My partnership reimbursed mileage, where does this get expensed?

Question

I am a partner in a small private investigations company. Our business requires alot of driving and we (my partner and I) use our personal vehicles to do this. The partnership has reimbursed us for mileage driven and I want to know where to show this expense. Do we need to show this reimbursement as income and then show the mileage on a schedule C? Is there another way? Can this be entered into an expense line on the Form 1065? The majority of the mileage we are reimbursed for is a direct cost.

Thanks,
Cody

Answer 1

The re-imbursements are an expense to the partnership and should be shown as such in their books. So, they should simply flow through to the expense section of the 1065. The partnership does not have to make any special entries on the K-1 as the expense should already have been included on the 1065, along with the other business expenses.

If you are getting re-imbursed the IRS-approved mileage rate (44.5c for 2006) you need not complete any further paperwork. If not you should consider form 2106 to see if you need to declare any extra income or claim any deduction.

Answer 2

All you need is a sheet from each partner on mileage driven (the IRS requires odometer readings on a daily basis for an audit), and some kind of record showing miles x mileage rate. The documents should be kept with your other business expense files.

For the business, you'll just apply it to any account described as reimbursed employee expenses (not partnership draws). It will be included in the list of all other partnership expenses to arrive at partnership income. It's treated no differently than office supplies.

Answer 3

When a company reimburses an employee for an expense it shows in the General Ledger account as if the company directly made the purchase/expense. You do not show it as a "payout" or wage to yourself, just directly write the money off into an expense account.

In our company the expense account is called "Vehicles-mileage & gas".

Hope that helps.

Answer 4

you each and every and each acquire a ok(a million) of the earnings(or loss) which you record on Sch C with your 1040, in case you have costs that are no longer reimbursed they are able to be claimed on the C Sch E is apartment earnings(or royalty)and whether this LLC is a apartment, your ok(a million) is mentioned on your Sch C