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Dave15
New Member

I receive a $4,200 annual car allowance that is taxable. Can I claim a mileage tax deduction for the excess miles over the $7,777? ($4,200/$0.54=$7,777.00)

 
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Opus 17
Level 15

I receive a $4,200 annual car allowance that is taxable. Can I claim a mileage tax deduction for the excess miles over the $7,777? ($4,200/$0.54=$7,777.00)

If the car allowance is taxable, then you can deduct ALL of your business mileage, not just the mileage that is in excess of the value of the allowance.  

You only need to reduce your business mileage deduction by the value of any untaxed reimbursement.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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6 Replies
SweetieJean
Level 15

I receive a $4,200 annual car allowance that is taxable. Can I claim a mileage tax deduction for the excess miles over the $7,777? ($4,200/$0.54=$7,777.00)

That's 7777 miles, not $7777.  Did you drive more than that for business?
Carl
Level 15

I receive a $4,200 annual car allowance that is taxable. Can I claim a mileage tax deduction for the excess miles over the $7,777? ($4,200/$0.54=$7,777.00)

You can only claim mileage that was driven specifically and explicitly for job related purposes only. If the vehicle you're claiming it on is a lease, then it gets a bit more complicated.
Opus 17
Level 15

I receive a $4,200 annual car allowance that is taxable. Can I claim a mileage tax deduction for the excess miles over the $7,777? ($4,200/$0.54=$7,777.00)

If the car allowance is taxable, then you can deduct ALL of your business mileage, not just the mileage that is in excess of the value of the allowance.  

You only need to reduce your business mileage deduction by the value of any untaxed reimbursement.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

rjs
Level 15
Level 15

I receive a $4,200 annual car allowance that is taxable. Can I claim a mileage tax deduction for the excess miles over the $7,777? ($4,200/$0.54=$7,777.00)

Opus 17 is correct. I revised my answer to reflect the fact that the reimbursement is taxable. The other points in my answer are correct.
rjs
Level 15
Level 15

I receive a $4,200 annual car allowance that is taxable. Can I claim a mileage tax deduction for the excess miles over the $7,777? ($4,200/$0.54=$7,777.00)

EDIT - CORRECTED ANSWER

As Opus 17 correctly pointed out, since your reimbursement is taxable you can claim a deduction for all your business mileage. You have to have a log of your business mileage. Note that commuting, i.e. any trip from or to your home, is not business mileage and is not deductible.

Enter your total business mileage in TurboTax. When it asks you if you received any reimbursements, you can answer No because the reimbursement is taxable. (The reimbursement should be included in the wages in box 1 of your W-2).

When you posted your question you indicated that you are using TurboTax Free Edition. You cannot deduct mileage in Free Edition. You would have to upgrade to Deluxe, which is not free.

Job-related business mileage is a miscellaneous itemized deduction subject to the 2% of AGI limitation. That means that 2% of your Adjusted Gross Income (AGI) is subtracted from your total miscellaneous itemized deductions. Only what remains is deductible. In addition, your total itemized deductions must be more than your standard deduction for the itemized deductions to give you any tax benefit.

kmcclune
Returning Member

I receive a $4,200 annual car allowance that is taxable. Can I claim a mileage tax deduction for the excess miles over the $7,777? ($4,200/$0.54=$7,777.00)

But didn't that Misc 2% AGI limitation get taken away 2018-2025 due to the TCJA of 217?

 

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