How to Deduct a Gas Reimbursement From Standard Mileage

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Many people use their personal vehicles as part of their work, thereby incurring expenses which can be significant. The IRS allows taxpayers to take a standard mileage deduction for qualified business miles driven. You also might be able to deduct certain other mileage, such as driving as part of work for a charity (the rates might vary, however). If you receive a reimbursement for gas, this is tax deductible. However, you must subtract the gas reimbursement from the standard mileage allowance.

Keep a logbook of all miles driven. Record the starting and ending odometer readings for each trip along with the date and purpose of the trip. You also should keep all gas receipts plus receipts for any related expenses such as toll fees. This will allow you to document and deduct the full standard mileage allowance for any qualified mileage in which you're not reimbursed.

Determine the rate at which you were reimbursed for gas. This should be in the form of a set amount per mile driven (20 cents per mile, for instance). Look on the stub of your reimbursement check to find the rate paid. If it’s not stated, check with your payroll department.

Find the current rate for standard mileage for the category of driving involved. For example, the IRS allows 50 cents per mile as standard business mileage in 2010, down from 55 cents per mile in 2009. The IRS publishes the rates annually online.

Subtract the reimbursement rate from the standard mileage rate. For example, if you were reimbursed for gas at 20 cents per mile, and the standard rate is 50 cents per mile, you can deduct the gas mileage reimbursement plus 30 cents per mile.

File an itemized tax return (Form 1040, Schedule A or Form 1040 NR, Schedule A) to claim the standard mileage allowance you are entitled to. Complete IRS Form 2106 (Employee Business Expenses) to report your mileage and reimbursement. Enter the deduction amount from Form 2106 on line 21 (Schedule A Form 1040) or line 9 (Schedule A Form 1040 NR). Attach Form 2106 to your tax return.

Tips

  • You still can deduct the full standard mileage allowance for any mileage you were not reimbursed for.

References

About the Author

Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.

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