2021 fileing, where to enter Standard Mileage Deduction on 1065

[okron38]

Company books did not record any mileage entries for 2021 (no cash outlay).  However, on my 1065 tax return I am reporting in the Auto & Truck expense section a line for "Standard Mileage Deduction".   Consequently, this created a Reconciling item between Book and Tax records.  I don't see a clear spot where I should enter this difference on my tax return?  Thanks in advance for the help.

[AliciaP1 · Accepted solution]

This does not get reported as a reconciling item on your return.  Your books need to be updated for the deduction taken on the taxes.

The "Standard Mileage Deduction" would only work for a Partnership filing 1065 if it was reported as reimbursed to the partners.  If there was no cash outlay transaction on the books for this, then it runs through equity.  Entering the expense on the tax return forces the entry through retained earnings and therefore Equity.

On the books, you need to record a journal entry booking the mileage expense and split the equity portion to the partners' accounts by equity split percentages.

[okron38]

@AliciaP1 

Thank you for a thorough and succinct answer!!