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IndianaRed

Member
Well I had my audit today. Everything seemed to be going a lot better than I thought it might, right up until the end. She declared me a "vehicle for hire" instead of a freight carrier. This "vehicle for hire" is supposed to deal with things like taxis, not couriers. The result of this is that I cannot take the Standard Mileage Deduction and instead have to go with just fuel receipts, and others like oil, tires, etc. Well, that doesn't add up to the 50 cents per mile standard deduction.

Anybody know anything abou this?
 
indianared,

I'm not a tax professional, but I believe that the instructions for recording actual expenses for a "Vehicle for Hire', indicate that you can also deduct maintenance, depreciation, licenses, insurance, etc. Anything related to the lease or ownership of the vehicle.

Good luck,

Tom in TN
 
HHMMMM,must not be the same as when the wife used her own vehicle for home health care. The hospital paid her the standard millage rate. It wasn't taxable,but she couldn't deduct any of her vehicle expenses or even depreciate it. Don't know how they differentiate between the two.
 
My sister was a rolling nurse in Texas. She was paid twenty five cents a mile back then. The towns were far apart, and she went to three towns a day, Mon. thru Fri. All were once a week visits. She asked why not do town (A) one day then town (B) on Tue etc.

It fell on deaf ears all the way up the chain of comand, till she got to Medicare. She and a half dozen nurses found out the hospital was getting thirty five cents per mile, and paying the nurses twenty five cents.

Medi Care came down on the hospital, and within a year all six nurses were dismissed.

My sister died a very poor person, as she got breast cancer a month after her insurance ran out.
 
I think Tom has it. You can include depreciation on the vehicle. You also need to keep track of how much you use the vehicle for personal use (if any). That will determine the percentage of all of your costs you can deduct.

Google "MACRS" for and idea of how you depreciate your vehicle.

You may will find that your deduction goes up!
 
Instructions for schedule C say "You must use actual expenses if you used your vehicle for hire." From what little I know about your business, it sure sounds like it qualifies as "for hire".
 
She might have done you a favor, its more work but most people could usually find plenty of deductions to pile on and beat the standard ded.
 
She's probably correct... At least that's how we do it here.
You'd probably do better to find someone local who does tax work to have a look at your particular situation. I'm sure there's a lot of details involved that would be tedious to share 'here' that could make a huge difference to your outcome...

Rod
 
I haven't read the tax laws on vehicle usage for years but in pricipal:
If you use your own vehicle for company business and you're reimbursed by your employer it's a wash and no income is incurred and no deduction allowed. (Incidentally, the employer takes the deduction as a part of doing business.)
If the vehicle is used in your own business part time and personal business part time you can deduct the portion used for business purpose but you must maintain a log of miles driven and the purpose. You then have the choice to take the standard mileage deduction or maintain expense records and prorate the amount used for business miles. The most important thing is record, record and record.
 
Also, check for the policy on deprecation on equipment. You may be able to use double declining for tax accounting purposes, which means you rack up high expenses in the first few year, but not as much later...

Hurst
 
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