Is mileage that was reimbursed and included on 1099 counted as taxable income?

Yes, it's included in your taxable income, because that's how it's being reported to the IRS. But you can deduct business mileage as a business expense, which will subtract it from your taxable income.

But in order to report your income and expenses from a 1099-MISC, you'll need to use TurboTax Self-Employed.

When your employer includes the reimbursement as part of your wages on the Form 1099-MISC, you do not need to document it anywhere on your tax return.  All you need to do is to report your entire amount of income from the 1099-MISC as part of your self-employed income and then enter those mileage expenses along with you other related business expenses on a Schedule C.  This would be your off-set.  Just make sure to keep all the records in case IRS asks for proof later.

In TurboTax online, simply follow these steps:

• Sign in to your TurboTax account and select Pick up where you left off
• At the right upper corner, in the search box, type in "1099misc" and Enter
• Select Jump to 1099misc
• Follow prompts 
• If you are not in the self-employed edition, you will be prompted to upgrade.
• Follow prompts to complete

@rkjustice