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  #11  
Old 03-27-2013, 02:52 PM
rlitman rlitman is offline
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Quote:
Originally Posted by mkarps View Post
So correct me if I'm wrong, but just thinking about this. I've deducted all the fuel as an expense. So buy filling this out and getting back the off road use part really I am just creating more income then to tax....Seems like a lot of extra work for nothing.
This is incorrect. You are confusing a "tax deduction" from a "tax credit".

A credit is money in your pocket. Whatever the credit is, that's what your taxes are reduced by.
A deduction reduces your taxable income by that amount, but your taxes are then only reduced by that deduction times your tax rate. So you only get back a small fraction of the deduction.

In this case, getting the credit on off-road fuel use (whether it is for power tools, or vehicles not driven on public highways, or generators, or whatever) will always get you more money back.
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  #12  
Old 03-28-2013, 01:56 AM
mkarps mkarps is offline
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ok.... I thinkkkkkk I got it now. Reading through the off road refund description it says "If the expense for purchasing the fuel (including the tax) is deducted as a business expense, the credit or refund must be included in gross income by the taxpayer."

So I can deduct the full portion of fuel, right? In turn lower my tax from that fuel expense deduction...fill out the off road portion for the credit/refund.....but then I do have to claim the refund or credit as additional income which is taxed at my tax rate(25% for example), which is less than 100%. So would be better off claiming rather than not....Yes?

I hope I've got this figured out...if so thanks again guys. great to have some time to surf lawnsite again but now I just need this snow to melt so I have less time to think about this and can actually get out on the lawns again!!
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  #13  
Old 03-28-2013, 05:41 PM
rlitman rlitman is offline
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You deduct the fuel cost as a business expense (at your full tax rate).
Then get the credit for the off-road tax. That adds to your NEXT year's income (because of when you received the credit), because you deducted the fuel cost already (if you didn't deduct the fuel cost in the first place, then this credit wouldn't be income).

If your full tax rate is 25%, then you end up with 75% of the credit in your pocket (100% now, but then you pay back the 25% next year, unless you pay quarterly). You still come out ahead.

Yes, you deduct the full cost of the fuel to the business. The business expense deduction is based on how much the fuel costs.
The credit for off-road use is to refund you the amount you paid up-front towards road tax. That number is based on gallons, not dollars spent. Because of this disparity, there's no way to get around entering all these numbers.
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  #14  
Old 03-28-2013, 11:34 PM
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DA Quality Lawn & YS DA Quality Lawn & YS is offline
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Originally Posted by The Don'z View Post
Does anyone know if there is a tax law about getting "road use tax" back for fuel used in lawn equipment? would it be like farm equipment?
Here in MN you can. You file monthly returns here.
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  #15  
Old 05-11-2014, 09:19 AM
The Don'z The Don'z is offline
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thanks to everyone for their input, keeping gas records on my tablet as i purchase the fuel, separating truck from equipment.
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  #16  
Old 05-12-2014, 01:08 AM
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Fvstringpicker Fvstringpicker is offline
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Quote:
Originally Posted by mkarps View Post
So correct me if I'm wrong, but just thinking about this. I've deducted all the fuel as an expense. So buy filling this out and getting back the off road use part really I am just creating more income then to tax....Seems like a lot of extra work for nothing.
You're basically right.
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