Dead Head miles a Deduction?

buddy · Jul 9, 2009

I have been thinking...(imagine that). Let me give a couple of senarios.

You are a driver for an owner and your carrier wants you to deadhead x number of miles and your carrier will only offer x number of cents per mile (and even then after certain number of miles before they start to pay DH miles), in which cover the costs. Is my time /miles driven a deduction?

Lets say I'm an owner and I determine it costs me $0.70 per mile and I may or may not recieve any monies for DH. Are those DH miles a tax deduction?

I hope I havnt confussed anyone and I know I should have asked this in the tax forum, I realized that after writting.
Hope to get some feedback!! Thanks

ATeam · Jul 9, 2009

See IRS Publication 535, "Business Expenses."

We deduct the costs of operating our vehicle in each tax year. We do not deduct deadhead costs trip by trip. We do not deduct the cost of our time. Since we paid nothing for it, it is not an expense that can be deducted.

OntarioVanMan · Jul 9, 2009

But it is a deduction if in a Van and you take actual miles as a deduction.....we get .58 for every mile driven loaded or not, while we are on duty!

arkjarhead · Jul 9, 2009

OntarioVanMan said:
But it is a deduction if in a Van and you take actual miles as a deduction.....we get .58 for every mile driven loaded or not, while we are on duty!

Let me get this straight. For the sake of argument if you could keep your cost per mile in your Sprinter below .58 per mile (hypothetically) you could make a small profit even on deadhead and empty moves?

DannyD · Jul 9, 2009

arkjarhead said:
Let me get this straight. For the sake of argument if you could keep your cost per mile in your Sprinter below .58 per mile (hypothetically) you could make a small profit even on deadhead and empty moves?

Sort of. You wouldn't make a profit as in get a refund. Lets say you had a 100 mile paid run w/ 100 miles of DH. The run pays $1.00 mile w/ no DH pay. That's $100. He's driving 200 miles, so he gets .58 per mile as a write off. That's $116 he gets to take off his taxes.

So he shows a loss of $16. He won't get a $16 refund, but he won't owe any taxes.

So you're not going to make anything if hypothetically all you ever did was DH. But the DH miles you drive can be taken off any profit on paying runs you have.

Hope this helped some.

arkjarhead · Jul 9, 2009

DannyD said:
Sort of. You wouldn't make a profit as in get a refund. Lets say you had a 100 mile paid run w/ 100 miles of DH. The run pays $1.00 mile w/ no DH pay. That's $100. He's driving 200 miles, so he gets .58 per mile as a write off. That's $116 he gets to take off his taxes.

So he shows a loss of $16. He won't get a $16 refund, but he won't owe any taxes.

So you're not going to make anything if hypothetically all you ever did was DH. But the DH miles you drive can be taken off any profit on paying runs you have.

Hope this helped some.

So if the next run pays $116 then the $16 refund would come off and he would only have to pay taxes on $100? If that is how it work I think I understand.

chefdennis · Jul 9, 2009

I don't deduct DH miles or my time..if you are driving for an owner you might and the way OVM showed it, i think would only work for an O/O not driving someone elses van.

And while iam not sure, i think if you deducted Dh miles , you would have to reduce your vehicle depreciation by that amount...

LOL i am not sure of any of the above other then what i do, again, you need to be talking to a good accountant that understands our business....

DannyD · Jul 9, 2009

The $16 would then come off the next run yes. Plus of course any miles he went on the next one.

But also, like Dennis said, this only applies to an owner/operator. Whoever owns the van gets the write off. I missed the part about driving for someone.

That's one reason why drivers of vans so rarely work out unless it's father/son that type of thing. The gov. will double dip on driver & owner in taxes. There's other reasons of course, mainly not enough income to support 2 people. But that's one of em.

If a driver of the van makes 60% of that $100. He pays taxes on his $60. The owner prolly won't pay anything because the milage deduction will exceed any profit he makes. Yet the owner isn't given any refund once they zero out.

Moot · Jul 9, 2009

I use total odometer miles for the year. I then subtract all personal miles like canoe trips and hauling junk for my kids. The remaining miles are business miles which includes; loaded, empty, deadhead etc.

nightcreacher · Jul 18, 2009

you can either take the irs of 58cpm deduction,or the actual money paid out for deduction.your dead head miles are figured with your total miles,then you take out your expenses either way.I meant to say that was for vans,others can't use the mileage deduction,although a good friend of mine did years ago,and never got cought

Dakota · Jul 18, 2009

Straight trucks have to use actual expenses, we don't get the cpm tax break just actual expenses

OntarioVanMan · Jul 19, 2009

the first tax year vans can elect actual expenses OR the mileage deduction.....but once you chose one there is no changing your mind....

Dakota · Jul 19, 2009

OntarioVanMan said:
the first tax year vans can elect actual expenses OR the mileage deduction.....but once you chose one there is no changing your mind....

I would think that mileage deduction is the better deal unless fuel hit 5 a gallon

Crazynuff · Jul 19, 2009

The curb weight limit for vehicles claiming per mile is 6,000 lbs. Sprinters are listed at 5800 lbs.

OntarioVanMan · Jul 19, 2009

Dakota said:
I would think that mileage deduction is the better deal unless fuel hit 5 a gallon

The mileage deduction is always better if you have a new van....because there are very little expenses related to mechanics in the first couple years normally.

Fkatz · Jul 20, 2009

Hi All,

Again there seems to be confict in which Deduction is Correct for your type of Truck, Here is the actual breakdown of what can take the Standard Mileage Deduction!!!!

All vehicles Over the Road UP TO 10,000 LBS. can use the Standard Mileage Rate.
this includes all miles traveled except for personal use. Average 15% DEDUCTION UNLES YOU KEEP EXACT MILEAGE USE FOR PERSONAL.
Includes the following vehicles.

CARGO VANS,
Sprinter Vans, Pick-up Trucks w/12-14FT boxes, Cargo Vans with 12-14ft boxes,
Again GVW under 10,000 lbs
The STANDARD MILEAGE DEDUCTION IS ALLOWED
If you do not select the standard mileage rate, you must take Depreciation and Actual expenses , 5 years with a 4 year life.

All trucks over 10,000 GVW must use Depreciation and Actual Expenses

Light General Purpose Trucks:
Includes trucks for use over the road (actual weight less than 13,000 pounds)
5 YEARS WITH A 4 YEAR LIFE Heavy General Purpose Trucks:
Includes heavy general purpose trucks, concrete ready mix-trucks, and ore trucks, for use over the road (actual unloaded weight 13,000 pounds or more)

6 YEARS WITH A 5 YEAR LIFE
Tractor Units for Use Over-The-Road
3 YEARS WITH A 4 YEAR LIFE

Trailers and Trailer-Mounted Containers
5 YEARS WITH A 6 YEAR LIFE

ALL AT STRAIGHT LINE DEPREICATION this gives you the fullist available depreciation amount each year.

If you use the standard mileage rate it normally is the best deduction in the amounts used

YOU CANNOT USE BOTH DEPREICATION AND THE STANDARD MILEAGE RATE.

IF YOU USE THE STANDARD MILEAGE DEDUCTION FOR THE FULL 5 YEARS, AFTER THAT PERIOD THERE IS NO DEPRECATION AVAILABLE, AND YOU MUST USE ACTUAL EXPENSES.
THE VAN IS CONSIDERED FULLY DEPRECIATED

REMEMBER, IF YOU TRADE IN YOUR TRUCK OR SELL IT OUTRIGHT YOU MUST RECAPTURE ALL DEPRECIATION AND A VERY GOOD POSSIBITY OF PAYING CAPITAL GAINS TAX.

iF YOU START WITH THE STANDARD MILEAGE RATE AND DECIDE TO SWITCH TO ACTUAL EXPENSES YOU CANNOT SWITCH BACK TO THE STANDARD MILEAGE RATE.
iF YOU USE ACTUAL EXPENSES YOUR CANNOT EVER TAKE THE STANDARD MILEAGE RATE. YOU MUST STAY WITH THE DEPREICATION AND ACTUAL EXPENSES THROUGHOUT THE TIME THAT YOU KEEP THE TRUCK, ONCE YOU CHANGE TRUCKS YOU CAN DECIDE WHICH DEDUCTION TO TAKE.

If you have any additional questions please do not hesitate to ask on the tax formum.

Franklin Katz, ATP,PA, CPB
Frank’s Tax and Business Service
120 York Rd
Kings Mountain, NC 28086-3151
(704) 739-4039
Fax: (704) 739-3934

Providing Professional Accounting Services and Income Tax Preparation
Circular 230 Disclaimer – Any tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or tax-related matters addressed herein.

Yesteryear · Jul 20, 2009

If you are a driver that drives for an owner operater (you do not own your truck or van) you do not get to claim milage. You can only claim milage if you own the vehicle.

Yesteryear · Jul 20, 2009

Fkatz, if you read the original post from what I can understand he is saying he is a driver that does not own the vehicle that he is driving. It is my understanding you can only claim milage if the vehicle belongs to you, not to someone else. Would not the actual owner be the one that gets to claim the milage? If I'm wrong then I need to re-file my taxes for the past three years and take the milage credit?

Fkatz · Jul 23, 2009

The threads above answers at the end of your questions!
07-09-2009, 10:41 AM #1 (permalink)
buddy
Member
Join Date: Mar 2008
Location: Michigan
Posts: 38
Dead Head miles a Deduction?

I have been thinking...(imagine that). Let me give a couple of senarios.

You are a driver for an owner and your carrier wants you to deadhead x number of miles and your carrier will only offer x number of cents per mile (and even then after certain number of miles before they start to pay DH miles), in which cover the costs. Is my time /miles driven a deduction?

Lets say I'm an owner and I determine it costs me $0.70 per mile and I may or may not recieve any monies for DH. Are those DH miles a tax deduction?

I hope I havnt confussed anyone and I know I should have asked this in the tax forum, I realized that after writting.
Hope to get some feedback!! Thanks
__________________

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Wheatland Music Organization

07-09-2009, 01:09 PM #2 (permalink)
ATeam
Senior Member

Join Date: May 2003
Location: Minnesota, USA.
Posts: 4,001
Re: Dead Head miles a Deduction?

See IRS Publication 535, "Business Expenses."

We deduct the costs of operating our vehicle in each tax year. We do not deduct deadhead costs trip by trip. We do not deduct the cost of our time. Since we paid nothing for it, it is not an expense that can be deducted.
__________________
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Expediter Since 2003, Team Driver With Wife Diane
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Last edited by ATeam; 07-09-2009 at 01:12 PM.

ATeam

07-09-2009, 01:29 PM #3 (permalink)
OntarioVanMan
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Join Date: Feb 2003
Location: Bison, South Dakota, U.S of A.
Posts: 6,746
Re: Dead Head miles a Deduction?

But it is a deduction if in a Van and you take actual miles as a deduction.....we get .58 for every mile driven loaded or not, while we are on duty!
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07-09-2009, 01:44 PM #4 (permalink)
arkjarhead
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Join Date: May 2006
Location: Monticello, AR, USA.
Posts: 2,462
Re: Dead Head miles a Deduction?

--------------------------------------------------------------------------------

Quote:
Originally Posted by OntarioVanMan
But it is a deduction if in a Van and you take actual miles as a deduction.....we get .58 for every mile driven loaded or not, while we are on duty!

Let me get this straight. For the sake of argument if you could keep your cost per mile in your Sprinter below .58 per mile (hypothetically) you could make a small profit even on deadhead and empty moves?
__________________
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Last edited by arkjarhead; 07-09-2009 at 01:45 PM. Reason: typo

07-09-2009, 05:27 PM #5 (permalink)
DannyD
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Join Date: Dec 2004
Location: Flint, Michigan, USA.
Posts: 375
Re: Dead Head miles a Deduction?

--------------------------------------------------------------------------------

Quote:
Originally Posted by arkjarhead
Let me get this straight. For the sake of argument if you could keep your cost per mile in your Sprinter below .58 per mile (hypothetically) you could make a small profit even on deadhead and empty moves?

Sort of. You wouldn't make a profit as in get a refund. Lets say you had a 100 mile paid run w/ 100 miles of DH. The run pays $1.00 mile w/ no DH pay. That's $100. He's driving 200 miles, so he gets .58 per mile as a write off. That's $116 he gets to take off his taxes.

So he shows a loss of $16. He won't get a $16 refund, but he won't owe any taxes.

So you're not going to make anything if hypothetically all you ever did was DH. But the DH miles you drive can be taken off any profit on paying runs you have.

Hope this helped some.
DannyD
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07-09-2009, 06:22 PM #6 (permalink)
arkjarhead
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Join Date: May 2006
Location: Monticello, AR, USA.
Posts: 2,462
Re: Dead Head miles a Deduction?

--------------------------------------------------------------------------------

Quote:
Originally Posted by DannyD
Sort of. You wouldn't make a profit as in get a refund. Lets say you had a 100 mile paid run w/ 100 miles of DH. The run pays $1.00 mile w/ no DH pay. That's $100. He's driving 200 miles, so he gets .58 per mile as a write off. That's $116 he gets to take off his taxes.

So he shows a loss of $16. He won't get a $16 refund, but he won't owe any taxes.

So you're not going to make anything if hypothetically all you ever did was DH. But the DH miles you drive can be taken off any profit on paying runs you have.

Hope this helped some.

So if the next run pays $116 then the $16 refund would come off and he would only have to pay taxes on $100? If that is how it work I think I understand.

joe "batman" hodges

07-09-2009, 06:22 PM #7 (permalink)
chefdennis
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Join Date: Mar 2008
Location: Toledo, Ohio
Posts: 2,028
Re: Dead Head miles a Deduction?

--------------------------------------------------------------------------------

I don't deduct DH miles or my time..if you are driving for an owner you might and the way OVM showed it, i think would only work for an O/O not driving someone elses van.

And while iam not sure, i think if you deducted Dh miles , you would have to reduce your vehicle depreciation by that amount...

LOL i am not sure of any of the above other then what i do, again, you need to be talking to a good accountant that understands our business....
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OOIDA Member, #934277

07-09-2009, 06:36 PM #8 (permalink)
DannyD
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Join Date: Dec 2004
Location: Flint, Michigan, USA.
Posts: 375
Re: Dead Head miles a Deduction?

--------------------------------------------------------------------------------

The $16 would then come off the next run yes. Plus of course any miles he went on the next one.

But also, like Dennis said, this only applies to an owner/operator. Whoever owns the van gets the write off. I missed the part about driving for someone.

That's one reason why drivers of vans so rarely work out unless it's father/son that type of thing. The gov. will double dip on driver & owner in taxes. There's other reasons of course, mainly not enough income to support 2 people. But that's one of em.

If a driver of the van makes 60% of that $100. He pays taxes on his $60. The owner prolly won't pay anything because the milage deduction will exceed any profit he makes. Yet the owner isn't given any refund once they zero out.
DannyD

07-09-2009, 06:42 PM #9 (permalink)
Moot
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Re: Dead Head miles a Deduction?

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I use total odometer miles for the year. I then subtract all personal miles like canoe trips and hauling junk for my kids. The remaining miles are business miles which includes; loaded, empty, deadhead etc.
Moot

07-19-2009, 03:43 AM #10 (permalink)
nightcreacher
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Join Date: Jan 2005
Location: Kent, Oh, USA
Posts: 2,713

Re: Dead Head miles a Deduction?

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you can either take the irs of 58cpm deduction,or the actual money paid out for deduction.your dead head miles are figured with your total miles,then you take out your expenses either way.I meant to say that was for vans,others can't use the mileage deduction,although a good friend of mine did years ago,and never got cought
Roberts Express in 1984
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Last edited by nightcreacher; 07-19-2009 at 12:07 PM.

07-19-2009, 03:55 AM #11 (permalink)
Dakota
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Re: Dead Head miles a Deduction?

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Straight trucks have to use actual expenses, we don't get the cpm tax break just actual expenses
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07-19-2009, 04:50 AM #12 (permalink)
OntarioVanMan
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Location: Bison, South Dakota, U.S of A.
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Re: Dead Head miles a Deduction?

--------------------------------------------------------------------------------

the first tax year vans can elect actual expenses OR the mileage deduction.....but once you chose one there is no changing your mind....
__________________

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07-19-2009, 03:50 PM #13 (permalink)
Dakota
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Join Date: Nov 2008
Location: Fort Wayne, IN
Posts: 379
Re: Dead Head miles a Deduction?

--------------------------------------------------------------------------------

Quote:
Originally Posted by OntarioVanMan
the first tax year vans can elect actual expenses OR the mileage deduction.....but once you chose one there is no changing your mind....

I would think that mileage deduction is the better deal unless fuel hit 5 a gallon
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07-19-2009, 04:22 PM #14 (permalink)
Crazynuff
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Re: Dead Head miles a Deduction?

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The curb weight limit for vehicles claiming per mile is 6,000 lbs. Sprinters are listed at 5800 lbs.
Crazynuff

07-19-2009, 04:51 PM #15 (permalink)
OntarioVanMan
Senior Member
Join Date: Feb 2003
Location: Bison, South Dakota, U.S of A.
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Re: Dead Head miles a Deduction?

--------------------------------------------------------------------------------

Quote:
Originally Posted by Dakota
I would think that mileage deduction is the better deal unless fuel hit 5 a gallon

The mileage deduction is always better if you have a new van....because there are very little expenses related to mechanics in the first couple years normally.
OntarioVanMan

TO ONTARIOVANMAN,

YOU ARE IN A CARGO YOU CANNOT TAKE THE STANDARD MILEAGE RATE IF YOU DEDUCT the following. Fuel, insurance (liability, cargo, bobtail, All Repairs: Tires, Parts, labor and a any other items that pertain to the vehicle itself are NOT DEDUCTIABLE IF USING THE STANDARD MILEAGE RATE, i KNOW I AM REPEATING MYSELF.

THE STANDARD MILEAGE RATE COVERS ALL OF THE ABOVE EXPENSES
YOU STILL GET THE PER DIEM ALLOWANCE WITH THE STANDARD MILEAGE DEDUCTION

A LATER POST:

If you select the standard mileage rate when you first start out, YOU CAN SWITCH TO ACTUAL EXPENSE IN ANY YEAR UP TO THE FINAL YEAR (5 YEARS) CARGO VANS ONLY, BUT ONCE YOU SWITCH YOU CANNOT GO BACK TO THE sTANDARD MILEAGE AT ALL. UNTIL YOU PURCHASE A NEW TRUCK.

ALL OF THE MILEAGE ALLOWED OR ACTUAL EXPENSES AS DEDUCTIONS UPON SALE OR TRADE IN MUST BE RECAPTURED TO SEE IF YOU OWE AND IS SUBJECT TO CAPITAL GAINS TAX.

iF YOU TRADE YOUR TRUCK YOU USE A LIKE- KIND EXCHANGE WITH THE RECAPTURE BUT YOUR CAPITAL GAINS TAX IF ANY IS NOT CHARGED UNTIL YOU SELL OR TRADE IN THE TRUCK YOU ARE PURCHASING NEW NOW, ( THIS IS A WHOLE NEW BALLGAME. )

TO CRAZYNUFF,

The load limit is not 6,000 lbs, its 10,000 lbs loaded. what your quoting is for cars and pickup trucks not used commerically.

To buddy, and all others:

If you are able to use the standard mileage allowance, which would be only for Cargo Van drivers, It does not matter weather you are the Owner, or the Driver for an Owner,
YOU CAN TAKE THE STANDARD MILEAGE ALLOWANCE, AND
WHO EVER PAYS FOR THE FUEL IS THE ONE THAT CAN TAKE THE ALLOWANCE NO MATTER

Normally, a lot of owners with driver say they are taking the milage, let them, but you are the one paying for it. If they get audited for the allowance, they do not have the fuel receipts to prove it. YOU DO, make sure you keep them fora Min of 6 years.due to the Business part of your tax return. If you do not pay the fuel, you cannot use the deduction.

Normally if you use the standard mileage deduction between 15% and 20% of the total is allowed for personal use, and will not be used. Only if you do not use it for personal use,
doctors, shopping, take the kids to school, and the other items that were mentioned above.

The IRS DOES NOT LIKE TO SEE MILEAGES OVER 80,000 MILES AS A DEDU CTION IF THEY GET THEM IT NORMALLY WILL BE A RED FLAG FOR AN AUDIT. WHICH YOU WOULD HAVE TO KEEP A DAILY MILEAGE LOG, WHICH IS VERY HARD TO DO, BUT YOU HAVE YOUR TRIP SHEET LOG OF EACH Load, WITH DEADHEAD.

REMEMBER keep all of this paperwork for a minimun of 3 years due to the Statue of Limintations from the Filing date of your tax returns.

If you have any other question I might be able to clear up for tax purposes please do not hesitate to ask

Franklin Katz, ATP PA, PB
Frank's Tax & Business Service
120 york Rd
Kings Mountain, NC 28086 -3151(
704)) 739-4039
Fax (704) 739-3934
Cell: (704) 300-5143

mjolnir131 · Jul 24, 2009

if your paying for fuel already and taking the dedution taking an extra dedution for DH would be taking the same dedution twice which is majorly fround on by the IRS