The Tax Questions Blog

Posts Tagged ‘is mileage reimbursement taxable income’

Question: Is mileage rate reimbursement considered income?

I am being reimbursed at the Federal Mileage Rate of $.50 for the use of my personnel vehicle to conduct business for my employer. Is this reimbursement considered taxable income?

Answer: If your employer operates an accountable reimbursement plan then it is not taxable income and is not included in box 1 of Form W-2. If your employer does not operate an accountable plan then it will be included in box 1 of Form W-2 and is taxable income.

If it's an accountable plan and reimburses you less than the Federal mileage rate of 55 cents per mile you can take a deduction for the difference between what you are reimbursed and the Federal rate.

If it's not an accountable plan you may deduct the full 55 cents per mile since the amounts included in box 1 of Form W-2 are NOT considered a reimbursement.

Any deduction is reported on Form 2106. The total flows to Schedule A as a miscellaneous itemized deduction subject to a 2% AGI minimum. If your itemized deductions are not greater than your standard deduction you get no benefit from claiming the mileage.

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Question: My employer paid my tuition reimbursement in excess of $8950 which is all taxable income, what do I need to do?

My employer paid my tuition reimbursement in excess of $8950 which is ALL taxable(overage of the $5250 non taxable allotment). If I use Turbo Tax to do my own taxes, how do I guarantee that I will do this properly? Even though I never technically was given this money as extra income, can I still claim this as tuition I paid? I think it's called the Hope Credit.

Answer: The $5,250 that you were reimbursed by your employer for tuition and fees cannot be used to generate a tuition and fees deduction or lifetime learning credit.

You can take education tax benefits for any tuition and fees paid by your employer that are included in your W-2. This should be all amounts paid in excess of $5,250.

You can also take education tax benefits for tuition and feew you paid out of your own pocket.

You probably do not qualify for the HOPE credit because this requires you to be a full-time student and less then 2 years out of high school.

The lifetime learning credit is claimed on form 8863 and the tuition and fees deduction is claimed on form 8917. You can choose to take one of the other, but not both. If your income is too high, you will not qualify for the education benefits.

If you itemize your deductions, there may be some additional benefits.

Richard K
Master Tax Advisor
Enrolled Agent

This advice was based upon my understanding of the tax law in effect at the time it was written as it applies to the facts described by you.
See my profile for more information.

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The views and opinions are those of the authors and do not necessarily represent the views and opinions of KPMG Tax S.à r.l.. All information provided is of a general nature and is not intended to address the circumstances of any particular individual or entity.

Question: Is mileage rate reimbursement considered income?

I am being reimbursed at the Federal Mileage Rate of $.50 for the use of my personnel vehicle to conduct business for my employer. Is this reimbursement considered taxable income?

Answer: If your employer operates an accountable reimbursement plan then it is not taxable income and is not included in box 1 of Form W-2. If your employer does not operate an accountable plan then it will be included in box 1 of Form W-2 and is taxable income.

If it's an accountable plan and reimburses you less than the Federal mileage rate of 55 cents per mile you can take a deduction for the difference between what you are reimbursed and the Federal rate.

If it's not an accountable plan you may deduct the full 55 cents per mile since the amounts included in box 1 of Form W-2 are NOT considered a reimbursement.

Any deduction is reported on Form 2106. The total flows to Schedule A as a miscellaneous itemized deduction subject to a 2% AGI minimum. If your itemized deductions are not greater than your standard deduction you get no benefit from claiming the mileage.

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Question: Is this money that ATSI tried to keep from me taxable?

They told me to do something and agreed to pay me at my hourly rate. (I had been their employee.) They then reneged and refused to pay until I threatened to report them to the state. They then sent me the correct amount of money, but incorrectly listed it as a non-taxable expense reimbursement, rather than wages, and did not withhold taxes. Do I still report it on my 1040?

Answer: It's income and therefore is taxable.

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3 Income Types For Work and Travel