Originally posted by fshrdan
bruces, why do you need to set up seperate accounts? Are these expenses supposed to be treated differently? My post was advice on the off road tax credit alone.
My account is set up as "Fuel" a sub-category of "Operating Expenses". Is there a better way of doing this? I don't have to keep track of milage since it's a work truck. Why do many people do this? I think it'd be interesting to share our chart of accounts with each other. I'm kindof wondering how mine compares with other landscapers. Anyone interested?
If you are not incorporated (operating as a single person LLC or sole proprietorship / schedule c) one option for vehicle expenses is to use the standard IRS mileage rate in lieu of actual expenses.
This allows you to just keep track of business mileage and you don't really have to keep track of gas, oil, maintenance, insurance, etc. on the vehicle.
If you use this method then all of the actual expenses are not deductible. You just use the mileage amount. For 2001, the rate was 34 1/2 cents per mile. You can figure it both ways and use the higher method, subject to certain limitations.
If you are using actual expenses, your method of tracking fuel is fine. If you want to use the optional mileage rate for your vehicle expenses, you would have to keep track of vehicle expenses (such as fuel, repairs, etc.) separately from expense for your mowers, trimmers, etc.
Also, I personally prefer to see the fuel expenses separately for equipment vs. my truck. That gives me a little better handle on my expense breakdown.
I'm not saying your method is wrong, just not what I would recommend or prefer. If it works for what you need, great, everyone's business is different.