I am an employee of a construction company. I use my personal pickup truck for work in lieu of using one of the company's trucks. I am paid a monthly truck rent, for which I am sent a 1099-MISC. The total truck rent paid for the year is in box 1 (rents) on the 1099-MISC. The company provides a credit card for fuel and reimburses for oil changes that I pay for out-of-pocket. Neither the provided fuel nor the reimbursed oil changes are reported on a 1099. Can I deduct my business miles to offset the tax? I have records for mileage and the dollar value of the fuel that was provided. Would it be appropriate to calculate the standard mileage deduction and then subtract the value of the provided fuel from that? If so, how do I do that in TurboTax? If not, what's my best option?
There's not an easy answer here. See reference below.
It depends on your "intent". If you have a profit motive, in renting them your truck, you may deduct your expenses. If you are doing it for your own convenience, your expenses are not deductible, and the amount on the 1099-Misc is taxable. If you do deduct expenses, be sure to deduct less than the total paid so that you show a profit.
Yes, I would deduct the standard mileage deduction and then subtract the value of the provided fuel and maintenance from that. But, you will find no IRS guidance on that. Mileage, from your home, to the first job site and mileage home from the last job site of the day are not deductible. That's considered commuting. If you go to the shop first, then to the job site, the mileage to the shop is not deductible.
If you're going to claim the deduction, Do not enter the 1099-Misc, at the 1099-Misc screen. Instead, enter at:
In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in Home & Business)
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Income from renting out personal property - click start and enter your income and expenses on the next screen. Note: do not enter more expenses than income. You are not allowed to claim a loss. Also note that you have to hand calculate your total expenses. You can't just enter mileage. The IRS rate for 2019 is $0.58 / mile.
The gross income will be included on line 8 of Schedule 1, and identified on the line to the left of line 8. The deduction will be sort of "hidden". It's included in the line 22 (of schedule 1) total with the code "PPR" to the left.
@mljohnson17 I may be able to offer you more detailed guidance that you may find helpful. Let be first clarify a few things, and then I need a bit more information from you.
The company provides a credit card for fuel
Since you don't pay for the fuel, you can not take the "per-mile" deduction. However, this "could" change, depending on how you are reimbursed for oil changes. If it doesn't change, then you "must" take the actual expenses deduction. TO take the per-mile deduction, you would have to include what the company pays for the fuel, as business income on SCH C. That means you'd need to keep a copy of "all" fuel receipts for the tax year. I doubt you did that for 2019. But let me know if you did.
and reimburses for oil changes that I pay for out-of-pocket.
How they treat the reimbursement really matters here big time. Are you reimbursed through an accountable plan? This is an employer plan where you provide the employer receipts after you have paid them, and the employer pays you for the totals on those receipts. No more. No less. The reimbursed expenses are "NOT" included as wages in box 1 of your W-2. (This is important!)
So based on your response to the above, we'll see if I can help you with a bit more detail (or not.)