J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

20.34 Automobile Mileage Allowance

If your employer paid you a fixed mileage allowance of up to 55.5 cents per mile for business miles driven in 2012, the amount of your driving costs is treated as substantiated under the accountable plan rules (20.32), provided you show the time, place, and business purpose of your travel. If the allowance is in the form of an advance, it must be given within a reasonable period before the anticipated travel and you must also be required to return within a reasonable period (20.32) any portion of the allowance that covers mileage that you have not substantiated.

If these tests are met, the allowance will not be reported as income on Form W-2, and you will not have to report the allowance or expenses on your return; see Example 1 below. If you do not prove to your employer the time, place, and purpose of your travel, the entire reimbursement is treated as paid from a non-accountable plan and will be reported as income on Form W-2.

Your employer may reimburse you for any parking fees and tolls in addition to the mileage allowance.

EXAMPLES

1. In 2012 you drove 12,000 miles for business. You accounted to your employer for the time, place, and business purpose of each trip. Your employer reimbursed you at the IRS rate of 55.5 cents per mile. None of the reimbursements will be reported as income on your 2012 Form W-2, and you do not have to report the reimbursements or any expenses on your return if you do not have substantiated expenses exceeding ...