2 concerning any reimbursements and nothing is added to her wages. No problem getting the total mileage on Form 2106. However, my problem is on item 7 concerning the any reimbursements. I am unable to enter anything in that area unless I override. The other question is that this would flow to Schedule A. If this is the only area she can take the deduction, she will be out of luck because she does not itemize (not even using this deduction). If she doesn't itemize can the amount be entered elsewhere? Thanks for your help!
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Yes. You enter her mileage; you enter her tax-free reimbursement. She can deduct the net as unreimbursed employee expenses subject to 2%.
No. If that doesn't benefit her, there is no other place to deduct in your scenario.
She can speak to her employer about changing his expense account policy to reimburse her for the government SMR or actual expenses. Deduction for the employer; not income to the employee. Happy employee, so everyone wins. -
Other than the additional cost to the employer, most likely the reason of only .40/mile. But yes, she is way ahead to get the money from the employer than the IRS.Originally posted by Lion View Post
ChrisComment
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Thank You!
Thanks for both of the responses. I must have done something wrong when I said I couldn't enter the reimbursement unless I overrode the Item 7. I was able to enter the reimbursement after all. So she will not be able to itemize, but at least I will be able to explain why she won't be able to get the difference. Thanks again!Comment
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Recruiting and training a new employee when she leaves her penny-pinching boss will cost him more than the few cents/mile he could add to reimbursing his current employee for her mileage. An unhappy employee can cost a lot.Comment
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Disagree
The incremental cost of driving a personal vehicle is far less than the IRS rate. If I drove 8 hours a day in my car, I would make a good deal of money. My total cost is around 34 cents, and my incremental cost around 23 cents. No need for companies to overpay for unnecessary costs for anything, and that includes mileage reimbursements. One of my clients has an accountable plan with an employee's manual that commits the company to 3/4 of the IRS rate. For 2017, this is 41 cents per mile.
Unless an employee is driving an Escalade in bad need of a tune-up, 41 cents should cover.Comment
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