Our semi-annual reveiws are coming up in aplril and I want to get some facts to present for my side of the “case”.
1) Trucks vs. cars: It is clearly more expensive to drive a full size truck and haul a trailer and lumber and tools.
Does the IRS, or any else, have a rate for Work trucks?
Surely Lumber yards get more than $0.37 a mile for a 20 ft flatbed.
B)Tool costs: If I have 3000$ worth of tools and buy 1500$ worth every year, How do I figure my annual expenditures?
Certain tools get used up, while others can last years.
Any guidelines on these issues will be appreciated.
Mr T
Do not try this at home!
I am an Experienced Professional!
Replies
Hey Mr T! Are you a sole proprietorship or a corporation? I haven't checked with my accountant, but I think $1500 per year for tools would be fully expensible (dedectible) in the year you spend the money for a sole proprietorship.
Al Mollitor, Sharon MA
T-
You can choose to use the standard mileage rates, or you can charge actual expenses. In your case, the actual expenses would be far greater, and that would be the way to go. Check the forms though- if you used one method the first year you expensed a vehicle, you can't switch to the other the next year. if your started with the other method, you can switch later- I just can't remember which is which.
Bob
Any tool you buy under $2K you expense out that year. It doesn't matter if you spend $500 on tools or $60K. Per item, less than $2K, expense. Over that, depreciate it. At $1500 a year, your stash doesn't probably grow much. If after a few years though it strikes you that the garage is getting awful full, good time to revisit what the limits on your insurance are. Lots of guys start out with not a whole lot in the truck and five years down the road when it gets emptied realise that $5K for what was stored inside doesn't go very far.
For a work truck, the actual vs. mileage is a good thing to compare, but the previous poster was right. You have to pick one and (I don't remember which is which either) one of them you're stuck with.
Ain't tax time fun?
"The child is grown / The dream is gone / And I have become / Comfortably numb " lyrics by Roger Waters
OK, I know I mentioned the IRS and April, but this is not for taxes.
What I am trying to do is get more $$ out of my employer.
But I get the idea.
I use my itemized deductions to show him how much I spend on tools and truck expenses.Mr T
Do not try this at home!
I am an Experienced Professional!
If you are worth more to the company in your mind than your employer thinks then YOU have a decision to make. If the boss is not willing to give you any more money for what you contribute to the company then maybe you need to go someplace else. Work is hard, especially if you work for yourself, however I feel that the benefits/satisfaction is much greater, if not double,for those who are self employed. I don't mean to change the initial thread, but it sounds like you need to move on/up.
J.P.
Mr. T,
Cant answer those questions, but I have question for you ( sorry about hijacking the thread, will start a new one if needed). Why are you not out on your own, or running a company with a partner? Ive followed a number of your post's. Seems that you've been getting the short end of the stick from your employer......... a lot. From your post's you seem to be a decent guy, very good construction sense, good ethic, etc. Someone who I probably wouldnt mind working for or with. I know not carpenters want to have their own company ( to much paper/ people hassle), but it just seems that you would do o.k.. Just something I been wondering about....
Thanx,
M2akita