- Typically, an employee who travels on behalf of his employer using his own vehicle receives reimbursement for the miles it takes for him to get to and from company business. For example, a salesman using his own car receives reimbursement for the mileage he puts on his car, calculated as the round trip miles multiplied by a mileage rate.
- The IRS establishes mileage rates individuals and businesses use to calculate deductible mileage rates each year. In 2011, the standard mileage rate for business miles driven is 51 cents per mile, 19 cents per mile for medical and moving purposes and 14 cents per mile driven for charitable organizations. Generally, a taxpayer deducts his mileage rate from his taxable income when reporting his taxes.
- If you run your own business, you cannot use the business standard mileage rate if you use the Modified Accelerated Cost Recovery System (MACRS). You cannot use the business standard mileage rate if you plan to claim a Section 179 deduction for your vehicle which means your vehicle is a heavy non-SUV vehicle, seats nine people or more, or has a fully-enclosed driver's compartment or cargo area. Additionally, if you use your vehicle as a taxicab or if you own more than four vehicles owned or leased and used simultaneously, you cannot claim the business standard mileage rate.
- If traveling for your company entitles you to mileage reimbursement, maintain accurate mileage documentation. Keep copies for yourself and one for your employer. For its part, your employer needs to not only verify your claim for reimbursement for accuracy but must also record this expense for tax reporting purposes.
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