How do I claim mileage as a LLC Partnership business? I have a transport business I pay my drivers $.40/mile. How do I claim mileage on the tax return?

[Vanessa · Accepted solution]

If you have an LLC Partnership, any expenses you incur, including the $.40/mile will be included on the 1065 Partnership return.  

In order to file the Partnership return, you would need to use TurboTax Business.  

The mileage reimbursement will then be entered by:

1. Federal Taxes
2. Deductions
3. Scroll down to Compensation and Benefits
4. Click start next to Employee compensation and benefits

This reduction in income will be reflected on your K-1 that you will enter on your personal tax return. 

[yunggtp]

Who claims the remaining miles of $.135 (standard mileage - $.40)?  The employee or employer?  And where is it claimed at?  Does it conflict with the gas deduction/expense claimed by the employer.

[Vanessa]

If the employee was not reimbursed for the expense they will claim the remaining amount.  They would take it as a job expense subject to the 2% of AGI floor.  I am guessing you are talking about the gas deduction for your owned vehicles and not theirs.  If so, that would be something different.  One is an employee benefit, the other is your vehicle expense.

[yunggtp]

Thanks for your assistance Vanessa.  Yes I am referring to gas deduction for the company owned vehicle.  What if one of the employees is also the owner/partner.  Will the mileage reimbursement be treated different?