"Unique" tax deductions

Discussion in 'Business Operations' started by Mowin4cash, Feb 3, 2001.

  1. Kent Lawns

    Kent Lawns LawnSite Senior Member
    from Midwest
    Posts: 870

    Fuel Tax credit and section 179 your equipment pruchases are the only "unique" tax deductions I know of.

    The rest are common sense any CPA would know.
     
  2. watatrp

    watatrp LawnSite Senior Member
    Posts: 491

    Has anyone taken a deduction for a garage at a personal residence used for storing equipment during the mowing season?

    Cell phone deductions: My accountant said it couldn't be taken unless you get an itemized printout of all calls made.

    Can someone tell me about deducting vehicle payments. My truck is used only about 40% for business and the rest for personal use. Right now I deduct for mileage only.
     
  3. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    Watatrp wrote:

    <b><i>Can someone tell me about deducting vehicle payments. My truck is used only about 40% for business and the rest for personal use. Right now I deduct for mileage only.</b></i>

    There are 2 types of vehicle deductions.

    The first is the one you are using. You can deduct for every mile you use the vehicle for your business.

    The second is the expensing method. You add up all of your vehicle expenses for the year and then in your case you can deduct 40% of those expenses.

    In either case accurate mileage logs must be kept. The log does not need to show the mileage for every stop. I use these catagories for my mileage logs: The date, mileage at the start of the day, mileage at the end of the day, purpose of trips, total mileage for the day. It would look like this:

    Date...Start.....Stop.......Purpose.......Total Miles
    5-1-00.23009.....23015......Local Cutting......16
    5-2-00.23021.....23151......Trip To Mower.....130
    ............................Dealer

    If you go off of your route to get lunch or a drink then those miles are not deductable. Remember, IRS auditors are trained to look for inconsistances.

    [Edited by Richard Martin on 02-09-2001 at 08:13 AM]
     
  4. thelawnguy

    thelawnguy LawnSite Silver Member
    Posts: 2,412

    "The date, mileage at the start of the day, mileage at the end of the day, purpose of trips, total mileage for the day. It would look like this:

    Date...Start.....Stop.......Purpose.......Total Miles
    5-1-00.23009.....23015......Local Cutting......16
    5-2-00.23021.....23151......Trip To Mower.....130 "

    You need to account for mileage from stop to stop as they will disallow commuting miles, i.e., you cannot deduct the mileage from home to your shop, or from the last job to home (or shop).
     
  5. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    The Lawn Guy wrote:

    <b><i>You need to account for mileage from stop to stop as they will disallow commuting miles, i.e., you cannot deduct the mileage from home to your shop, or from the last job to home (or shop).</b></i>

    IRS publication 463 states:
    ---------------------------------------------------------
    <b><i>Car expenses.</b></i> You can account for several uses of your car that can be considered part of a single use, such as a round trip or uninterrupted business use, with a single record. Minimal personal use, such as a stop for lunch on the way between two business stops, is not an interruption of business use.

    <b><i>Example.</b></i> You make deliveries at several different locations on a route that begins and ends at your employer's business premises and that includes a stop at the business premises between two deliveries. You can account for these using a single record of miles driven.
    ---------------------------------------------------------

    The information that I provided was taken directly from the IRS Small Business Resource Guide.

    The mileage starts counting as soon as you leave the premises where your business is located and it continues to be counted until you return to the premises where your business is located unless you deviate from your normal routing. Sales calls are handled using the same rules.

    The "form" that I provided above was an adaptation of the example that can also be found on the IRS SBRG.

    The IRS SBRG can be obtained from the IRS at http://www.irs.gov and it is Publication 3207 Catalog #26757M.
     
  6. Mike Nelson

    Mike Nelson LawnSite Senior Member
    Posts: 416

    It all sounds like a write off to me,but when the man comes knocking!:eek:
     
  7. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    You need to account for mileage from stop to stop as they will disallow commuting miles, i.e., you cannot deduct the mileage from home to your shop, or from the last job to home (or shop).

    Above is very correct: if you want to use details, read the whole tax publication (Publ 463), even the examples, and get the requirements for proper recordkeeping as the IRS sees it. Partially following the rules, or using your own interpretation of them can be very expen$ive.
     
  8. thelawnguy

    thelawnguy LawnSite Silver Member
    Posts: 2,412

    Richard,

    You need to keep reading. The pub later specifically uses examples such as lawn service as to the type of driving which qualifies and what doesnt.
     
  9. cclllc

    cclllc LawnSite Senior Member
    Posts: 903

    Don't forget seminars and trade shows.I write off the louis.ky expo.
     
  10. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    u can only take the fuel tax credit if you are not taking the fuel off your taxes already, otherwise this would be a double deduction since the tax on fuel is included in the price. u cant switch from taking the actual vehicle expences to taking the milage, otherwise everyone would do this till it gets old then take the mileage. has anyone ever been audited, or evan know anyone who has?
     

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