![]() Mileage tracking refers to keeping a mileage log of miles driven for the purpose of tax deduction or reimbursement. For rideshare drivers, freelancers and anyone else filing 1099’s, you will need to keep track of your business mileage. Now, it’s time to talk about the self-employed mileage deduction. If you’re one of those employees that tends to drive frequently for your job, then the employee mileage reimbursement can result in significant savings. ![]() As we’ve talked about in a recent post, the standard mileage rate changes year to year and has increased along with the (generally) rising costs of insurance, registration fees, gas prices, etc. Without them, your employer may deny your claims, leaving you to foot the bill for all those miles driven for work-related meetings and trips.Īnother thing to note is that employers tend to reimburse employees at the federal standard mileage rate, which is set by the IRS. Keep in mind that thorough, clear records are critical to getting reimbursed. In your filings, include a mileage log, gas receipts and other permissible driving-related expenses. This is how employee mileage reimbursement works: To get reimbursed, you will need to provide your employer with an expense report, i.e., a detailed "daily log showing miles traveled, destination, and business purpose". ![]() This is a fancy term that basically says that when you drive your own vehicle for work related purposes, you can get refunded, or reimbursed, for miles accrued. For employees, specifically, these deductible costs come in the form of the employee mileage reimbursement. When we talk about mileage deductions or reimbursements, we are talking about what the IRS refers to as “the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes”. Now, it can get a bit more complicated than that, so today we’re going to talk about the difference between the employee mileage reimbursement vs. To put it simply, employees track their mileage to get reimbursed by their employers via an expense report, whereas independent contractors track miles to claim a tax deduction. However, there are some key differences between how self-employed folks and employees get to save money for miles driven. Whether you’re self-employed and drive your car to meet with clients or for Uber, or you’re a full-time employee who uses your personal car for work-related meetings outside of the office, the end result is the same: the expenses associated with driving for work don’t have to come out of your own pocket. If you drive a vehicle for business purposes, you’re likely aware of the fact that you can save money on job-related driving expenses.
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