Posted by John/Newby CA on 12/4/04 7:40pm
Msg #12728

Car expenses

Hi guys, just wondering how you write off car expenses for income tax in the situation that you don't have enough room in your home for a "qualifying home office"? As far as I can find in tax publications, if you go from home to 1 signing and back home, it is all considered commuting miles (not tax deductible). I apprciate your imput.

Reply by Steve on 12/4/04 9:37pm
Msg #12731

Hi John. I am an accountant as well as a notary signing agent. If you have not started a corporation, you are a sole proprietorship and need to report your income and expenses from signings on Schedule C. You can take 37.5 cents a mile as automobile expense in 2004 for all business related travel. Commuting mileage is when you are travelling to and from an office and you are a direct W-2 wage earner. So keep track of all of your mileage driven and you will see that your income will be offset big time by automobile mileage expense resulting in a significant decrease in your tax liability. Also make sure and deduct all of your office supplies and yes you can also take a business in the home deduction too. Any other questions, you and anyone else are more than welcome to call me anytime at 561-715-4200

Reply by Maureen/nh on 12/5/04 2:38am
Msg #12735

Steve, how can you set up a home office deduction without a designated room? I do have one but am asking for others. Actually in this business my whole darned house is office, but tell that to the IRS.

Reply by Steve on 12/5/04 7:32am
Msg #12737

Re:Car Expense

Maureen, you are right. Of course you need a designated room as an office and the square footage only for that room as a percent of the entire house is used.

Reply by Linda on 12/5/04 9:55am
Msg #12738

Re: Re:Car Expense

I have been under the impression that if you deduct a home office from your taxes you must depreciate your home annually. What do you think? Thanks

Reply by Jon on 12/5/04 2:20pm
Msg #12751

Re: Re:Car Expense

Linda,

You are correct. For any who are taking the home office deduction, make sure you are also depreciating your home. If you don't depreciate your home when taking the home office deduction, when you sell, you must still recapture the depreciation even if you didn't take it.

Reply by John/CA on 12/5/04 11:35am
Msg #12742

Thanks for y'r reactions but I still don't have an answer

The IRS states: driving from your qualified home office to a client is deductible expense,
My question was: I do not have the space for a qualified home office, so how can I handle the car expenses when I travel fom my livingroom (not qualified as an office) to the client? Or to Office Depot or Kinko's?

Reply by thnotary_NY on 12/5/04 11:59am
Msg #12743

Re: Thanks for y'r reactions but I still don't have an answer

As an independent contractor, u use the C form to deduct your expenses against the income u get from signing(s). If u look at the C form, you'll see one of the expenses is for auto. , Part lV on the back part of the form is the place to claim mileage (which u should be keeping track of). U don't need to have home office to claim this.

Reply by Teri-pa on 12/5/04 12:00pm
Msg #12745

Re: Thanks for y'r reactions but I still don't have an answer

It is the round trip-- whether you choose to take the home office deduction or not, that is not the issue. What is your business address for mailings, checks, checkbook, etc. That by default is your office...whether its on your lap or whatever....So, the round trip to your home office (even if its your lap) where your business bills and supplies come is the deductible...

Reply by Loretta Reed on 12/5/04 1:22pm
Msg #12747

Re: Thanks for y'r reactions but I still don't have an answer

I have been doing this for 8 years and I have always claimed my mileage, even when I did not have an office.

Reply by Jon on 12/5/04 2:16pm
Msg #12750

Re: Thanks for y'r reactions but I still don't have an answer

Your office for mileage consideration is where you do the majority of record keeping and paperwork. You do not have to take the home office deduction to deduct mileage. If you don't have a room for an office, skip the home office deduction. I have a home office but do not take the home office deduction. I do however write off all supplies and also mileage. If you have additional questions, feel free to to e-mail me at [e-mail address].

Reply by Irene on 12/5/04 2:15pm
Msg #12749

One of The forms you are looking for is 4562 it is for depreciation on your vehicle the other is sch C Line 9 Car and Truck expense see pg two item IV. There are a couple ways to figure cost you can use the 37.5cents a mile or you can also use actual cost if you keep good enough records, of course you use the one that benefit you most. Everything related to the expense of your vehicle in relationship to your income is deductible.
Example:
If you spent $4000. in gas, repairs, ins, lic. plates etc. on your car in a year and you use your vehicle 80% for business and 20% personal use then your deduction for sch. C line 9 would be
$ 3200.

If you decide to take the 37.5 cents a mile and you put 15,000. miles on your vehicle then your deduction would be $4,500. based on the 80-20% usage. You also can depreciate the vehicle too. I would suggest you find a good CPA to do your taxes for you if you make a mistake it could cost you way more than a CPA..

Good Luck hope this helped.

Reply by Jon on 12/5/04 2:23pm
Msg #12752

If you take the mileage deduction, depreciation is generally already included. You would only deprecitate you vehicle if you are using taking the actual cost deduction.

Reply by Irene on 12/6/04 9:43am
Msg #12808

Thanks Jon I forgot to mention that

Reply by John/CA on 12/5/04 3:34pm
Msg #12757

Re: Car expenses Thank you all, I apprecite it

Reply by Art_MD on 12/8/04 9:52am
Msg #12984

Re: Car expenses Thank you all, I apprecite it

A few other tax tips.

If you have to drive to the drop box - deductable expense - both ways.
I believe that if you go from the drop box to the liquor store, then home, only to the box is deductable.
Same if you need to pick up office supplies.
Cell phone costs.
If you take home office, don't forget heat, garbage etc as part of costs to be proportioned. (check on this with an accountant)
tolls

Art