Writing Off Vehicle Miles in 2022 (How To Properly Take The Standard Mileage Vehicle Deduction)
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- čas přidán 22. 08. 2024
- #CPA #Taxes #vehicle
👉 My website: www.mikekellyCPA.com (Please feel free to contact me if you are seeking tax or accounting services. After discussing your needs and/or reviewing your information I can offer a quote/estimate of what it would cost to perform the work. I work with clients all throughout the United States.
Chapters (Time Stamps):
1:18 The three primary ways to boost your vehicle deductions
2:34 How to start taking vehicle deductions
3:30 Standard mileage deduction 2021 & 2022
4:18 How to track your miles properly
5:35 When you CANNOT take Standard mileage deduction
5:55 Example of the power of the mileage of the deduction
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To properly track your miles via paper or electronically consider the following:
1. What are the total miles you drove during the year.
2. Of those total miles, how many were specifically for business purposes
3. Brief description of the business purpose of the trip. (Went to see a client to perform a job, networking conference, miles to gather materials and supplies, etc.)
There are plenty of mileage tracking apps you can utilize on your phone, but ultimately use whatever method works best for you. If pen and paper works best, use pen and paper. Doesn't matter how it is tracked as long as it is tracked.
As an example if you drive 10,000 miles for business in 2022 that is a total deduction of 5,850. Assuming your combined federal federal and state tax rate is 25% it is like pocketing $1,462 in cash that you will no longer have to pay out to the government.
I’m making a series on vehicle deductions and we are going to cover actual expenses next and how to deduct the cost of your car so make sure you are subscribed to not miss it. My name is Mike kelly with Mike kelly CPA and I’m here to help you preserve your wealth and elevate your business health. See you in the next video.
To properly track your miles via paper or electronically consider the following:
1. What are the total miles you drove during the year.
2. Of those total miles, how many were specifically for business purposes
3. Brief description of the business purpose of the trip. (Went to see a client to perform a job, networking conference, miles to gather materials and supplies, etc.)
There are plenty of mileage tracking apps you can utilize on your phone, but ultimately use whatever method works best for you. If pen and paper works best, use pen and paper. Doesn't matter how it is tracked as long as it is tracked.
A great little video to teach people ways to save taxes. I tell Self employed people to keep track of all their expenses as their tax returns always seem to create tax sticker shock when you add Self employment tax with income tax. Keeping track of auto business expenses is a great start to chip away at that tax liability.
Keep up these great video. Thanks.
Thanks for commenting Dan! Self employment Taxes are brutal. A lot of my current clients are wanting to become s-corporations to eliminate the self employment tax but all else said vehicle deductions are great
Excellent video; clear and concise. And funny! Thanks!
Thanks so much Tina! Really glad you enjoyed the humor I'm going to try to make these videos more entertaining, but as concise as possible as well.
Chapters (Time Stamps):
1:18 The three primary ways to boost your vehicle deductions
2:34 How to start taking vehicle deductions
3:30 Standard mileage deduction 2021 & 2022
4:18 How to track your miles properly
5:35 When you CANNOT take Standard mileage deduction
5:55 Example of the power of the mileage of the deduction
Happy to see Chipper back! xD
Thanks! It was time to bring back the bird.
Do I track miles for Uber and Lyft when I start the trip or as I am on the road?
It states “you” have to operate less than 5 to claim standard mileage deduction. What if the taxpayers are filing married jointly, there are two taxpayers. Can they operate together up to 8 and still claim standard mileage deduction?
It’s nice to know this l wasn’t aware!
Thanks Susie! Knowledge is power.
Your presentation is very impressive.
The passive rental income for 2021 is zero, but IRS documentation says, passive rental expenses can be offset using other income such as wages, whereas in the previous tax years taxpayer cannot off set rental 0assive expenses from the other income - meaning there must be rental income to off-set the rental expenses.
But 2021 SCHEDULE 1 of 1040 form is very confusing, NOT SURE what to enter here line Lines 5, 8k, and 24b. Can you answer this question? If not, how much do you charge for consultation?
Hi Kaverappa, unfortunately I cannot easily address such a specific question without actually preparing your taxes. Your rental loss is generally not deductible against your wages, and other forms of income unless you are a real estate professional. Most people are not. There are a few exceptions to the rule, but it is complicated to try to explain here. Line 5 of schedule 1 applies to rentals, but I would be unable to tell you what number to enter on that particular line of course because I am not preparing your tax return. Hope that helps. I do not generally do consultations for specific tax preparation assistance. Those are not the type of engagements I prefer to take on if I am being honest. however, if someone engages with me to prepare their tax return I am happy to do so as long as I have capacity.
Best,
Mike
Enough with all these deductions. Pay your taxes people so the government can afford their bills and not have to print all this money and create inflation
Hahaha 😂, that’s a good one!
Omar, thanks for commenting. From observing the government over the past 25 years I do not think they have any interest in proper money management regardless of how much tax revenue they collect. These are all legal deductions from the tax code they helped design and passed through congress.
@@MoneyandLifeTV Agreed. But why doesn't the IRS provide taxpayers with clear explanations as to their interpretation of how to comply with the tax code and tax form examples of exactly how the deductions are taken? Either by direct phone explanations or through their publications. Is it because the tax accountant lobby wants it that way?
I'll pay more when all those billionaires start paying something above 0.
Love this mike thanks for the info!!
My pleasure Maria! Thank you!
That's crazy you can't count the mile driving to and from work even though you're still a independent contractor. I'm serving them, they are my client technically. I just don't understand why that doesn't count but driving to some ones house to clean it does.
Cool. I’m about to start driving for ride share apps uber & lyft and it seems the standard mileage deduction is the way to go. Especially if you plan to drive an insane amount of miles like I intend to do. Like 12 or more hrs a day 6 days a week. My goal is to make $1,500 minimum a week driving here in the busy NY market. That’s be about $78,000 gross. So lets say I put 1,000 miles a week on my car or 52,000 miles a year. That’s 52,000 x .58 = $29,000 deduction. So basically instead of paying $19,500 in taxes, I’d be paying roughly $12,250 right?
Hi Regan, your understanding of the mileage calculation is correct. As far as the net tax savings goes it depends on your marginal tax rate. So if you had a mileage deduction of $29,000 and your marginal tax rate was 22% it would save you $6380 in tax.
@@MoneyandLifeTV Cool. Thanks. I literally plan to use my car ONLY for rideshare work. Not personal. I have been car less for 20 yrs. Do everything on my bike. And hail LYFT in a pinch. Mostly my bike & public transit. My hope was to buy the electric VW Buzz as my first personal car. But that doesnt come out for another few years. I need to make money now tho. So plan to buy a prius for only ride share work. It will sit in my driveway when not working. So any miles I put on will literally all be for uber & lyft. I’ll just record the odometer at the beginning of the year & at the end and submit the total to the IRS. 😉 i’ll also submit the lyft data too.
Thanks!!!!!!
My pleasure Kate C! Thanks so much.
Can you do this if I’m employed?
Hi, unfortunately no, you have to be an independent contractor or be operating a business.
HOME to THRIFT STORE is 10 miles, I buy stuff to resell, and drive back HOME 10 miles. How many miles can I deduct? 10 or 20? Thx!
Do you report this sales activity on schedule C I presume? In this instance I would say the round trip is deductible since your home is primary business location.
@@MoneyandLifeTV This will be for ebay and related selling apps, on schedule C, so getting the round trip is awesome! Thank you!
My pleasure :)
@@MoneyandLifeTV If you don't keep an office at home that you use regularly and EXCLUSIVELY for your business, none of those miles will withstand an audit. The IRS will consider them commuting miles. BTW I did not say you must take the home office deduction for the IRS to consider them deductible business miles rather than non deductible commuting miles. Only that you must maintain a home office and use it regularly and EXCLUSIVELY for your business AND you have no other place where you regularly do business. But I personally believe it's best to claim the standard home office deduction in such circumstances because doing so makes you less of a target. But that's JMHO. Don't kill the messenger.
I’m a little late but I’m a an w2 employee of a company that requires me to have a truck and home office. And travel to cell sites. Am I able to claim this miles and house expenses?
Hi James, unfortunately for Federal purposes you would not be able to. However, you may be able to for your State. Check your state tax laws as sometimes states will differ from Federal rules.
Hello, i am a travel nurse, and I am employed by a travel agency. Can i still deduct travel mileage when i file taxes? Thanks!
Hi, great question. Unless you operate as an independent contractor you would not be able to take the mileage deduction unfortunately
Oh Lord. I just saw something on your screen on the IRS website. I currently have 4 vehicles I use for rentals under an LLC and just bought the 5th. That kicks me out of the standard mileage deduction zone. I was hoping to use standard deduction as my renters are puting lots of mileage on the cars. what is your recommendation? maybe resell the new car I bought. I don't plan to scale in next 3 years
Hi Ochicoloto, you do not necessarily have to sell, but you can take a car out of service. Otherwise you are stuck doing a lot of actual expense tracking unfortunately. Is there another business you own and operate that you could transfer one of the cars to?
@@MoneyandLifeTV the only option I have is to sell one of the vehicles or create a second LLC if that is allowed. Is the cap on the number of vehicles on the LLC or the LLC owner? If it is on the owner, can I create second LLC in my wife's name If we file Jointly?
@@MoneyandLifeTV if I transfer one of the vehicles to another business, will I not still be at the hook for having 5 cars? Is that cap per individual or per business?
Hmmm -m I might have to start a "Side Hussle" - because I DIXSLIKE pasying Taxes - 💵 💵 💵 💵 💵
Hey Ken! Yes sir, it is like getting a 20 - 30% discount on gas haha. If I was still employed I would be making about $100 - $200 less per month just due to fuel costs. At least with operating a business most miles can be deducted.
Excellent information, but please remove all the short funny videos. It is annoying and unnecessary to make your point.