Don't taxes on a car allowance mean you can write off business mileage?Īgain, in the past, employees could deduct unreimbursed business expenses, but this is now the fourth tax year they have not been able to. If you own or manage a business that has employees driving personal vehicles as part of their jobs, it is important to note this distinction around tax deductions because it can have a major impact on those employees.Įmployees who drive a lot and relied on the business mileage deduction in previous years have taken a hit financially and may expect the company to fill in the gaps through their 2022 car allowance or mileage reimbursement. ( Here's our take on the 2022 IRS mileage rate of $.585/mile.) If you accrued business mileage as a self-employed contractor, you can still deduct that mileage, at the 2021 rate of $.56/mile. If you drove a personal vehicle on behalf of an employer during the year 2021, you cannot deduct that mileage on this year's tax return. However, self-employed tax filers may still deduct business mileage. For the tax years 2018-2025, employees cannot deduct business mileage. The answer is, it depends on whether you incurred the mileage as an employee or as an independent contractor or business owner. Can I deduct business mileage on my tax return? The Tax Cuts and Jobs Act (2017) made major changes to the rules around miscellaneous tax deductions that continue to affect whether you can deduct your mileage in tax years 2018-2025. It's tax season again and time to review the IRS rules regarding business mileage deductions.
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