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View Full Version : Wear and tear?


John deer Z
02-24-2010, 09:40 AM
Saw a post on here a while back about profit Vs cost and some one was being critical about how other people figure profit margin. Was wondering how some of you figure profit? One poster was bragging about how he showed wear and tear on his vehicle. How do you show exact wear and tear on a vehicle?

Richard Martin
02-24-2010, 11:30 AM
One poster was bragging about how he showed wear and tear on his vehicle. How do you show exact wear and tear on a vehicle?

You can show anything you want on a Profit and Loss statement. Most people apparently make it up as they go and then swear that there's some rule somewhere that says you have to do it their way but they're never able to provide a link to the rule.

Since most of us have no board of directors, regulatory agencies or partners to answer to the only authority we have to answer to is the IRS. Since that is the case then you should start by looking at what you're allowed to deduct or depreciate to figure your costs per hour.

For example I use the mileage deduction for my truck. So I just figure in 52.5 cents in cost for each mile my truck is driven. This includes the fuel, maintenance and wear and tear. Insurance is figured as a separate line item on the P&L.

I basically use a rearward looking system for figuring costs per hour that I may adjust depending on special circumstances like the purchase of a new piece of equipment or a major increase in the price of gas. Just use the previous year's 1040's and go from there.

John deer Z
02-24-2010, 06:14 PM
kkk:confused:

Columbia Care
02-24-2010, 06:39 PM
Straight Profit is the difference of the Revenue you receive or earned minus your total expenses (fuel, parts, new equipment purchases, repair cost, etc.). When I calculate what I will be paying taxes on, I get my accountant to do the work which would include equipment depreciation (wear / tear and vehicle milage), home office cost, etc. Hope this helps.

John deer Z
02-24-2010, 07:56 PM
Straight Profit is the difference of the Revenue you receive or earned minus your total expenses (fuel, parts, new equipment purchases, repair cost, etc.). When I calculate what I will be paying taxes on, I get my accountant to do the work which would include equipment depreciation (wear / tear and vehicle milage), home office cost, etc. Hope this helps.

I know how the taxes are done showing profit vs cost. But how are you all figuring it out thru the year as you go to let you know each day your true profit?

Columbia Care
02-24-2010, 11:20 PM
I use an Excel Spreadsheet Program and enter my cost and revenue each day. The spread sheet is programmed to calculate each time an entry is made. This tells me my profit or loss everytime I make an entry.