Working on my taxes

Discussion in 'Business Operations' started by HPI_Savage25, Feb 8, 2013.

  1. JimMarshall

    JimMarshall LawnSite Senior Member
    from NW PA
    Messages: 316

    Please don't take offense but if your mom is an accountant and can't handle something as simple as a personal vehicle used for business, she's not much of an accountant.
  2. HPI_Savage25

    HPI_Savage25 LawnSite Member
    Messages: 192

    She's an accountant at a private school. She said i can't claim the truck but for mileage I'd have to have records for it all but since I've had the truck maybe 2000 miles of it has been personal use, other than that its all business. Mowing, estimates, etc
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  3. JimMarshall

    JimMarshall LawnSite Senior Member
    from NW PA
    Messages: 316

    You cannot deduct the truck, but you can deduct the mileage OR expenses, provided you have immaculate records.
  4. britsteroni

    britsteroni LawnSite Senior Member
    Messages: 334

    Keystone gave you some good advice in that you should seek out a qualified tax professional. I am in no way criticizing your mom, but being a bookkeeper for a school system has nothing to do with being a tax accountant.

    First of all, there has been some bad advice given by other members. Here is what you can do with your truck purchase:

    1. Because you are making payments and do not wish to take bonus depreciation up-front on the truck, you can depreciate the truck over 5 years.

    2. You are not allowed to expense the truck and take mileage, but you are not using the 179 expense allowance. So even though you are depreciating the truck over 5 years, you can take the higher of the mileage expense or actual expenses.

    3. So the calculation would look like this for the mileage expense: 12,200 miles x 95% business use = 11,590 miles x 55.5 cents/mile. So unless your actual expenses exceeded $6,432, you would be allowed to take that as the expense on your truck for 2012.

    4. Remember that with depreciation you are expensing the purchase of the truck. Using mileage or actual expenses is for the cost of operating the truck. That is why both deductions are allowed.

    The above isn't specific tax advice. It would actually save you money to take your taxes to a qualified tax professional just based on what you would have done without me explaining it to you. Doing your own taxes is fine, but you need to put in the time to learning the tax code if you take that route. For most small business owners, it doesn't pay to be a jack of all trades and master of none.

    Gabe Lumby, CPA

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