Keeping track of my business
I understand that I need to start saving receipts for anything and everything that I could possibly justify as a shop/business expense but I am wondering about fuel costs.
Having a few different vehicles and using them for more than just business purposes has me confused.
There are a number of ways you can deal with your vehicles, fuel costs, business/personal mileage, maintenance, repair, etc.
One way is to buy mileage books for each vehicle, you can keep track of business vs. personal mileage. Business mileage is tax deductible. Presently the rate is 55.5ยข per mile.
Another way is to keep track all vehicle costs, including gas, and at the end of the year deduct the personal miles from your total miles, figure your percentage of business vs. personal miles, and deduct the like percentage ( of business mile) from your annual cost of operation per vehicle.
I do not mind pushing the envelope but I do not want to try and claim anything that is going to send up a red flag with the IRS so how do you guys keep track of your fuel costs?
I have been spending alot of time on-line figuring out the quickbooks, I ordered an older version of quickbooks (that was cheap) from E-bay just to get even better familiar with how the software is used ( cause evidently it really has not changed a whole lot at its core ) but can you guys that use it give me some examples of how you keep your receipts?
I use a "Neat" copier to scan my receipts. it allows me to not worry about losing the actual receipt, as I have a copy in both my quick books file, and my "Neat" file in my computer. I still keep the originals, but if I need to see a receipt, or if my accountant, or the government, or anyone needs to see a receipt for ANYTHING, I simply pull it up on the computer. The NEAT system also gives me a full breakdown of everything on the receipt, too. Material, labor, sales tax...
Once I am more familiar/cofident with how it is used I will order the newest version.
Assuming you have separate folders for fuel receipts, another one for shop improvement expenses, maybe another one for shop equipment ect ect but Id like to verify and hear what others are doing.
WHen you begin set up of Quick books, you can also set up various files, and accounts. For example, your shop, you'd need a "folder" for Utilities, rent or mortgage, equipment purchases, supplies, inventory, maintenance and repair, etc.
How about the building in which I am renting for the shop, I have put a tremendous amount of labor into the building, I understand that the materials are deductible ( if I had bothered to save the receipts ) but how about my labor?
Any labor ( except your own) is deductible. Pay it with a company check. It is deducted from your gross profit at the end of the year, before income taxes are assessed.
I had to build within the area a minimum 100 square foot office space ( as an example ) to be compliant with the requirements for getting a dealers license ( which I am still working on ) and so that took alot of time, seems to me that I should be able to claim something for that but according to the accountant that I am considering to use I cannot. If I had to pay someone to come in and do that office space I am sure the bill would have been approx 6000 dollars.
It would have been easier, for you, to pay someone else to do it. As the business owner, you time, is not deductible. Once again,
Any labor ( except your own) is deductible.
