Mileage for Company Car

[Dave T]

Tax payer  is part of a MLM ( alternative energy provider ) As a result of meeting sales goals they were awarded the use of a car for a year.

They diligently recorded business and personal use which they reported to the MLM and the personal component was added to their income for the year.

She provided me with a log of business miles  but it seems that would be double dipping to take this as a deduction or am I missing something.

Thank you.

Dave T

 

 

[Gail in Virginia]

Was it an alternative fuel car?  Did she have to buy gas for the car?  Is she a statutory employee, or self-employed?  It sounds like she is an employee, and there is no longer a place for employees to deduct business mileage.  If she is self-employed, how did they add the personal use to her income?  If she had to pay for gas and insurance, and they just provided the car, and she is self-employed, then she might could take the non-depreciation portion of the business miles.  But if the car was total free to use and she had no costs, what is she deducting? 

Sorry, but I have more questions than answer on this one.

[Dave T]

She is self employed. and receives a 1099 Misc. Non- Employee Compensation.  It was not an alternative fuel car.

She provides them the mileage, both business and personal and they compute the income portion.

Aside from the gas, all other expenses are paid by the MLM.  

 

 

[Lee B]

Gotta love the MLMs, they have most creative interpretations of tax law.

[Gail in Virginia]

So if she has the business miles, and knows what miles per gallon the car gets for gas, and the average price per gallon she paid for gas, maybe she could take some business expense for the car.  But not as much as she probably thinks it should be.....

[Dave T]

Gail - that was my thinking as well.

Thank you

[Max W]

Tax payer can take the biz mileage allowance $0.58 minus the depreciation portion $0.26 = 32 cts/mile.

[Gail in Virginia]

12 hours ago, Max W said:

Tax payer can take the biz mileage allowance $0.58 minus the depreciation portion $0.26 = 32 cts/mile.

I thought that this was supposed cover everything - insurance, repairs, oil changes, etc. According to the OP, the TP only pays for gas, not the other costs of owning a vehicle.  So I am not sure they could take mileage, even without the depreciation component.  Not sure they can't.....  I have not had this particular situation. 

[jklcpa]

Mileage allowance can't be used for a car that isn't owned by the taxpayer.

I'd follow the rules laid out for employer-provided car where only the value of personal use is included in compensation, not the full value of the automobile. This means that the only expense that would be deductible would be the portion of expenses paid by the taxpayer that relates to the business use.  I think the only deduction here is a percentage of the gas cost. 

[Max W]

I misstated my previous post.  I was thinking of a client I had several years ago and did not remember the details correctly.  He was self-employed and used his own pick-up to make deliveries for a wholesaler.  The company gave him a gas card and instead of taking the full mileage, we only took the depreciation portion.