This first question arrived over the New Year holiday:
Q: I've negotiated a mileage reimbursement for the company I work for. How is this handled on our taxes? KF, Florida
A: If you are an employee of this company, they should provide you with a periodic report in a format requesting the same information as the IRS would. In this case, you would turn over the report, and they would give you a check as reimbursement. When you file your income taxes, neither the reimbursement or expense would need to be reported as the reimbursement is not reported on your W-2 form.
If you are an independent contractor, most likely the reimbursement will be included on the 1099-MISC form you receive in January. In this case you will need to report both the income and the expense to "cancel" it out on your tax return.
Tip: As many small employers don't understand income tax codes and regulations, it's always a good idea to save a copy of all reports turned over to your employer or company who engages you. This way, if your reimbursement is included in your W-2, you have the information to report the expense on your tax return.