ASK THE TAX PRO - FROM THE EMAIL BAG

I was surprised to get the following email question from a taxpayer -

“I read your article on MSN stating that you can no longer deduct mileage for business.  

I reached out to the IRS and according to the website you still can.

Please let me know.”

FYI, the item the writer was referring to was “10 things you can't deduct from your taxes anymore”.

My response -

“Employee business expenses, including business mileage by an employee, along with the other Miscellaneous Expenses that had been subject to the 2% of AGI limitation, are not deductible on Schedule A of Form 1040 for 2018 through 2025 as a result of the GOP Tax Act.

An employee who is not reimbursed for business mileage by his employer cannot deduct business mileage as a Miscellaneous Expense on Schedule A.

Self-employed taxpayers filing Schedule C or C-EZ can still deduct business mileage. 

Farmers filing Schedule F can still deduct business mileage. 

Landlords can still deduct business mileage related to rental properties on Schedule E. 

Employers can still reimburse employees for business mileage and claim a deduction on their business tax return.”

The bottom line – the deduction for using your car for business, whether you claim the Standard Mileage Allowance or the business use percentage of actual expenses, is still allowed as a business expense on business returns – Schedule C or C-EZ, Schedule E, Schedule F, Form 1120 and 1120-S, and Form 1065.  It is an ordinary and necessary expense of doing business. 

But employees can no longer deduct any unreimbursed business expenses on Schedule A.  This includes business mileage, union or professional dues, job-related education, tools and supplies, home-office expense, business use of a computer or cell-phone, etc, etc, etc.

Employee business expenses, and the other Miscellaneous itemized deductions that were temporarily done away with by the GOP Tax Act, including business mileage, are deductible on the 2017 Schedule A for those, like a couple of my clients, who have still not filed their 2017 Form 1040.

If an IRS employee is telling taxpayers anything otherwise then he or she is wrong.  I do believe that IRS employees, especially those who are answering questions from the public, have been trained in the new law.  I expect that the taxpayer probably did not ask the question of the IRS person correctly.

Are they any other aspects of the GOP Tax Act that you want clarified?

TTFN