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03 - Accounting & Taxes Accounting Help & Tax Strategies

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  #1  
Old 05-16-2005, 03:36 PM
PD1 PD1 is offline
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Default mileage write-off

I'm an independent contractor and do a decent amount of driving. I'd like to write the mileage off on my taxes, but the car I drive is not in my name. I've read through the IRS website and it seems I must be the owner of the car to write off mileage. If I were to have the car put in my name could I start tracking the miles from that day on? I'm not sure how it works.

Also, I couldn't find any information on what all needs to be tracked as far as my day-to-day mile count. Do I need the date, start/end mileage, time, location etc..?

Thanks!
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  #2  
Old 05-19-2005, 09:08 PM
artoir artoir is offline
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Whenever I meet with clients, I just print out a mapquest route to the destination and file it later. I'll note the date and person/reason I'm meeting with them. I don't think you're required to keep this information, but if you're ever audited, it will help if you have it.
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  #3  
Old 05-19-2005, 09:57 PM
pete
 
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You pretty much need a log to justify the miles you claim at the end of the year.

Starting mileage each day, stops along the way, ending mileage.

You cannot claim to and from your home to your place of work. Only miles from place of work to various sites / sales - service calls, etc. Then back to the office / place of work.

The exception to this is "outside salesmen" who work from their home and do not report to a local office on a daily basis. They do not want to subsidize your commute.
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  #4  
Old 05-20-2005, 05:31 PM
PD1 PD1 is offline
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what about other expenses? instead of just doing it by mileage.

thanks!
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  #5  
Old 05-20-2005, 05:52 PM
pete
 
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I believe, but haven't been involved for a few years, that you can track all of your vehicle related expenses, such as gas, tires, repairs, insurance, etc. and claim them.

BUT, the same thing applies as far as use. You still have to track mileage and you can only deduct the portion of expenses relating to actual business use.

As an example, you drive 20,000 miles a year. But you can only justify 10,000 as business related - again no trips from home to office and back home. So, you get to deduct half of the actuall expenses.

And you have to have on hand every receipt, every gas purchase, etc. It's a lot simpler to just take the mileage allowance and move on.

Again, they do not want to pay for your commute. Very logical reason. Even if you do work outside the office, if they allowed you to deduct for the commute, they would have to let everyone with a job claim their commute as an expense. It's only fair to those who spend an hour and a half each way, but don't leave once they get to the office.
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  #6  
Old 05-20-2005, 06:55 PM
Evan
 
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Why not set up a company reimbursement form, and detail what the expenditures are, and attaching any receipts, etc. Then you can give this to the "boss" who can reimburse you.

The boss can also be you :-)

A gas allowance may also work, if the company just decides to pay you $20.00/week specifically for gas.

If you're looking to track mileage, here is a good template from Microsoft.
http://office.microsoft.com/en-us/te...884621033.aspx
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  #7  
Old 05-20-2005, 07:07 PM
PD1 PD1 is offline
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thanks guys

I'm a little confused though..how exactly do you prove you've driven any miles? Say if you were audited, do they just take your word for it by looking at the daily logs you keep?
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  #8  
Old 05-20-2005, 07:57 PM
pete
 
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It seems you're really more intent on cheating than on getting an honest reimbursement. It's sort of like "Ya pays yer money and ya takes yer chances." Some times it seems like they can tell by the way you sweat that you're cheating.

And if you use a professional to file your taxes, they are probably going to want to see some documentation to suit themselves, before they claim anything.

Play it straight, keep a mileage log, and you've got nothing to worry about. And don't try and claim that drive to Disney World with the wife & kids as a business trip.
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  #9  
Old 05-20-2005, 09:12 PM
Evan
 
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Or a very expensive Valentine's Day dinner as a "Shareholder's Meeting".
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  #10  
Old 05-29-2005, 11:42 AM
PD1 PD1 is offline
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Hello again..I just talked with my employer and he says since I trvavel from one municipal county to another (my home to job site) that I can count those miles as a deduction. Any truth to this? Thanks
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