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Old 12-11-2018, 10:48 PM
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Join Date: Dec 2018
Location: Pittsburgh, PA
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1099, mileage deduction, mileage logs

Hello I have a few questions about Deductions, I perform 1099 work and I went out in the beginning of 2016 looking for a tax place to do my taxes for the end of the year. Trying to find out correct way to do deductions.

I clean restaurants and I have to pay for all my own fuel, supplies, and equipment. I work 7 days per week, every week, every month except for Thanksgiving and Christmas. The 1099 work I leave my house at around 10 pm and I do not return back to my house until 9 - to 10 am the next day. When I leave my house I go to a total of 5 different restaurants on a route and everyday (7 days a week it is always the same route). I average per day around 200 to 240 miles per day.

The tax guy I hired, I have used for 2016 and 2017 taxes. In 2016 when I first met him at his office I asked about the right way to do mileage deductions. I explained what I do, and I said I have 2 vehicles a personal vehicle and I have another vehicle that I will be doing the work in I would be putting a lot of miles on the vehicle and it would solely used for 1099 work 100% of the time.

He told me that a daily or a weekly mileage log of the miles either per day or per week since it was the same route everyday. He also said I could deduct mileage or I could deduct the auto expenses (wear and tear, oil changes, maintenance) but I could not deduct both.

I showed him a document I created a mileage log weekly starting from Sunday and ending on Saturday and on Sunday putting the mileage beginning miles in and then on Saturday putting the finished miles in for each week and then I have a separate sheet for each month totaling the mileage of the 4 weeks. At the beginning of the year I showed him my forms and how I was going to do it and he said it would be acceptable because it was a route and if any other business driving was done other than this then it would have to be individually recorded.

In 2017 While he was doing my taxes he said he did not understand why I did not have any records/receipts for maintenance, wear and tear, oil changes etc to give to him and I said you told me back in 2016 that I could not deduct both either I could deduct mileage or maintenance. He told me that he could not remember saying that and in fact I could write off both. (which I never claimed anything) I basically did 12 oil changes per year, one per month as well as new tires yearly and a lot of other maintenance. Averaging about 48-55,000 miles per year.

Last month I received a letter from the IRS stating a letter audit for car and truck expense and sch. c other expenses and I went to his office and he said well I knew this might happen in 2016 because you are using a lot of mileage each year more than a normal person uses but you have records to support the mileage so you should be fine, however you are supposed to record each entry, each day but I took your mileage logs and submitted them anyway. So he took my mileage logs both years and never said anything to me. He said oh wait you have 2 vehicles I could have deducted the cost of one of them and also got it depreciated for you but you never told me you had 2 vehicles.

I got really upset because I did tell him, I explained everything accurately to him each year as well as him telling me the mileage logs were fine and also that I could not deduct auto maintenance and then the following year telling me I could. I gave him the logs, the receipts and he never said anything...

Here are the questions;


Because of my driving/mileage situation do I have to change the logs or send them the way they are? He said if I turn the logs in the way they are they will not be acceptable. He said to break it down for each day and then turn it in.


2nd question Can you write off both mileage and auto maintenance? He said at the beginning in 2016 no and then currently he says yes?


3rd question He told me the benefit of hiring a CPA over a non CPA tax firm was in the event of an audit the CPA firm would handle it for me not saying up front additional costs of 2,000.00. In that case I could have went to any tax person and if I got audited (which I did) I would still have to pay someone. So his statement of him being better than the other guy does not make sense unless I am missing something?


I am currently trying to do the audit myself as making copies of all the receipts and everything they want. They said 1st is a mail audit, 2nd is phone audit and 3rd is home audit. Since they are auditing me for 2016 will they most likely audit for 2017? The same mileage and same thing as far as the mileage a lot of miles and same type of mileage logs.

Last question about mileage so this year I want to go out and try to get my own work not 1099. So if for an example I go out for 8 hours driving up one side of the highway and back down the other talking with 150 businesses dropping off brochures can I put the start mileage for that day and the purpose talking with new potential clients and then at the end of the day write in the finish miles? Or will I have to stop at each business and write in the start/end miles and the purpose 150 times for that one day?



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Old 12-13-2018, 04:53 AM
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He told me that a daily or a weekly mileage log of the miles either per day or per week since it was the same route everyday. He also said I could deduct mileage or I could deduct the auto expenses (wear and tear, oil changes, maintenance) but I could not deduct both. =======>once you get a 1099-MISC in the mail instead of a W-2, you're not really an employee, then, You can write off either the actual expenses for business driving -- gas, oil, tolls and repairs, for instance -- or take a straight mileage deduction. As of 2012, the IRS lets you write off 54.5 cents per mile of business travel. To track mileage, you just keep a record of your business trips. For actual expenses, you need to record your vehicle expenses for the year, then divide that by the percentage of business travel: If 40 % of your car use is work-related, 40 %of your annual costs are deductible. As an independent contractor not as a regular W2 employee, you report your 1099 income on Sch C of 1040. You also use Sch C to deduct car expenses.remember; Commuting to work is not a tax write-off -- not for employees, and not for independent contractors driving from home to a client's office. If you have to commute between two different client offices, or you use your car to make sales calls on clients, those expenses are deductible.

.so,your tax guy is totally accurate.

I showed him a document I created a mileage log weekly starting from Sunday and ending on Saturday and on Sunday putting the mileage beginning miles in and then on Saturday putting the finished miles in for each week and then I have a separate sheet for each month totaling the mileage of the 4 weeks. At the beginning of the year I showed him my forms and how I was going to do it and he said it would be acceptable because it was a route and if any other business driving was done other than this then it would have to be individually recorded.=============>.agreed;

In 2017 While he was doing my taxes he said he did not understand why I did not have any records/receipts for maintenance, wear and tear, oil changes etc to give to him and I said you told me back in 2016 that I could not deduct both either I could deduct mileage or maintenance. He told me that he could not remember saying that and in fact I could write off both. (which I never claimed anything) I basically did 12 oil changes per year, one per month as well as new tires yearly and a lot of other maintenance. Averaging about 48-55,000 miles per year.

Last month I received a letter from the IRS stating a letter audit for car and truck expense and sch. c other expenses and I went to his office and he said well I knew this might happen in 2016 because you are using a lot of mileage each year more than a normal person uses but you have records to support the mileage so you should be fine, however you are supposed to record each entry, each day but I took your mileage logs and submitted them anyway. So he took my mileage logs both years and never said anything to me. He said oh wait you have 2 vehicles I could have deducted the cost of one of them and also got it depreciated for you but you never told me you had 2 vehicles.

I got really upset because I did tell him, I explained everything accurately to him each year as well as him telling me the mileage logs were fine and also that I could not deduct auto maintenance and then the following year telling me I could. I gave him the logs, the receipts and he never said anything...==========>basically, this is a dispute between you and the tax guy. So I cannot judge anything o n it. In general, Tax return mistakes are often accidental, like when a client tells the preparer a wrong amount,or etc etc; Though IRS enrolled agents, CPAs and tax attorneys are governed by standards of professional responsibility and IRS ethics, more than half of the 79 million returns filed by paid tax preparers are not bound by those rules. At the end of your tax return, there is a statement that under penalty of perjury, the taxpayer believes the information to be true and accurate. This can hurt you when it comes time to defend your return if there is a serious mistake. So I guess hard to judge what truth is..

Here are the questions;


Because of my driving/mileage situation do I have to change the logs or send them the way they are? He said if I turn the logs in the way they are they will not be acceptable. He said to break it down for each day and then turn it in. ===============>>it doenot matter if yiu follow what he suggests you to do. Some of the common errors you see in a vehicle mileage log are Not including the business purpose; Using estimates instead of proper documentation; Errors from either negligence or just mistakes or etc. Your mileage log needs to include:Trip mileage ? How many miles did this trip take? Note: This doesn?t have to be an odometer reading, just the total miles of the trip. Dates of your business drives ? This is pretty self-explanatory.The locations you drove for work ? You have to record the start and end points of each trip. This doesn?t have to be exact addresses but the locations must be clear.The business purpose of your trip ? You must note why this was a work-related drive.
In addition to the above, the IRS wants to know the total business, commuting and non-commuting personal miles. You should also log your vehicle?s starting odometer reading.If you've already completed the year without tracking your mileage, you may be able to use a short-cut approach to create a record acceptable to the IRS, referred to as mileage samplingTracking your mileage is necessary whether you use the actual expense method or standard mileage allowance for claiming the deduction. so you need accurate tracking supported by mileage logs
Note; I guess this is not your case however, once you started out using the actual expense method when you first placed your car in service, you may never switch to the standard mileage allowance for that same vehicle in a subsequent year. However, if you started out using the standard mileage allowance, you may switch to the actual expense method for the same vehicle in subsequent years.
?


2nd question Can you write off both mileage and auto maintenance? He said at the beginning in 2016 no and then currently he says yes?===========>>ltdepends. The standard mileage rate is used in place of actual expenses. You,as a taxpayer, choose the standardmileage rate may not deduct actual expenses, such as depreciation, lease payments, maintenanceand repairs, gasoline including gasoline taxes, oil, insurance or vehicle registration fees


3rd question He told me the benefit of hiring a CPA over a non CPA tax firm was in the event of an audit the CPA firm would handle it for me not saying up front additional costs of 2,000.00. In that case I could have went to any tax person and if I got audited (which I did) I would still have to pay someone. So his statement of him being better than the other guy does not make sense unless I am missing something?=======>>not really;in general, IRS audits are rare. The IRS does most of them by mail. A full, timely response is critical.
? Face-to-face IRS audits are the rarest of all. It?s important to review your records in detail and prepare for the audit interview.
? The IRS agent?s determination in an audit is not final. You have the right to appeal.if you want, you may contact Taxpayer Advocate Service that is an independent organization within the IRS that assists taxpayers who are seeking help in resolving tax problems that have not been resolved through normal channels;
? You can also call them toll-free at 877-777-4778 for more info .



I am currently trying to do the audit myself as making copies of all the receipts and everything they want. They said 1st is a mail audit, 2nd is phone audit and 3rd is home audit. Since they are auditing me for 2016 will they most likely audit for 2017? ============>>I should say it depends; A repetitive audit occurs when the IRS has already examined the same items on a return in either of the 2 previous years, and the previous audit resulted in no changes or only a nominal change to the return. The IRS usually terminates repetitive audits. For taxpayers and tax advisors, invoking this policy may help avoid a full-scale audit if the IRS is taking up the same issues in a subsequent audit. The IRS can conduct only one inspection of a taxpayer?s books / records for any given year unless the taxpayer requests a second inspection or the IRS notifies the taxpayer in writing that an additional inspection is necessary.

The same mileage and same thing as far as the mileage a lot of miles and same type of mileage logs.=====>Asmentioned above; the IRS can?t subject a taxpayer to unnecessary examinations. However, Unfortunately, if you?re audited by the IRS once, you're more than likely to audited by the IRS again. If you did something on your tax return which was flagged by the IRS, you?re likely to continue claiming the same credit or deduction again. But Say, you've been audited by the IRS 2years in a row on the exact same issue, the IRS cannot audit you a 3rdtime on the same issue.?

Last question about mileage so this year I want to go out and try to get my own work not 1099. ======.Your own work?? As said UNLESS you are a reg W2 employee then you are a 1099 worker.

So if for an example I go out for 8 hours driving up one side of the highway and back down the other talking with 150 businesses dropping off brochures can I put the start mileage for that day and the purpose talking with new potential clients and then at the end of the day write in the finish miles?==========>correct I guess you are a 1099 worker then, you may either deduct your exact actual expenses as said or use the optional standard mileage rate to calculate deductions. Your commute is not tax deductible.however, You may get around this if you have a qualifying home office deduction. your commute is ?transportation between your home and your main or regular place of work.? Your ?home? is the place where you reside.

Or will I have to stop at each business and write in the start/end miles and the purpose 150 times for that one day?========>>as mentioned previously in general I should say that The IRS requires ?contemporaneous? recordkeeping for mileage. That means a recording at or near the time of the trip. You can record the mileage at the time of the trip and enter the business purpose at the end of the week. But waiting much longer could raise suspicion about the validity of the vehicle log and potentially jeopardize your entire vehicle deduction.
The irs requires varying levels of detail, depending on the circumstances. Say,you might be able to list only the customer?s name if you visit someone regularly to demonstrate new products, provide service and take orders. But cold calls to prospective customers may require a more detailed write-up in your vehicle log. A single entry may be enough for visits to several customers in the same day.it will be ok aslongas yu apply your basic personal logic and reasoning.



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