To keep track of gas mileage or not, that tis the question.

[rzach41]

Hey all,

I am in the very beginning of my RE journey. Just recently I met some local real estate investors who I am now bird dogging for. For those unaware of the term, I go out and find distressed properties that fit the investors criteria. If the property will work, I get paid. Here is my tax question:

Should I keep track of the number of miles I drive when bird dogging?

(example)
Start Mileage: 112,045
End Mileage: 112,098
Total Distance Driven: 53 miles
Purpose of Trip: Bird dog for investor "insert name here"
Starting Time: 3:30 PM
End Time: 5:45

I would like to know if my gas can be written off as a "business" expense come tax time.
Thanks for reading,
Ryan

 

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[JesseO]

Short answer: Yes =)

 

[Redshft]

absolutely!

 

[thecoach]

I don't know how the tax laws are where you are from but the easiest way to explain it is:

Any expense that you incure for the purpose of doing business can be written off. With the mileage specifically, where I'm from, you can't write off the mileage going from your home to your office or from your office to home (If you have a fixed office), but any other trip that you need to do to make money should be able to be written off.

 

[rzach41]

Thank you to everyone who replied so fast, I appreciate it

Looks like I will be keeping track of my gas expenses. :coffee:





Ryan

 

[Bilgefisher]

In Diane Kennedy's book "Loopholes of the Rich", she outlines over 300 business deductions. Yep, thats the same book that is free for fastlane members.

 

[Diane Kennedy]

Thanks Bilgefisher -

On the mileage question: There are two ways to deduct auto expenses:

Cents per mile (just about to go to 50 1/2 cents per mile)
Percentage of business use

If it's cents per mile, that's all you get - you can't also deduct gas, tires, etc...

Percentage of business means you deduct based on the percentage of business use (compared to all miles) applied to all car expenses - tires, gas, oil, depreciation, interest (if car is financed)

Business use is only "business location to business location", so as stated earlier commuting miles don't count. TIP: If you have a legitimate home office, you can then deduct the drive from the home office to another business location.

 

[Megan H]

Just chiming in ... I keep a tiny notebook in my car(s) to track mileage. I've trained myself to write in it as soon as I get back into the driveway from a trip. It beats trying to resurrect it at a later date. The IRS looks at that, too - I've seen cases where they cross-examined a mileage log against other expenses to see if things add up - i.e., if you went 35 miles for lunch and recorded it, where's the lunch receipt? 3 days later? Ahh ... well maybe you didn't drive as much as you thought, then, and so on.

Megan

 

[Allthingznew]

On the mileage question: There are two ways to deduct auto expenses:

Cents per mile (just about to go to 50 1/2 cents per mile)
Percentage of business use

How do you calculate percentage of use?

Business miles driven / Total miles driven = % business use?

Ex:
5,000 business mi/15,000 total mi = 33%

Total vehicle expense: $1,500

$1,500 x 33% = $495 deduction?

 

[Diane Kennedy]

How do you calculate percentage of use?

Business miles driven / Total miles driven = % business use?

Ex:
5,000 business mi/15,000 total mi = 33%

Total vehicle expense: $1,500

$1,500 x 33% = $495 deduction?

That's exactly the methodology. For vehicle expenses include: gas, oil, repairs, tires, car insurance, interest (if the car is financed), depreciation

 

[thecoach]

I keep a tiny notebook in my car(s) to track mileage.

You can buy mileage logs at most business supply stores (Staples, office Depot, etc). I personally just made up a sheet on Excel and put it in a binder and keep in on my dash board. Just list the heading across the top and you're good to go:

Date - Start trip (enter in odometer reading when you started) - end trip - total (total miles/km's for that trip) description (met with the Jones's...beer run before the football game, etc) - type (business/personal)

Makes it very easy for tallying too.

 

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[Russ H]

Back in the day when I drove a lot for work-related things, here's what I did:

Had a small mileage book in the car, w/a pen.

On Jan 1st each year, I went out to each vehicle and stuck in a new book and pen, and recorded the mileage.

EVERY trip I took, I recorded. It's easy once you get the hang of this-- just takes seconds (eg, starting mileage: 33585 Go to Office Depot 33589 Go to Walmart for cleaning supplies 33593 Walk to lunch)

And I'd put any business receipts in the book--in order of getting them.

At the end of each month, the receipts got transferred to my office.

At the end of the year, I had a record of expenses (receipts) that tracked perfectly with where I was-- just look at Tue, Sept 3, at my Office Depot receipt and you could find a matching entry in the mileage log!

Again, once I got the hang of writing down each place I went to, it was a snap. Took no time at all.

And it gave me an awesome paper trail-- perfect for writing off my vehicles as business expenses.

-Russ H.

PS Having a home office didn't hurt, either.