Many pizza drivers wonder if they can claim their mileage on their taxes. This post is directed towards them.
The answer to the question is, yes, you can. It goes on Form 2106, Employee Business Expenses, which then becomes an itemized deduction on your 1040 Schedule A Itemized Deductions.
If you want to read what the IRS says, start by reviewing Topic 510, Business Use Of A Car.
What you need to know:
- There are 2 methods: Actual expenses or mileage. Unless you are driving a newer car that you are still making high payments on, it is usually better (and almost always simpler) to use the mileage method.
- If you claim expenses, you must also claim your reimbursements.
- To claim your expenses, you must itemize your deductions on Schedule A. Unless you have a mortgage and pay a bunch of interest, or make large charitable donations, you are better off claiming the standard deduction.
- Even if you itemize, your unreimbursed expenses must be at least 2% of your total income.
You fill all this information out on IRS Form 2106.
For example, here is my info for 2006:
Start on page 2
Line 11: Date vehicle placed in service: 1/1/2006
Line 12: Total miles: 23,585
Line 13: Business miles: 10165
Line 14: Pct business use: 43.10%
Lines 15-16: blank
Line 17: Other miles: 13240
Line 18-21: Yes
Line 22: $4523
Since I use the mileage method, not the actual expenses method, I can leave lines 23-38 blank.
Back to page 1
Line 1: Vehicle expense from 22: $4523
Line 2: Parking fees, etc: 0
Line 3: Travel expenses: 0
Line 4: Business expenses: 0 (if you are claiming a cell phone, flashlights, maps, etc this is the spot).
Line 5: Meals and entertainment: 0
Line 6: Total Expenses: $4523
Line 7: Reimbursements: $2241 (this is your nightly per-run money)
Line 8: 4523 - 2241 = $2282
Line 9: $2282
Line 10: $2282
Now this total $2282 goes to line 20 on Schedule A, Job Expenses.
So since I itemize anyways, this extra deduction of $2282 for me saved me a few hundred dollars in taxes. I keep a delivery log anyways and I just write down my starting & ending mileage each night.
Again, since I use the mileage method, I do not have to track my car repairs, gasoline costs, etc.
Note once again that I am NOT an accountant, but I am confident that this information is accurate. However, I am not giving any advice here, just letting you know what I did. Study this and compare it to your own situation, and review the IRS publications, and decide for yourself.