Thursday, January 31, 2008

ASK THE TAX PRO – ONE MO’ TIME

I couldn’t help it. Despite the fact that this question arrived after I had announced in several posts that I would not be answering any more ASK THE TAX PRO questions until after the tax season, I have decided to answer this “quickie”.

Q. Background info - I am a "Pizza Delivery Driver"
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I have recorded 25,000+ miles worth of un-reimbursed mileage. If I file them with documentation on my tax return will I actually get a "Refund" or is it just a "Deduction"? From everything I've read, within the past 2 hours of searching online, I've read that it is just a deduction.
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How do I get that back from my employer then?

A. Of course all you get is a deduction! Do you expect the United States Government to reimburse you for your business miles?

However, a deduction may lead to an increased refund. In your case 25,000+ business miles (that’s a lot of pizzas) at 48.5 cents per mile for 2007 would result in a deduction of over $12,000. Unfortunately as, I assume, a W-2 employee you must itemize in order to claim the deduction, and then reduce it by 2% of your Adjusted Gross Income. So you will not get a tax benefit for the full $12,125.

If your employer has an accountable plan for reimbursing employee business expenses, including business use of a personal car, then you would have to submit your mileage on a regular basis (i.e. weekly or monthly) to your employer on whatever form the plan calls for. If your employer does not reimburse for mileage then you are stuck.

3 comments:

Vincent said...

Thanks much, and sorry bout not reading your other posts.

Anonymous said...

Here is one I bet you have not come across before. I misstated my dependent daughter's SSby one digit. I corrected it immediately by calling the IRS, but they had already cut my rebate check and excluded the $300 for my daughter. We got a rebate check for $1200 for my husband and me, but when I called about the $300 rebate for my daughter based on her corrected SS number, the IRS told me that I would not receive anything for her. Period. There might be some chance to capture this $300 on my 2008 return, but the agent I spoke with was not sure and had not idea how that would work. Did this really cost me $300?

Robert D Flach said...

Anon-

I am somewhat surprised that you will not be getting the $300.00 for your daughter (I assume she is under age 17) - since technically your original filing could not be processed without a correct Social Security number.

I did say somewhat - nothing at the IRS really surprises me anymore. And when it comes to the "stimulus" rebate it is anyone's guess.

If you do indeed qualify for the additional $300.00 for your daughter on your 2008 Form 1040 - that is she is under age 17 in 2008 as well - you will be able to get the $300.00 additional rebate then. It will be part of your 2008 refund, or it will reduce your 2008 balance due.

TWTP