Schedule c's double deuction

[Lucho]

This is my first year working on extensions for clients. Maybe I forgot how to use the program too.

My question is this: My client (trucking business owner) is claiming the total miles instead of actual expenses; Schedule C line 13 is showing $amount as depreciation and I know it should not because miles expenses will also include depreciation expense (becoming part of the total on line 9) Am I right or wrong?

I just discarded the asset entry form and I am using line 9 from the down tab menu of Sch. C

Can someone help me straight this up.

Thank you in advance

[kcjenkins]

Well, it depends on whether this is an auto, a pickup, etc, or whether it is a V1 or V4 truck. Read Pub 463 page 17 where 'a car' is defined. A truck used to haul property is not one that you can use the standard mileage rate on. See the list of what is NOT INCLUDED as 'a car'. It is a trucking business, you said, so while a service truck might qualify, the truck used to haul things for payment would not.

[TaxmannEA]

I believe that a trucking business must use actual expenses. The mileage deduction is not available for heavy trucks. Therefore depreciation would be properly taken, along with the actual expenses for fuel, repairs, etc. It looks like your client is trying to take a short cut to avoid actually having to account for the actual expense. (No books, perhaps?)

[Lucho]

Well, it depends on whether this is an auto, a pickup, etc, or whether it is a V1 or V4 truck. Read Pub 463 page 17 where 'a car' is defined. A truck used to haul property is not one that you can use the standard mileage rate on. See the list of what is NOT INCLUDED as 'a car'. It is a trucking business, you said, so while a service truck might qualify, the truck used to haul things for payment would not.

Well, what you and Taxman say make sense. Now I know how to proceed.

Thank you very much.

I never thought That I was going to have big headaches doing taxes in october.

good night

Lucho

[Lion EA]

So many problems show up now. The easy ones were able to get their stuff together earlier. I was just faxed a 26-page K-1.

[kcjenkins]

Glad we could help. Make sure you explain to the client that if he is going to operate a business, he needs to do it in a business-like manner. Keeping the necessary records is simply part of that. It may seem like a pain, but frankly, it's better in the long run. Because knowing how much he is spending is part of knowing how much he must charge to be profitable. You'd be surprised how many new businesses need to have that explained to them. They tend to just think that they know it, but when they start keeping better records, they discover that they have underestimated some things and overestimated others.

[Lucho]

Glad we could help. Make sure you explain to the client that if he is going to operate a business, he needs to do it in a business-like manner. Keeping the necessary records is simply part of that. It may seem like a pain, but frankly, it's better in the long run. Because knowing how much he is spending is part of knowing how much he must charge to be profitable. You'd be surprised how many new businesses need to have that explained to them. They tend to just think that they know it, but when they start keeping better records, they discover that they have underestimated some things and overestimated others.

Thank you KC.

Let's see what happens tomorrow evening (time when I usually do my practice) with another new client on extension.

[Lucho]

So many problems show up now. The easy ones were able to get their stuff together earlier. I was just faxed a 26-page K-1.

OH!

I also had to dig into the whole 2007 12 bank statements of another client to find totals for some of the business expenses. He ralized my effort and paid me extra. Good luck to you.

Lucho

[RitaB]

So many problems show up now. The easy ones were able to get their stuff together earlier. I was just faxed a 26-page K-1.

Yikes!

One called yesterday: If I get my stuff to you by the end of the week... blah, blah, blah...

Same guy called Aug 8, cause he thought return was due Aug 15.

I've not even heard anything from about half of mine that got extensions. I am soooo thankful for extensions; I would lose my mind if I had to deal with this group in April. Around here, it's not so much that the returns are difficult, but the people sure are!

[Bart]

Same guy called Aug 8, cause he thought return was due Aug 15.

You should have told him at that time that the return IS due by Aug 15.

[RitaB]

You should have told him at that time that the return IS due by Aug 15.

Yes, you are right - I will remember that when this happens again next year with him, cause you know it will...