Standard Mileage Deduction
- Thread starter Margie
- Start date
THE CCM/CCA IS IRS CCA 1997-40 (11/5/1997 WHICH PROVIDES THAT
"VEHICLES USED IN A TRADE OR BUSINESS OF PROVIDING COURIER SERVICES ARE NOT "FOR HIRE" IN THIS CONTEXT, HOWEVER, SINCE THERE USE IS MERELY INCIDENTAL TO THE PREFORMANCE OF SERVICES AND THEY ARE UNAVAILABE FOR THE CUSTOMERS PHYSICAL USE."
tHE ONLY WAY THAT A COPY OF THIS CCA CAN BE REICEVED IS BY CONTACTING YOUR LOCAL IRS OFFICE TO OBTAIN A COPY OF THAT CHIEF COUNCIL ADVISE
BECAUSE YOU ARE NOT FOR HIRE THEN YOU MAY USE THE STANDARD MLEAGE METHOD TO SUBSTANTIATE YOUR EXPENSES. CURRENTLY, IN 2005 ALL MILES ARE FIGURED AT $ .405 PER MILE.
IF YOU USED ANY OTHER FORM OF DEPREICATION ON YOUR VEHICLE THE STANDARD MILEAGE IS NOT AVAILABLE TO YOU. YOU CAN ONLY USED EITHER DEPRECIATION OR THE STANDARD MILEAGE RATE IN THE YEAR THE VEHICLE IS PURCHASED AS NEW.
Additional information is in the tax forum
Davekc
"VEHICLES USED IN A TRADE OR BUSINESS OF PROVIDING COURIER SERVICES ARE NOT "FOR HIRE" IN THIS CONTEXT, HOWEVER, SINCE THERE USE IS MERELY INCIDENTAL TO THE PREFORMANCE OF SERVICES AND THEY ARE UNAVAILABE FOR THE CUSTOMERS PHYSICAL USE."
tHE ONLY WAY THAT A COPY OF THIS CCA CAN BE REICEVED IS BY CONTACTING YOUR LOCAL IRS OFFICE TO OBTAIN A COPY OF THAT CHIEF COUNCIL ADVISE
BECAUSE YOU ARE NOT FOR HIRE THEN YOU MAY USE THE STANDARD MLEAGE METHOD TO SUBSTANTIATE YOUR EXPENSES. CURRENTLY, IN 2005 ALL MILES ARE FIGURED AT $ .405 PER MILE.
IF YOU USED ANY OTHER FORM OF DEPREICATION ON YOUR VEHICLE THE STANDARD MILEAGE IS NOT AVAILABLE TO YOU. YOU CAN ONLY USED EITHER DEPRECIATION OR THE STANDARD MILEAGE RATE IN THE YEAR THE VEHICLE IS PURCHASED AS NEW.
Additional information is in the tax forum
Davekc
I have a problem with the section of CCA 1997-40 that states "This result may change under extenuating circumstances...if the taxpayer's payment is primarily based on the number of miles driven" This part makes me think it might not be accepted. For this reason, I was hoping that there was someone out there that has been audited and received some sort of proof that it is acceptable.
Margie.
You must have a copy of the Chief Council's Advise (CCA) because you quote this interesting document accurately. Keep in mind that this CCA is an advisory document and it differs from the more meaningful IRS Ruling. Lacking a formal ruling on this issue we can only rely on the Chief Council's and our collective interpretaions of the content of IRS regulations pertaining to the business use of a vehicle. Some info, for starters, is contained at www.irs.gov/taxtopics/tc510.html
I think that if you are paid a percentage of the customer's tarrif, you are clearly not considered to be paid based on the number of miles driven. The questionable area is those of us paid by the mile. I would interpret the manner of our business such that none of us are paid by the mile, rather we are paid by the job. You typically are not paid for most of your deadhead to the job (pickup) nor are you paid from the job (delivery) to the layover point. So allthough a part of the whole is based on mileage, the job itself is a flat rate.
Given that our tax system allows you some interpretation flexibility, I have chosen to use the standard mileage rate for many years. In the event I am audited, I will attempt to convince the auditer that my Standard mileage is deductable. In the event it is determined, after appeals, I am wrong, I am prepared to provide all the documents related to depreciation and the actual cost of operations.
Best wishes for your choice.
Terry
You must have a copy of the Chief Council's Advise (CCA) because you quote this interesting document accurately. Keep in mind that this CCA is an advisory document and it differs from the more meaningful IRS Ruling. Lacking a formal ruling on this issue we can only rely on the Chief Council's and our collective interpretaions of the content of IRS regulations pertaining to the business use of a vehicle. Some info, for starters, is contained at www.irs.gov/taxtopics/tc510.html
I think that if you are paid a percentage of the customer's tarrif, you are clearly not considered to be paid based on the number of miles driven. The questionable area is those of us paid by the mile. I would interpret the manner of our business such that none of us are paid by the mile, rather we are paid by the job. You typically are not paid for most of your deadhead to the job (pickup) nor are you paid from the job (delivery) to the layover point. So allthough a part of the whole is based on mileage, the job itself is a flat rate.
Given that our tax system allows you some interpretation flexibility, I have chosen to use the standard mileage rate for many years. In the event I am audited, I will attempt to convince the auditer that my Standard mileage is deductable. In the event it is determined, after appeals, I am wrong, I am prepared to provide all the documents related to depreciation and the actual cost of operations.
Best wishes for your choice.
Terry
1997 Dodge Ram 3500 with 12' cube. Dock high with jackstands. 5.9L Cummins Turbo Diesel.
Correct me if I am wrong, but I thought the IRS had just bumped up the standard mileage rate from 40.5 cents per mile to 48.5 cents per mile for miles driven between 9-1-05 and 12-31-05 due to the skyrocketing fuel costs we have been dealing with.
Correct me if I am wrong, but I thought the IRS had just bumped up the standard mileage rate from 40.5 cents per mile to 48.5 cents per mile for miles driven between 9-1-05 and 12-31-05 due to the skyrocketing fuel costs we have been dealing with.
terryandrene, do you make any distinction of the type of work related miles? Do you consider all miles from the time you leave home until you return to be deductable? Or, is there a reason that, let's say, a volutary and uncompensated move after emptying to a better location might not be deductable?
>...Correct me if I am wrong, but I thought the IRS had just
>bumped up the standard mileage rate from 40.5 cents per mile
>to 48.5 cents per mile for miles driven between 9-1-05 and
>12-31-05...
That is my understanding also.
>bumped up the standard mileage rate from 40.5 cents per mile
>to 48.5 cents per mile for miles driven between 9-1-05 and
>12-31-05...
That is my understanding also.
>terryandrene, do you make any distinction of the type of
>work related miles? Do you consider all miles from the time
>you leave home until you return to be deductable? Or, is
>there a reason that, let's say, a volutary and uncompensated
>move after emptying to a better location might not be
>deductable?
I consider 100% of all miles driven, from home until return as deductable using the standard mileage rate. After a run, my miles are deductable because it's all business related. I'm repositioning for another job and/or I'm headed to a deductable meal or a deductable motel room or, perhaps, a deductable laundrymat. The fact that we aren't compensated for any mileage doesn't matter for tax purposes, so long as YOU don't separate any of that travel as purely personal.
What would you do in the following instance?
I occasionally travel in my van from Missouri to Massachusetts to visit family. The 1200 mile trip takes two days. I am not on a run, I don't get any run offers, I visit my sons for three days then relocate to Boston and get on the Boston board in hopes of getting a run.
May I take the mileage as deductable? Is the standard meal allowance deductable for two days? Five Days? May we deduct a motel enroute? Repairs to the van?
My answer to all of the above is I take the deduction because I stay available for run offers for the full five days, even though I'm not likely to get an offer near the location of my family. My Qualcomm is permanently installed in my van and I need that for the work for which I'm available; ergo, everything is deductable.
>work related miles? Do you consider all miles from the time
>you leave home until you return to be deductable? Or, is
>there a reason that, let's say, a volutary and uncompensated
>move after emptying to a better location might not be
>deductable?
I consider 100% of all miles driven, from home until return as deductable using the standard mileage rate. After a run, my miles are deductable because it's all business related. I'm repositioning for another job and/or I'm headed to a deductable meal or a deductable motel room or, perhaps, a deductable laundrymat. The fact that we aren't compensated for any mileage doesn't matter for tax purposes, so long as YOU don't separate any of that travel as purely personal.
What would you do in the following instance?
I occasionally travel in my van from Missouri to Massachusetts to visit family. The 1200 mile trip takes two days. I am not on a run, I don't get any run offers, I visit my sons for three days then relocate to Boston and get on the Boston board in hopes of getting a run.
May I take the mileage as deductable? Is the standard meal allowance deductable for two days? Five Days? May we deduct a motel enroute? Repairs to the van?
My answer to all of the above is I take the deduction because I stay available for run offers for the full five days, even though I'm not likely to get an offer near the location of my family. My Qualcomm is permanently installed in my van and I need that for the work for which I'm available; ergo, everything is deductable.
I agree. Somewhere I remember reading some debate on empty miles. The argument was if you're not generating revenue you can't deduct the miles. As far as I'm concerned it's still work related.