True confessions time. When it comes to keeping records, receipts and stuff I’m not very attentive, that’s why I’ve always used the mileage deduction on my work truck for tax purposes. It’s an easy process, since the truck is used exclusively for work only two numbers to work with, a beginning mileage and an ending mileage done. This year is a little bit different I bought a Powerstroke Ford, now I pay about triple for routine maintenance like oil changes, air filters, etc that I did before. So I’m thinking that keeping receipts for every drop of fuel, oil, wiper blade etc. might net me a larger deduction.
Any opinions?
Scott R.
Replies
Scott-
If it's a business only vehicle, you should be able to write off ALL of the costs of ownership- monthly payments, insurance, gas, repairs, etc. The repairs and gas are minor compared to what the monthly payment must be on that beast....lol. Check into it with your accountant, but it should be do-able.
Bob
Bob, bought it used (wink wink). Don't get the idea that I'm doing well enough to buy a $40k truck.
However you did bring something to my attention that I hadn't considered. I've never had payments for a work truck before.
Scott R.
Only your accountant knows.
BTW, it has nothing to do with size of monthly payment. It's what depreciation schedul you choose and the purchase cost. You did keep track of that, didn't you?
;)
Excellence is its own reward!
"The first rule is to keep an untroubled spirit.
The second is to look things in the face and know them for what they are."
--Marcus Aurelius
Since I'm in the same boat ( $57 for an oil change, are you kidding me?) and take four gallons of oil at a time, here's what I know (and a lot of what I just think I know!). Everything you do to the truck as far as your diesel, oil changes, filters, tires, repairs is all expensed out every month and therefore as a lump sum at the end of the year. So now you have a lump sum which is your "actual" expenses. If you want, you can just take that number. You can also add the total miles driven in the year, and need documentation to prove if you get audited, and take it times I think $0.34/mile. Then you pick one. Whichever benefits you more, that's what you take. Theres a whole lot of funny rules on this too - an accountant would be good to explain. You pick one of them in the first year and I think you're stuck with it for the life of the vehicle. This is why I have someone who does taxes for me. But the answer to your question is yes you should track it. Probably the simplest thing for all receipts is something like an alphabetical accordion file - at least just to store them in some kind of order. If my number is right, then 12000 miles = $4080. I'm already over $4k actual for the year, and haven't come close to 12K miles, so know which way I'm going.
"There is always inequity in life. Some men are killed in war and some men are wounded, and some men never leave the country. Life is unfair" J.F.Kennedy
The mileage deduction, in most cases, will benefit Uncle Sam. In my own case, just some year-to-year variations in where my jobs were (in town or on a country gravel road out in the sticks) will affect fuel usage and tire wear to the point that the 34 cent deduction isn't even close....it's just easy.
Jules Quaver for President 2004
All good advice here.
BUT, it is very hard to have 100% business use of a truck.
In most case you will have commuting expesnes where are personal.
If you have an office or shop at home and do a spend a significant amount of time at that location then that can be your first and last business stop of the day and it is all deductable.
Or if you have a shop another place and leave the truck their and drive a different vehical to the workplace then it is all decutable.
But otherwise the first and last trip of the day or personal. So you need to keep the different milage for those.
You might want to visit with your tax person NOW when they have the time to discuss this and how to track the info.
According to the man who does my taxes, the rule of thumb is, if I intend to keep a work vehicle after it's paid for, I need to take the mileage deduction from the beginning. If not, I'm better off itemizing the expenses. Besides two crew trucks that don't get driven unless there's work involved, I have my work vehicle and one I use some for work but mostly for personal. I tend to get a vehicle I like and then drive it till it won't drive anymore. My current work vehicle is a 1993 Dodge D-350 diesel, with 330,000 miles, and was paid for in 1996. I make out like a bandit taking the mileage deduction. The oil-change receipts all have the mileage reading on 'em, and that's what I use as proof of mileage.
Mac