Independent contractor and 1099 included mileage reimbursement

[Susanlph]

My 1099 included mileage reimbursement.  Should I be taxed on that?  Can I then take that off as a business expense to offset it?

[ee-ea]

Include it in income  and deduct as Car and Truck Expenses.

[AnnetteB6]

As mentioned by ee-ea, you would include the whole amount of income reported on the 1099 as business income and then claim the miles driven as a deduction to offset that portion of income.

While working on your Schedule C, look for the Business Vehicle Expense section to enter the details of the vehicle you drove for business purposes.  You will need the total number of miles driven for the year as well as the number of business miles you drove.  You will have a choice of claiming the standard mileage deduction or actual expenses.  Keep in mind that if this is the first year you have used your vehicle for business purposes, then choosing to use the standard mileage deduction will allow you to switch to the actual expense method in future years if it is more beneficial.  

After you have entered your business miles, then the income from the reimbursement should be wiped out by the deduction unless you were reimbursed at a rate higher than the IRS standard mileage rate (which would be unusual).

Take a look at the following TurboTax article to learn more about claiming vehicle expenses:

Business Use of Vehicles
 

@Susanlph 

[acls2x]

The company I contract with reimburses mileage at the IRS rate to contractors but does not report it as income. I should still be able to write off the property tax on my vehicle (based on percent business miles). The only way i can figure to enter this in turbo tax is to enter my business miles as business miles....then go tot he forms and manually switch it to deduct actual expense and enter only my property tax as an expense. this prevents turbo tax form deducting the mileage which was already reimbursed. Is this the best way to do it?

[KrisD15]

Since you are adding to a previous thread, your question may not be exactly the same as the original poster.

If you are Self-Employed and were "reimbursed" at the mileage rate for travel, but did not receive a tax document reporting that payment, you could handle it several different ways. 

The main bit of advice I have to offer is this- do it the same way year over year, the IRS likes consistency and your year-to-year comparison will be clearer.

If what you do works, do that. In TurboTax, if the vehicle is also available for personal use, you need to enter business/personal miles driven the year so that TurboTax knows the business percentage of use. This affects how much depreciation is claimed.

Although you don't get a 1099 for the mileage reimbursement, nothing stops you from reporting it as cash income on your Schedule C.

If you report the reimbursement as cash, you can deduct the expenses however way is more advantageous to you, Standard Miles or Actual Expenses. 

Technically, reimbursements are used for employers to employees and should have a written agreement in place. 

Report it any way that is easiest and also accurate.