Mileage Reimbursement taxable?

[Krazykraft]

I received a 1099 from a clinical trial I am in. I received mileage reimbursement and was taxed on it. I am not an employee nor a sub contractor. It was paid based on the IRS per mile rate.  Why was I taxed and is there a form to offset this?

[MinhT1]

Yes.

You are considered as self-employed and you can deduct as a business expense mileage using the standard mileage rate to offset the mileage paid to you.

[Krazykraft]

Thank you for your fast reply. I am confused though as I don’t have a business. I thought perhaps there might have been a simple form to use to “deduct” the mileage from being taxable from the full 1099 amount. I’ve never heard of an individual being taxed for a reimbursement when there is no business or employee-employer relationship.

[Vanessa A · Accepted solution]

Which type of 1099 did you receive? 1099-Misc?

If so, if this is just an occasional way you make money, it would not be considered self-employment.  It would be entered as other income.  But, this means you cannot deduct your mileage. 

If this is something you do regularly with the intent to earn money, then it would be considered self-employment and you would report it as self-employment income and then you could deduct your mileage. 

 To report this income select the following:

• Income 
• Scroll down and click Show More next to Other Common Income
• Click start next to 1099 Misc
• Enter your 1099 Misc
• After you enter the information click continue
• On the next screen select that you were in a research study and this was the payment and No you did not perform a service then click continue

Again, you will not be able to deduct the mileage, but you will not be subject to self-employment taxes, just normal income tax. 

[Krazykraft]

Thank you! It was a 1099-MISC form. It's an 18 month clinical trial and it is definitely not something I do on a regular basis so I will just have to pay the tax on it ... lesson learned!