my company pays me a car allowance every check, it is not taxed. my question is , can i still claim my business mileage when filing my taxes at the end of the year even though i receive this car allowance?
2007-01-25 10:04:26 · 6 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Since it is a reimbursed business, you cannot also take a deduction on the mileage. Your company is taking a deduction as a business expense. The government would be allowing a double counting of the deduction.
2007-01-25 10:43:06 · answer #1 · answered by gls_merch 5 · 1⤊ 0⤋
If your company pays you the IRS rate (44.5 cents per mile for 2006) the IRS considers it a wash. You don't need to keep any records and if you make a profit, you can keep it tax free.
If your employer pays you at any other rate, you must keep careful records of all of the vehicle use and costs and you must keep those records up to date at all times. You can then either take the actual costs, reduced by the amount your employer pays you or a flat mileage rate of 44.5 cents per mile, again reduced by the amount your employer pays you.
If you use the actual cost method, it's limited to the portion attributable to business use vs the total miles driven in the year. For example if you drive your car 20,000 miles and 10,000 of those are for business, you can deduct 1/2 of all costs. Again though, you must offset that with your employer's payments to you.
If you take the flat mileage rate, be sure you keep very accurate written use records and keep the up to date at all times. You can then deduct 44.5 cents for each business mile. Of course, that's reduced by the amount your employer pays you.
Once you've figured this all out, there's another gotcha. You must itemize deductions in order to claim it. If you don't have enough deductions to make itemizing worth while, just skip the whole thing as you won't get a deduction.
2007-01-25 10:22:12 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 0⤋
My understanding of this is you can claim every expense that you incur solely in the use of the car for your business ( less private mileage deduction ) but then you would have to deduct the non-taxable monies received from your company. But why is your car allowance not taxed at source?
2007-01-25 10:15:10 · answer #3 · answered by Anonymous · 0⤊ 1⤋
From what I understand...if your car allowance is included as income then you can claim the mileage. If your car allowance is tax free then you can not claim the mileage.
2015-01-14 03:44:46 · answer #4 · answered by Bruce 2 · 0⤊ 0⤋
quite to claiming the mileage allowance, why no longer declare the completed value of all expenditures incurred? you could also declare capital allowances on the motor vehicle at 25% pa. you should exercising consultation it is better, even though it will be well worth it, extraordinarily if the motor vehicle is a gas guzzler!
2016-10-16 02:45:27 · answer #5 · answered by chardip 4 · 0⤊ 0⤋
i wouldn't think can...you could phone the inland revenue or ask your local tax office, they will update you on that...plus, if your company pays that car allowance, isn't that for such things as 'business' miles etc?
2007-01-25 10:16:30 · answer #6 · answered by chrisbell3 3 · 0⤊ 1⤋