PDA

View Full Version : important tax Q's


mikesjumpingin
04-18-2003, 03:11 PM
Just curious what everyone is writing off, such as gas for trucks (do you use gas/credit card for receipt?), and more importantly, what percentage of write off of your vehicle (claim 100% for business or a percetage?).

Also, Lesco charged me state sales tax on an aerator rental. Do we have to pay tax for seed, fertilizer, rentals, etc, when we are collecting tax from our customers?

Mike :blob3:

NYRookie
04-18-2003, 04:11 PM
Here in NY I write off a % of my truck because I still have a full time job. I write off the % that I use it for the business, say I put 20,000 miles on total, 5,000 miles are business related, that means I can write off 25% of my total expenses for the truck. That includes gas, ins.,maint., repairs.

I pay sales tax on rentals, and just about everything I buy, just because you collect sales tax from a customer, does not mean you don't have to pay when you buy or rent something.

I would recommend that you get an accountant, he will save you many headaches for the money they charge. Good luck.

tiedeman
04-18-2003, 04:31 PM
don't use the gallons, use mileage instead for your truck. You will get a better deduction with mileage.

JimLewis
04-18-2003, 05:10 PM
There are two basic methods of accounting for auto expenses. The Standard Mileage Deduction method will almost always get you more money. Plus, it's simpler. No hanging on to receipts for gas, oil, maintenance, tires, tune-ups, etc.!

However, if you own more than one company vehicle, you aren't allowed to use the Standard Mileage Deduction and are forced to use the Actual-Cost method (which means filing every freaking receipt).

If all you own in your household (e.g. you and your wife) is one vehicle, you can NOT claim 100% of that vehicle for work use. It's obvious to the IRS and/or a judge that if it's your only vehicle, you must use that vehicle for other purposes other than just business. BUT, if you own another, non-work, vehicle, THEN you can claim 100% of the work vehicle's expenses.

Anyway, for more on all of this, check out this website. It explains it all.

http://www.smartmoney.com/tax/homefamily/index.cfm?story=roadrules

lawnworker
04-18-2003, 06:00 PM
Hey Jim, I think if you have two vehicles, you can still use miles if they or not operated at the same time, like a taxi service.

BRL
04-18-2003, 06:00 PM
Each state has its own sales tax rules, so you need to contact your state about those questions if nobody from PA answers. Basically any expense that you incur to operate your business is a "write off". However, as in the case of vehicle expenses there are varying ways to account for some items. Its best to get help from an accountant with this stuff.

bastalker
04-18-2003, 06:07 PM
In Ct you can get a tax exemtion form that you hand over to your local seed and fert dealer, that will exemt you from paying tax from that particular store. If you deal with other stores for the same things you can give them one also. It simply means that you will be collecting the tax from the customer to give to the state. Keeps you from getting taxed twice. I dont know about rentals, I think it is strictly expendable materials...Something to check into.

I use a credit card for gas, for the reciepts, and mileage, whichever comes out more at the end of the quarter, thats what I will use.

I use my truck for 100% of my biz. I can deduct that. I pretty much save all my reciepts, and let the accountant do his thing.;)

JimLewis
04-18-2003, 06:12 PM
Hey Jim, I think if you have two vehicles, you can still use miles if they or not operated at the same time, like a taxi service. Yes, that's true. I don't know if a Taxi service is a good example or not. You basically can't ever have two vehicles on the road at the same time if you are using that method of deduction. But if you truly did have like 2 trucks, but only one person or one crew (e.g. one truck was always parked) then you could still use that method, yes.

mikesjumpingin
04-19-2003, 08:06 AM
I read up on the tax publications, but I'm curious...

For those using standard mileage, do you log all those miles?

That's what I don't want to have to do. I am still working a full-time job, so I am going to claim a percentage.

Is it okay to just use my total miles on the truck, and simply subtract fixed mileage to account for commuting, without having to log all those trips for business use?

I'm looking for the simplest record-keeping method for truck expenses.

Thanks,

Mike. :blob3:

hosejockey2002
04-19-2003, 12:22 PM
Mike- I use the Dome Auto Mileage Log. It's a little booklet that has columns for date, starting mileage, ending mileage and purpose of trip. It only takes me a few seconds each time to fill it out, and I'm sure it would look much better to an auditor than a pile of paper scraps with mileage written on them. Unless you've got an expensive rig with lots of depreciation, mileage is the way to go IMO.

Lombardi
04-19-2003, 03:36 PM
You don't have to log your mileage every time you drive. Just record your mileage at the beginning of your fiscal year and again at the end of your fiscal year. And, as stated before, determine what percentage you used the vehicle for business and that will be your deduction. I keep all receipts for fuel and maintenance and total that at the end of the year. I then figure my mileage deduction and whatever is greater, that is what is deducted.

bruces
04-21-2003, 09:33 AM
Originally posted by mikesjumpingin
I read up on the tax publications, but I'm curious...

For those using standard mileage, do you log all those miles?

That's what I don't want to have to do. I am still working a full-time job, so I am going to claim a percentage.

Is it okay to just use my total miles on the truck, and simply subtract fixed mileage to account for commuting, without having to log all those trips for business use?

I'm looking for the simplest record-keeping method for truck expenses.

Thanks,

Mike. :blob3:

Without logging the mileage, you have no basis to establish your percentage. How do you prove you used it at all for business?

The IRS doesn't really buy "oh, I used it 75% for business" without some documentation.

The rules require you to keep records, whether you are using mileage or actual expenses.

bruces
04-21-2003, 09:37 AM
Originally posted by Lombardi
You don't have to log your mileage every time you drive. Just record your mileage at the beginning of your fiscal year and again at the end of your fiscal year. And, as stated before, determine what percentage you used the vehicle for business and that will be your deduction. I keep all receipts for fuel and maintenance and total that at the end of the year. I then figure my mileage deduction and whatever is greater, that is what is deducted.

Again, all this establishes is total mileage for the year. Without mileage logs, how do you prove business use?

You can't really determine business percentage without mileage records.

Also, there are limitations on going back and forth on mileage vs actual deductions, depending on how the vehicle has been depreciated. Other records than mileage logs can be used to establish business miles (work logs showing jobs done, etc.) but a mileage log is the best and most accepted method.

scott's turf
04-21-2003, 12:37 PM
I have a dedicated truck for the business and I only put on about 10k miles per year so in my case the standard mileage deduction does not pay off. Just between fuel and insurance I have about $2500. And unfourtunally I usually have more that $1500 in repairs.

JimLewis
04-21-2003, 06:11 PM
Again, all this establishes is total mileage for the year. Without mileage logs, how do you prove business use? He's assuming you're using your truck strictly for business purposes like many of us do. If you also use your truck for personal use, than yes, you're obviously going to have to keep those annoying every-day mileage logs.

mikesjumpingin
04-22-2003, 07:47 AM
I have to find out if I can just multiply established routes by number of visits, or maybe just document my miles commuting to my job, times number of days worked, and just subtract that from my total miles for the year.

I really don't use the truck for family stuff, mostly just commuting.

Daily logging my miles reminds me too much of the people and paperwork I'm trying to get away from. I don't mind doing my own book keeping and taxes, but I just want to hop in the truck and go cut grass without filling out forms.

Oh well, maybe I'll get used to it.

Mike

Darryl G
04-22-2003, 11:46 PM
I'm full time solo with 2 trucks and only use them for work (we have 3 other vehicles). I write off 100% of the expenses on both trucks and save receipts for gas repairs, etc. Last year I spent almost $4,000 on repairs on the old one and only put 5,000 miles on it, (thus the new truck) so it was defintetly a better write off than the standard deduction. You do still need to report the total miles driven for the year though.

As far as sales tax, I fill out a tax exempt form for items I re-sell and tax the customer. That's the way it's done in CT