If your company reimburses you (or your employees) for business mileage, read this carefully.

Most contractors assume:

“I get reimbursed for mileage, so the vehicle is personal and done.”

❌ That assumption is wrong.

Here’s the surprise most contractors miss 👇

When you’re reimbursed using the IRS standard mileage rate, the IRS treats that vehicle as a business asset, not a personal one. Why?

Because the mileage rate includes built-in depreciation.

📉 Over time, that “deemed depreciation” reduces your truck’s tax basis.

So when you eventually:• Sell it• Trade it in• Upgrade the fleet

• You may have a taxable gain — or a fully deductible ordinary loss (yes, ordinary, not capital).

In many cases, contractors are leaving five-figure deductions on the table simply because no one tells them to report the vehicle sale on Form 4797.

⚠️ This applies even if:✔️ You were fully reimbursed✔️ Reimbursements were tax-free✔️ You thought “there’s nothing left to report”

TLDR:Mileage reimbursement doesn’t end the tax story — it starts one most contractors never finish.

👷‍♂️ Smart tax planning beats working harder every time. Book a time: https://accountingsolutionsllp.com/appointment/

Disclaimer: This content is provided for educational purposes only and is not legal, tax, accounting, or financial advice. Every situation is unique, so consult your own attorney, CPA, or financial advisor before making decisions based on this information.