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Well, I've been interviewing for a new job. It looks like a really sweet deal. It will require a lot of driving, using my own vehicle. The fly in the ointment is that I'll be an employee rather than a contractor (Schedule C I understand). The company would reimburse 34 1/2¢ per mile. Is this going to be considered income? Will I have to keep track of my expenses and pay taxes on the difference? There is no way in heck it costs 34 1/2¢ to run my car barring a catastrophe not covered by insurance. Since it's a reimbursement, and uses the IRS approved number do I get to pocket the difference tax free?

Oh, just to make it a little more complicated I used my current vehicle in contract work through 1997 and deducted the then going mileage rate on Schedule C. That includes depreciation, no? If so my vehicle may be very nearly fully depreciated if I recall the numbers correctly.

Should I give up the idea of this sweet job because this will cast me into an inner circle of income tax hell?

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