Is Mileage Considered an Office Expense?

Mileage isn’t usually considered an office expense, but it can still be tax deductible. Here’s what you should know to take advantage of these deductions.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

Office Expenses

When people talk about office expenses, they usually mean one of two things.

The Cost of Your Office

The cost of your office itself is usually a deductible expense. The cost can include things like rent and utilities.

If you work from home, you may be eligible to take the home office deduction.

Office Supplies

Office supplies are also usually a deductible expense. Office supplies include things like paper, pens, and staples.

You don’t need to worry about what is and isn’t an office supply. If it’s something you use in your office as part of your ordinary and necessary business, you can usually deduct it. Office supplies is more of a general description than a technical term that lets you deduct something or get a bigger deduction.

Mileage

Mileage is not an office expense because it’s not related to your office. Business mileage is still usually deductible.

Types of Mileage

There are three main types of mileage that relate to business.

  • Commuting is when you drive to and from home. This is generally not deductible.
  • Local travel is when you drive around to different clients or job locations inside of your home area. This is usually deductible.
  • Business travel is when you take a business trip to another city or some other far away location. This is usually deductible.

I’m using local and business travel to describe two different types of travel you might do, but they really fall under a single mileage deduction.

Deducting Mileage as an Independent Contractor

If you’re an independent contractor, you’ll usually want to take the standard mileage deduction. The standard mileage deduction gives you an easy way to track your mileage deduction and also usually results in a bigger deduction compared to tracking your actual expenses.

To deduct your mileage, you’ll need to:

You’ll get a deduction equal to your total business miles times the current IRS standard mileage rate.

  • 2022 (Miles for July through December): 62.5 cents per mile
  • 2022 (Miles for January through June): 58.5 cents per mile
  • 2021: 56 cents per mile
  • 2020: 57.5 cents per mile

Deducting Mileage as an Employee

If you’re an employee, you can’t take a deduction for mileage. Your employer can offer you a tax-free reimbursement.

For a mileage reimbursement to not be taxable income, your employer needs to:

  • Have you submit your mileage
  • Pay no more than the IRS standard mileage rate
  • Maintain appropriate accounting records

Deducting Mileage as an Employer

As an employer, you can deduct the business use of your vehicles or mileage you pay to your employees.

  • Reimbursements you pay to employees are always deductible. The thing to watch out for is to follow the IRS rules for tracking these expenses so that the reimbursements don’t count as taxable wages for your employees.
  • If you have up to four business vehicles, you can choose between the standard mileage deduction or actual expenses method.
  • If you have five or more business vehicles, you must use the actual expenses method.

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