If you accept an intern position, you may be unpaid for your work or earn just a small stipend. To claim deductions for any expenses related to the internship, it is first necessary to have taxable income. If you have other income or the stipend puts you into a reporting tax bracket, you may be able to take an internship-related business mileage deduction. Unpaid intern programs enjoy no special tax breaks, but the regular mileage tax rules may apply to your situation.
Business Use of Your Car
Expenses incurred when using your personal auto for work purposes can be used as a tax deduction. The costs of driving between work and home are not deductible. If you need to use your car to complete the duties of your internship while you are working, you will have a mileage deduction that can be used against any income you earn outside of the intern position. If your internship employer reimburses you for your at-work mileage expenses, you cannot deduct those expenses.
Must Be a Deductions Itemizer
Claim the business mileage deduction as an itemized deduction on Schedule A of the Form 1040 tax return. List your mileage expenses under the "job expenses and certain miscellaneous deductions" category. The amount of total job expenses that exceed 2 percent of your adjusted gross income will be added to your deductions. If you do not itemize but instead take the standard deduction, you cannot use your business mileage expenses.
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Interning at a Nonprofit
An unpaid internship at a qualified nonprofit, charity or government entity could be classified as volunteer work, which broadens the expenses that may be counted as tax deductions. The tax rules state that you can deduct auto expenses incurred while using your car to provide service to the charitable organization. These expenses include fuel, tolls and parking costs, but you cannot deduct any general maintenance or repairs. Keep accurate records of the business use of your car while completing your internship. There is no income threshold for the charitable deduction of auto mileage expense.
Tracking Your Auto Expenses
Both the business and charitable vehicle use rules allow you to deduct either your actual expenses related to the miles driven for business use or take a standard per-mile deduction. You must have records to back up your expense claims. The Internal Revenue Service sets a new business mileage rate every year. The charitable mileage rate is much lower than the business rate, but you can add parking fees and tolls under the charitable deduction rules.