Mobile mileage?

[msmcdon]

To all of you mobile detailers: Do you keep track of your mileage for jobs and write it off your taxes? If so, what do I need to do it correctly and what is the going rate for mileage?



I`m going to go full-throttle detailing come warmer weather and I`m getting a business plan together. I`m excited and freaked out at the same time, but I`ve come to realize that I want to be my OWN boss and help bring beauty to these dirty, ugly Kansas City vehicles!

[Scottwax]

I track my mileage. Most of my business is regular so I know how far I am driving each week. If I remember right, the deduction was 32.5 cents a mile last year. It adds up real fast, since I drive 10 to 12 thousand miles a year just for detailing.

[Turbonator]

you bet your boots i write off my mileage and EVERYTHING else i can too. i keep track of my mileage in my daily planner/appointment book. i believe Scott`s right, it`s about 32.5 cents/mile.:xyxthumbs

[matty north]

Originally posted by HoneyGold65

To all of you mobile detailers: Do you keep track of your mileage for jobs and write it off your taxes? If so, what do I need to do it correctly and what is the going rate for mileage?



I`m going to go full-throttle detailing come warmer weather and I`m getting a business plan together. I`m excited and freaked out at the same time, but I`ve come to realize that I want to be my OWN boss and help bring beauty to these dirty, ugly Kansas City vehicles!

For 2002, the rate is 36.5 cents per mile.

[caddyman]

Does anyone know of a place to get a list of all the tax write offs?



thanks

[matty north]

Originally posted by caddyman

Does anyone know of a place to get a list of all the tax write offs?



thanks

Of course, a qualified accountant.



Seriously, all this stuff is buried in 10,000+ pages of the Internal Revenue Code.



Generally, any "ordinary and necessary" expense incurred in the pursuit of taxable income is deductible against that income. There are limitations on some though, such as that on entertainment deductions, self-employed health insurance costs, as well as specified deduction amounts such as the mileage rate. Some items cannot be completely expensed in the year purchased and instead must be depreciated, resulting in the deduction being spread out over a specific number of years.

[caddyman]

thanks,

[Taxlady]

Okay, I don`t do U.S. taxes; I do Canadian income tax. I would suggest that getting a pro to do your taxes will probably save you money. It`s a good idea to get someone who specializes in self-employment and if you can find someone who already handles detailers, so much the better. You could even go to H&R Block, especially if you can get a recommendation for a specific tax preparer. The quality of their tax preparers varies wildly. Even if you only use a professional once, it will help you out (if you get a good one). It wouldn`t hurt to talk to an accountant or other tax pro now, as opposed to waiting until it is time to do your income tax.



There is probably a pamphlet from the IRS for self-employed persons. It will give you a good idea of what sorts of things you can deduct, e.g., office in home expenses. Check their website, you might be able to download it or order it online. Another suggestion is to have a look at the extra schedules that self-employed persons have to fill out with their tax returns. There will be lines for the most common expenses and their is a guide.



I`m self-employed and I keep a log in a sprial notebook that lives in the pocket in the door of my car. I record every biz trip (meeting with client, trips to the post office, trips to the bank, trips to government agencies, trips for biz shopping, etc.). I write down the odometer readings, the date, and the purpose of the trip. I also mark every fillup - cost, number of litres, odometer reading. I also write down any parking for biz, including how much I put in a parking meter.

[matty north]

Originally posted by Taxlady

Okay, I don`t do U.S. taxes; I do Canadian income tax. I would suggest that getting a pro to do your taxes will probably save you money. It`s a good idea to get someone who specializes in self-employment and if you can find someone who already handles detailers, so much the better. You could even go to H&R Block, especially if you can get a recommendation for a specific tax preparer. The quality of their tax preparers varies wildly. Even if you only use a professional once, it will help you out (if you get a good one). It wouldn`t hurt to talk to an accountant or other tax pro now, as opposed to waiting until it is time to do your income tax.



There is probably a pamphlet from the IRS for self-employed persons. It will give you a good idea of what sorts of things you can deduct, e.g., office in home expenses. Check their website, you might be able to download it or order it online. Another suggestion is to have a look at the extra schedules that self-employed persons have to fill out with their tax returns. There will be lines for the most common expenses and their is a guide.



I`m self-employed and I keep a log in a sprial notebook that lives in the pocket in the door of my car. I record every biz trip (meeting with client, trips to the post office, trips to the bank, trips to government agencies, trips for biz shopping, etc.). I write down the odometer readings, the date, and the purpose of the trip. I also mark every fillup - cost, number of litres, odometer reading. I also write down any parking for biz, including how much I put in a parking meter.

Paragraph one above: Very good advice. If this advice is followed, the rest is moot. A good qualified tax preparer should ask about things one would have never thought of. Seeing one now is also good advice. After-the-fact tax planning is often an oxymoron. Would have, should have, could have....



Paragraph two above: There are many publications by the IRS, many of them targeted at a specific type of deduction as opposed to a type of industry or taxpaper. By the way, I warn against the in-home office deduction in the U.S. Many surprises result from that when the sale of the home later occurs having to do with the capital gains exemption on personal residences and recapture of prior depreciation from the in-home deduction. See a tax pro before doing this. And make sure he or she explains the impact in out-years and not just the impact in the current year.



Paragraph three above: In the U.S., if you take the mileage rate deduction, you cannot also take the direct cost of fuel, tires, etc. I`m not sure if what you are saying here is that you can in Canada but I am reading it that way and in the event others might also, I just want to point out a difference that may exist between the two different tax codes. In the U.S., the mileage rate is in lieu of that and contemplates the average cost of driving including gas, insurance, wear-and-tear, etc. So it`s either one or the other....the mileage rate deduction or direct cost of driving. Which one is better depends on the individual case. Certainly, the mileage rate is easier to use and generally results in a higher deduction for someone who uses the car for a lot personal use as well as business use. Parking charges and toll charges and the like are deductible over and above the mileage rate. Don`t forget to keep up with those receipts also.

[Taxlady]

NHW, thank you for the follow up and clarification. Espcially the part about office in home. I`ll have to remember that there are serious "gotchas" there in the US taxation system. My real point was, as you said, deductions that one would never have thought of.



As to the third paragraph, I included the part about fillups, `cause that`s what I do. I figured it wouldn`t hurt to have that info. I would imagine that in just about all cases when someone is doing their own tax returns, it wouldn`t be worth the effort to figure out which method was better, mileage or direct cost - just take the mileage. In Canada there is no choice if you are self-employed. You use direct costs and calculate the percentage of car use that is for biz. The log of kms driven for biz use is very handy if you are ever questioned or audited.

[CharlesW]

Not a Professional Detailer, not a Tax Expert, but I have been audited, both for business and personal taxes. Just one thing,

RECORDS! Keep records for everything no matter how unimportant it may seem. I am an absolute fanatic about keeping paperwork and it has been very helpful in any audit situation. The IRS likes to see the paperwork that verifies expenses. If you follow the rules or advice of a good tax person and have the records to back everything up, you have nothing to worry about. When I was in business for myself, I even went so far as to use a seperate credit card account for all business purchases. Two things, no problem figuring out what was business related and what was personal, plus you never forget to get a receipt, the store won`t let you leave until you have at least signed one.



Charles



PS: Came out clean on the audits.:xyxthumbs

[billium]

Go to IRS publications site ( I simply typed "IRS Publications" on my browser), click "publications online" and then "publication 334" which covers small business expenses. Business vehicle mileage as well as other vehicle related deductible issues are covered in chapter 8.