Can a Sales Rep Claim Mileage on a Tax Return?
Not only can a sales rep claim mileage on his tax return, the government's standard mileage deduction might turn out to be one of his largest tax breaks depending on the size of his territory. Though the mileage rate has fluctuated over the years, for 2011 it stood at 51 cents a mile. This means you can deduct 51 cents off your tax burden that year for every documented mile you drove while engaged in business activities. For some, this is not an inconsequential benefit.
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Mileage Deduction
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The IRS describes the standard mileage rate as a tax deduction available for business miles driven. Some sales reps might use the straight expense method and, in some cases, that might provide more of a financial benefit, but using the government mileage rate is easy once you get in the habit of documenting the time you spend on the road. No receipts are required to claim the deduction, only an organized journal that records your daily business trips.
Fees and Tolls
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If you drive near some major metropolitan areas, paying parking fees and road tolls is a daily ritual. Even though you take the standard mileage deduction, you can still deduct these types of miscellaneous expenses as another cost of doing business. With parking fees and tolls, keep track of your receipts if the IRS starts nosing around, wondering if you really paid the $8 (as of 2011) to cross the George Washington Bridge into New York City as often as you claimed.
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Record-Keeping
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When submitting a standard mileage rate deduction, the secret is to keep a daily journal of your business driving. It's not complicated. A small notebook will suffice where you log the date, start and end mileage and purpose of the trip. As a sales rep, you must get into the habit of writing down this information every time you head out on the road. If the IRS decides to challenge the legitimacy of your mileage claim, a well-documented log goes a long ways toward proving your case.
Considerations
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The IRS does not allow any single taxpayer to use the mileage deduction for more than four vehicles at one time. Though most sales reps are not going to be in danger of running afoul of this rule, it's a good idea to at least be aware of it. Public comments were being sought by the tax agency as of 2011 to decide if this rule should be thrown out. A new rule in 2011 also allowed taxpayers to claim the mileage rate when employing vehicles for hire, like a taxi.
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References
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