Self Employed allowable deductions

[slfemployeed]

What is the name of your state (only U.S. law)? Pa

Brief description

I am self employed contractor. I subcontract for home depot refacing kitchen cabinets. I travel between three states to peoples houses refacing their cabinets. My small business is located at my house. I pick up the supplies every Monday and all location material and prints from the supply house every Monday morning.

The Question.

Is mileage I am traveling to the jobs deductible off my gross business?

December when we were in for child support. The master set my personal gross income as every dollar my company brought in. They did not take off for any supplies. I had my tax return made up and it shows that my company brought in 47K in gross sales. But after deducting my business expenses it brings my total net for my business as 35K. Child support was based off 45K.

Since then we were cut back on the payout of each job. My business is bringing in 1000 dollars less a month. by the time I take out my business expenses I am down to 1800 per month. I take off the 840 dollars I am paying in child support I am down to 960. Estimate on taxes brings me down another 577 to $383 per month to live off of.

I went back to court today and they said that my mileage is not deductible as a business expense. It would be like the master deducting the tokens she paid to come to court each day. Even though I am driving over 7k miles in 5 months for business. Putting out over $100 a week in gas pulling my trailer to and from the job sites. Not to mention the wear it is putting on my truck just to tow it all over the place.

Does anyone know if PA allows business mileage as a deduction and where I can find case law on it. I have tried lexisnexis and have had no luck.

ThanksWhat is the name of your state (only U.S. law)?

 

[Silverplum]

What is the name of your state (only U.S. law)? Pa

Brief description

I am self employed contractor. I subcontract for home depot refacing kitchen cabinets. I travel between three states to peoples houses refacing their cabinets. My small business is located at my house. I pick up the supplies every Monday and all location material and prints from the supply house every Monday morning.

The Question.

Is mileage I am traveling to the jobs deductible off my gross business?

December when we were in for child support. The master set my personal gross income as every dollar my company brought in. They did not take off for any supplies. I had my tax return made up and it shows that my company brought in 47K in gross sales. But after deducting my business expenses it brings my total net for my business as 35K. Child support was based off 45K.

Since then we were cut back on the payout of each job. My business is bringing in 1000 dollars less a month. by the time I take out my business expenses I am down to 1800 per month. I take off the 840 dollars I am paying in child support I am down to 960. Estimate on taxes brings me down another 577 to $383 per month to live off of.

I went back to court today and they said that my mileage is not deductible as a business expense. It would be like the master deducting the tokens she paid to come to court each day. Even though I am driving over 7k miles in 5 months for business. Putting out over $100 a week in gas pulling my trailer to and from the job sites. Not to mention the wear it is putting on my truck just to tow it all over the place.

Does anyone know if PA allows business mileage as a deduction and where I can find case law on it. I have tried lexisnexis and have had no luck.

ThanksWhat is the name of your state (only U.S. law)?

I don't know but I googled the PA CS Calculator and FAQs and such for you, and assume you could find your answers there:

http://tinyurl.com/3zdmbb3

https://www.humanservices.state.pa.us/csws/

 

[mistoffolees]

Child support in PA:
PA Child Support Calculator | Alimony Calculator
"1. The PACSES child support calculator estimates each parent’s net monthly income by deducting their federal, state and local income taxes, FICA taxes, union dues, and mandatory retirement contributions in accordance with Pennsylvania’s child support law. The calculator does not consider itemized deductions when calculating federal income taxes; a standard deduction is used instead. Note that itemized deductions generally reduce a parent’s tax liability, so a parent who has itemized deductions may have greater net income than this program estimates."

It doesn't look like you get to deduct mileage if you are being paid as salary. Ordinarily, mileage for your commute to the workplace is not deductible.

If, OTOH, you set up a corporation which receives the payment and then pays your salary, you MIGHT be able to deduct that but it would not be easy. There are specific rules for when business mileage can be deducted, but they are not easy:
Car and Truck Expense Deduction Reminders

However, it might not make sense, anyway. In particular, creating a corporation so that you could deduct business mileage would require you to pay the employer's portion of FICA and medicare, so you probably wouldn't come out ahead.

 

[slfemployeed]

I tried finding the answers there. There is nothing specific as to what deductions are allowed. I have a lawyer, but yesterday I was told they were not going to be able to represent me today. they had an emergency come up and to ask the court for a continuance. I was laughed at. It was pretty bad. The lawyers I have spoken with said yes it is a legitimate business expense but I can't find where it is all broken down.

 

[mistoffolees]

I tried finding the answers there. There is nothing specific as to what deductions are allowed. I have a lawyer, but yesterday I was told they were not going to be able to represent me today. they had an emergency come up and to ask the court for a continuance. I was laughed at. It was pretty bad. The lawyers I have spoken with said yes it is a legitimate business expense but I can't find where it is all broken down.

See above. It MAY be a legitimate business deduction if you meet all the IRS requirements (look them up). Furthermore, it is only a business deduction if you have a corporation and are being paid as a corporation - which means that you'd have to pay all the other related costs (FICA, etc).

So how are you being paid?

 

[slfemployeed]

Child support in PA:
PA Child Support Calculator | Alimony Calculator
"1. The PACSES child support calculator estimates each parent’s net monthly income by deducting their federal, state and local income taxes, FICA taxes, union dues, and mandatory retirement contributions in accordance with Pennsylvania’s child support law. The calculator does not consider itemized deductions when calculating federal income taxes; a standard deduction is used instead. Note that itemized deductions generally reduce a parent’s tax liability, so a parent who has itemized deductions may have greater net income than this program estimates."

It doesn't look like you get to deduct mileage if you are being paid as salary. Ordinarily, mileage for your commute to the workplace is not deductible

If, OTOH, you set up a corporation which receives the payment and then pays your salary, you MIGHT be able to deduct that but it would not be easy. There are specific rules for when business mileage can be deducted, but they are not easy:
Car and Truck Expense Deduction Reminders

However, it might not make sense, anyway. In particular, creating a corporation so that you could deduct business mileage would require you to pay the employer's portion of FICA and medicare, so you probably wouldn't come out ahead.

I am already set up as an LLC. I have to have LLC and also have to have business insurance in order to be a sub for home depot. This is where I am getting killed. I have another child as well and am getting married in November. They are not considering him in any way so out of that I am suppose to be supporting him. Luckily I have an incredibly understanding fiancee (my other sons Mother) that has been supporting all of us.

 

[slfemployeed]

See above. It MAY be a legitimate business deduction if you meet all the IRS requirements (look them up). Furthermore, it is only a business deduction if you have a corporation and are being paid as a corporation - which means that you'd have to pay all the other related costs (FICA, etc).

So how are you being paid?

A check gets made out to my company name weekly. The IRS is not the issue. it is the huge chunk it is taking out for gas. I have spent over 2500 at the pump in the last 6 months as a cost of doing business. If I didn't do that I would not be making any money.

 

[mistoffolees]

I am already set up as an LLC. I have to have LLC and also have to have business insurance in order to be a sub for home depot. This is where I am getting killed. I have another child as well and am getting married in November. They are not considering him in any way so out of that I am suppose to be supporting him. Luckily I have an incredibly understanding fiancee (my other sons Mother) that has been supporting all of us.

If you are set up as an LLC, you should be filing a separate tax return for the LLC. Only the distributions or salary from the LLC count as income to you.

If the LLC meets the requirements for deducting mileage, then you can do so.

You really need an accountant to make sure that everything is handled properly and then possibly an attorney for the CS matter.

 

[slfemployeed]

Because it is a sole proprietorship LLC they wrap the personal and business tax return in as one. Even at that, They request that I bring in all the information as it pertains to the money that comes into my business to court. Plus their attorney requested copies of both my personal and business checking accounts. It has been really crazy.

 

[Silverplum]

Because it is a sole proprietorship LLC they wrap the personal and business tax return in as one. Even at that, They request that I bring in all the information as it pertains to the money that comes into my business to court. Plus their attorney requested copies of both my personal and business checking accounts. It has been really crazy.

Well, that's not at all unusual.

 

[slfemployeed]

Nothing in the Philadelphia court system is usual. If you knew what I have been through in the last year of dealing with all this. The ex is even fighting because she doesn't want me taking my kids camping every weekend down the shore. It is not because she doesn't like camping it is because she doesn't want me to be able to give the kids something she can't. Bad part is the judge is going along with her. Well that was until I got pissed and finally went off on the judge two weeks ago. Now I am waiting to hear from that to see if I get to see my kids more. 96 hours a month is too little for me. I only live 35 miles away from them. I am sure if I moved to Texas I would have more time with them then I get now.

 

[Silverplum]

Nothing in the Philadelphia court system is usual. If you knew what I have been through in the last year of dealing with all this. The ex is even fighting because she doesn't want me taking my kids camping every weekend down the shore. It is not because she doesn't like camping it is because she doesn't want me to be able to give the kids something she can't. Bad part is the judge is going along with her. Well that was until I got pissed and finally went off on the judge two weeks ago. Now I am waiting to hear from that to see if I get to see my kids more. 96 hours a month is too little for me. I only live 35 miles away from them. I am sure if I moved to Texas I would have more time with them then I get now.

Try moving to their school district, within walking distance of Mom's home, even. That will help you see them more, IMO.

 

[slfemployeed]

My fiancee has a child with down's syndrome. The county we live in is the only place in the area that has the program that is the best for her. It would be impossible to move into philadelphia school district. It is so bad. I would not want either of the other two children to suffer.

 

[LdiJ]

See above. It MAY be a legitimate business deduction if you meet all the IRS requirements (look them up). Furthermore, it is only a business deduction if you have a corporation and are being paid as a corporation - which means that you'd have to pay all the other related costs (FICA, etc).

So how are you being paid?

Misto unless I misunderstood you this answer is NOT correct. You do NOT have to be a corporation to take a mileage deduction on your federal tax returns. You just have to have legitimate mileage expense, which this OP absolutely has.

Even an employed person can take mileage expenses (not commuting expenses) if their employer does not reimburse them for mileage and/or reimburses them below the defined federal mileage rate.

 

[slfemployeed]

Per the master yes I can take it off on my taxes, but they do not consider it a business expense in pa. And can not use it as a deduction. That is why I am trying to find something somewhere that has concrete information on it. I will keep searching thanks.