ORDER N0. 16442
APPROVAL OF CHANGE OF MILEAGE REIMBURSEMENT FROM 23~ PER
MILE TO 21C PER MILE
On this the 13th day of January 1986, upon motion made by
Commissioner Guthrie, seconded by Commissioner Holland, the
Court unanimously approved a change of mileage reimbursement
from 23C per mile to 21C per mile, for officials and
employees of Kerr County who are entitled to compensation
for travel reimbursement, effective as of January 13th, 1986.
is primaril -' "•"' +' °"'r u, ~ufi,ness• a the tri,
y personal, travel expenses to and from the destination are not deductih;,
even if he engages in business activities while there; but expenses at the destinaticr
properly allocable to business are deductible. If a family member accompanies e
taxpayer on a business trip, the additional amount spent for the family member is nc~
deductible unless the member's presence has a bona fide business purpose. The
performance of incidental services by the family member is not a "business u
[Sec. 1.162.2].° P ~
7}ip outside U.S. All travel costs, including meals and lodging, are deductible ,!
taxpayers spend their entire time on business. If the trip is primarily for business bu;
with some nonbusiness activities, expenses must be allocated between the two. Only the
expenses related to business activities are deductible. Generally, you cannot deduct the
expenses for attending a convention, seminar or similar meeting outside North America
unless (U the convention is directly related to the active conduct of your trade or
business or to your "nonbusinesa" activity, and (2) it is as reasonable to hold the meeting
outside North America as within it. The North American area includes the U.S., i
possessions, Canada, Mexirn, and qualifying countries in the Caribbean Basin. The
Caribbean countries are included in this azea if they: (1) are on a specific list of Harlots
(2) have agreed with the U.S. to exchange information; (3) do not discriminate in their
tax laws against U.S. conventions; and (4) are sot Communist and have not seized U.5
property [Sec. 274{hx6)],10 In addition to these countries, Jamaica is, by treaty, part e!
the North American area.
G5^nise ships. Individuals can deduct up to $2,000 of the cost of attending a conventi.-n
on a cruise ship, provided the ship is a U.S. flagship and all ports of call are in the U.S. cr
its possessions [sec. 274(hx2)].'0
Deductible traveling expenses include: expense of attending convention directly
related to taxpayer's trade or business [Sec, 1.1622],° attending church conference or
American Legion Convention as a delegate (deductible ee a charitable contrbution
[71941D>" expenses of traveling (including passport fees)1S to look after or inspec!
business or investment interests.+'
Nondeduc±ible tmueling erp˘nszs include: commuting expenses [Sec, 1.162-2]° (unless
part of medical expense, see ¶1946); expense of seeking new business location (capital
expenditure added to cast of property); expense of one seeking work in a different trade
or business (but, agency fees paid by one seeking employment in the same trade or
business one deductible as an itemized deduction, even if employment is not secured!."
Traveling expenses incurred by an individual in carrying on a trade, business, er
profe~ion as an employer or employee, deductible under above Hiles, are deductible for
adjusted gross income Purposes as explained in ¶24022408.
Necessity of proof Traveling expeasea are disallowed if the taxpayer does not keep
adequate records or other proof of the amount, time, place and business purpose of the
expense [Sec. 274(d);1.274-5(bxl)].36
NOTE: A 1995 law (PL 99-44) struck out a stricter substantiation requirement imposed by
1984 TRA as if d was never enacted. The repealed law would have required taxpayers to
keep "adegate contemporaneous records."
Mileagt rate. Instead of figuring the exact business cost when he uses his own
automobile, an employee orself-employed person can elect to figure his auto expenses by
using the standard mileage rate of 214 a mile for the firer 15,000 miles of business use
and 114 a mile for any additional business mileage. This does not include parking fees.
interest and certain state and )oval taxes (except gasoline). If the taxpayer alternates
lel 111x52 (Ill flfi.me na) 1!e,3s6(61
(10) 116,948 112) 113,251130) (lt) 111,220 l15) 116,946; 18.946.35
fl 11~??

~»cles, the total business mueage aetermmes ~nel ua,~u.,e .,.. ~ ~~••-••. - -••-
qfthe vehicles is fully depreciated.18 The mileage rate may not be used for a vehicle if it
Y treed for hire, such as a taxicab. If an auto used for business has been or is considered
(ally depreciated, a mileage rate of 114 a mile must be used if the standard mileage rate
Selec;ted,18 An auto is considered "fully depreciated" after 60,000 miles of business use
~ the maximum standard mileage rate, effective for transportation expenses paid or
hxvt'red after 1879. Also, if you use the standard mileage rate For the tax year your auto
m placed in service after 1980, you are considered to have made an election to exclude
the car from the Accelerated Cast Recovery System (ACAS). This means you must
!depreciate the car over its estimated useful life. Taxpayers who place vehicles in service
slier 1979 using the automatic deduction must also reduce their tax basis for figuring
pia or loss on a sale by a feed amount of depreciation. The rate is 74 for every business
stile driven in 1980 and 1981, 7'/24 for every buaineav mIle driven in 1982, and 84 Per mile
m 1983-1955. However, if the actual cost method was used for one or more of those
Imrs, these rates will not apply to any year in which that method was used.1° Employees
•l:o are reimbursed' for these expenses must report the reimbursement on their returns
they use the mileage rate deduction. Use of the standazd mileage rate does not affect
the taxpayer's itemized deductions for interest and state and local taaes.1° An employee
•ho is partially reimbursed for car expenses must keep adequate records or other proof
~ order to claim a deduction for the difference between his reimbursement and the
standard mileage rate.i1
TAX TIP: The method you use in deducting expenses for the year you place a post•7980
car in service will affect your options in later years. tf the standard mileage allowance is
used the first year, the standard mileage allowance or actual cost method can be used in
later years; the IRS will treat your use of the standard mileage allowance as an election to
exclude the car from ACAS. If you switch to the actual cost method later, depreciation
deductions will have to be taken under the straight-line method. If the actual cost method
is used in the first year, you cannot switch to the standard mileage allowance in later
years.
For limitations on depreciation deduction and investment credit for luxury cars and
-mixed-use property, see X1845. placed in service after 6.18-84. See ¶1845.
- Standard meal allowance. Instead of deducting your meals' actual cost while you are
~ttaveling away from home for business, you can deduct $14 a day if you stay in one
~ysneral azea less than 30 days, or $9 a day if your stay is 30 days or more. You must still
- the actual cost of other travel expenses as well as the time, place and your travel's
.~, ens Purpose•
{~) Transportation eapertses for daily travel from taxpayer's regular place of
_- 4mployment (tax home) to a distant temporary project are deductible." If the
~;ltmployment ie indefmite in time or embraces a variety of locations in a reasonably
fined area, the work place or area is the tax home and the commuting cost is not
deductible. Commuting expenses to and from work are not deductible. A deduction is
for the cost of transporting work implements used in the taxpayer's trade or
baenese. The deduction is limited to the excess of transportation costs over normal
IMPORTANT: Even though the costs of commuting to and from one's place of business
are not deductible, transportation expenses incurred while on the job are deductible if not
reimbursed.
If an employee works for 2 or more separate employers, each position is considered
rt of the employee's over-all trade or business. Therefore, local transportation
penses in getting from one place of employment to another are ordinary and necessary
penses in carrying on this combined trade or business, and are deductible. If the
118,962(5) (1T) 0836110) 1/81 111,42115)
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ORDER NO. 16442
APPROVAL OF CHANGE OF MILEAGE
REIMBURSEMENT FROM 23C PER MILE
TO 21G PER MILE (Effec. 1/13/86)
1-13-1986
Q, Page 180