Where do I enter mileage reimbursement payments as income or reduction in auto expenses?

[MichaelMc · Accepted solution]

It is not entirely clear if you are asking this question from the business or personal perspective.

On the business side, the net result will be the same, so it is largely a matter of personal preference. I like to see the actual net amount of a business's expenses, so I credit reimbursements back to the expense accounts. It is also perfectly valid to create an income account titled Reimbursed Expenses, leave the gross amount spent on expense items untouched and book all reimbursements as income.

On the personal side, ideally the business operates an accountable plan under which receipts (or a mileage report) are required to be turned in for all allowable expenses, or excess travel advances are returned with the associated expense report. In that case, the mileage reimbursement is not taxable income to the individual.

[hortman48]

This is for a trade association management company, working for various associations, as a 1099 contractor. The associations reimburse mileage at the IRS rate. My management company deducts auto expenses on a Schedule C. Is the reimbursement considered income?

[MichaelMc]

Yes, in those circumstances, and with the management company already booking the expenses, the reimbursement would be income.