How Do You Calculate Mileage for IRS Tax Reimbursement?


Quick Answer

To calculate mileage for IRS tax reimbursement, multiply the total amount of miles driven for business purposes by the IRS's current standard mileage rate, according to TurboTax. The mileage rate changes and varies according to the miles driven for business, for charitable organizations, and for either moving or medical purposes.

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Full Answer

Another method of calculating mileage for IRS tax reimbursement is to calculate the cost of using a vehicle for business purposes, notes the IRS. With this method, you must keep receipts for automobile licenses, depreciation, insurance, lease payments, registration fees, parking fees and all other related automobile expenses. The tax reimbursement is based only on money you spend for business purposes and not for personal purposes.

If your employer doesn't offer business mileage reimbursement, you are allowed to declare all of your business expenses on Schedule A when filing your taxes, states TurboTax. When using this method, you must lower your reported business expense by 2 percent of your adjusted gross income, as of 2015.

It's good to check into an employer mileage reimbursement or allowance plan to make sure it's efficient, recommends TurboTax. The IRS qualifies reimbursement and allowance plans as efficient as long as you have to report business automobile expenses and return any extra reimbursements within a reasonable amount of time.

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