While you might pay more at the pump if you live in California instead of Missouri, you’re going to get the same mileage deduction for business travel in both states. Here are the other key facts you should know about business travel deductions.
The standard mileage rate is the same nationally and the type, model or make of your car also don’t factor into the number. It’s available for both a car that you own and a car that you lease.
You can’t use the standard mileage allowance if the car is used for hire, such as a taxi, if you have five or more vehicles in use for business at the same time, such as a fleet operation, or if you have claimed a Section 179 expense deduction and/or any method of depreciation other than straight line on the car. If you claim the standard mileage allowance on a leased car you must use it for the entire term of the lease.
Regardless of whether you claim the standard mileage allowance or actual expenses, you must reduce your deduction by any reimbursement received from your employer under an “accountable” plan. If your employer reimburses you at a rate lower than the IRS allowance, say 30 cents per mile, you can deduct the difference. However, if your employer reimburses you at a rate higher than the IRS allowance, say 60 cents, you may have additional taxable income.
If your employer gives you a flat monthly car allowance, say $100 per month, which is included in the taxable wages reported on your Form W-2, you do not have to reduce your deduction by this amount.
— Robert D. Flach
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