Milelage deduction

dieseldoctor · Nov 15, 2004

Have seen some references to being able to use a standard mleage deduction for a van up to 10,000 lbs GVW. The way I read the IRS law is you CANNOT do this if the van is used for hire.
(Following statement copied from IRS publication 463 section 4)
"You cannot use the standard mileage rate if you:
Use the car for hire (such as a taxi)".
Now a couple ofyears ago I was stopped by a North Carolina DOT officer and given a $25.00 ticket for not having a for hire tag on my van. He says if I do not personally own the frieght I am hauling then I have to have a for hire plate. In my area I have to go to Charlotte to get this plate. It is essentially an apportioned plate. I had to have insurance papers, my lease papers, and the form from Panther showing all the states they have permits from. Cost of the plate is the same as a regular commercial plate but on the plate it says "for Hire". Now whether or not the IRS would ever catch you I don't know but it appears that techniclly you cannot use the standard mileage deduction. Just my opinion for your consideration. Thanks! Dieseldoctor

Fkatz · Nov 15, 2004

Have seen some references to being able to use a standard mleage deduction for a van up to 10,000 lbs GVW. The way I read the IRS law is you CANNOT do this if the van is used for hire.
(Following statement copied from IRS publication 463 section 4)
"You cannot use the standard mileage rate if you:
Use the car for hire (such as a taxi)".
Now a couple ofyears ago I was stopped by a North Carolina DOT officer and given a $25.00 ticket for not having a for hire tag on my van. He says if I do not personally own the frieght I am hauling then I have to have a for hire plate. In my area I have to go to Charlotte to get this plate. It is essentially an apportioned plate. I had to have insurance papers, my lease papers, and the form from Panther showing all the states they have permits from. Cost of the plate is the same as a regular commercial plate but on the plate it says "for Hire". Now whether or not the IRS would ever catch you I don't know but it appears that techniclly you cannot use the standard mileage deduction. Just my opinion for your consideration. Thanks! Dieseldoctor

HI DIESELDOCTOR,

YOUR QUOTE IS TRUE, ACCORDING TO THE IRS, SINCE YOU ARE "FOR HIRE" QUOTE/UNQUOTE. YOU CANNOT USE THE STANDARD MILEAGE RATE. AND THE IRS DID QUESTION AND AUDIT DRIVERS OVER THE YEARS,
IF YOU GO BACK IN THE EARLIER PREVIOUS POST YOU WILL FIND MORE INFORMATION. BUT, IT IS THE SAME, BUT, TRUTHFULLY, YOU ARE "NOT FOR HIRE" DUE TO THE FACT THAT YOU DO NOT HAVE YOUR OWN AUTHORITY, AND ARE NOT ADVERITISING FOR BUSINESS ON YOUR OWN. AND AS STATED IN THE LEASE AGREEMENT WITH PANTHER, IT SAYS THAT THEY HAVE SOLE USE OF YOUR VEHICLE.!!!!!!!
THIS IS THE PART THAT THE IRS DISAGREES WITH, BUT ACCORDING TO A CCM MEMO WHICH I CANNOT FIND ANYMORE.
THE DEDUCTION WAS ALLOWED IN THE AUDITS THAT WERE COMPLETED IN 2000 AND 2001,
THE DRIVERS WERE ABLE TO KEEP THE DEDUCTION ON THERE RETURNS. TEH REASON WAS THAT THERE WAS NOT ENOUGH SUBSTANTIATION TO PROVE OTHERWISE.ACCORDING TO THE MEMO.

I LIVE IN NC MYSELF, AND I NEVER HAD TO GET A "FOR HIRE" PLATE AND STILL DO NOT HAVE ONE.
fRANK

Fkatz · Nov 15, 2004

DIESELDOCTOR,

I HAVE USED THE STANDAND MILEAGE ON QUITE A NUMBER OF RETURNS, THESE RETURNS THAT WERE COMPLETED HAVE NOT BE AUDITED AND STILL USE THE MILEAGE ON MY CARGO VAN.
THE AUDIT TRAIL OF A TRUCKER BEING AUDITED WOULD BE RED TAGS,

BUSINESS USE OF HOME OFFICE
CELL PHONE USEAGE,
EXCESS FUEL NORMALLY OVER 40% OF GROSS
RECEIPTS FOR SHOWERS, AND A PROVEN RECORD OF LAUNDRY COSTS.

LOGGED DAYS,
THEY WANT TO SEE FROM WHEN TO WHEN INCLUDING 1/4, 1/2 ETC DAYS DUE TO THE FACT IF YOU LEAVE THE HOUSE AT 2PM ON A SUNDAY, THEN THAT WOULD BE 3/4 OF A DAY NOT A FULL DAY AND RETURN AT 11AM THE FOLLOWING SATURDAY A WEEK LATER, THAT WOULD ONLY BE A 1/2 DAY. SO THE WANT INSTEAD OF BEING 2 FULL DAYS IT TURN YOU WOULD ONLY BE ENTITLED TO 6 AND 1/4 DAYS LOGGED AND ALLOWABLE DEDUCTIONABLE DAYS NOT 7, YOU MUST KEEP YOUR LOG BOOKS THEY WILL ASK FOR THEM FOR PROOF, OR IF YOU DO NOT KEEP A LOG BOOK DUE TO THE FACT THAT YOU ARE UNDER 26,000 LBS, THEY WILL ASK FOR PROOF DEFINITELY, WHICH MEANS SOME SORT OF RECORD OF BEING OUT.
i FORGOT THESE ITEMS
fRANK

dieseldoctor · Nov 15, 2004

Hi Frank,
Understand what you are saying about the mileage deduction but don't know whether to risk taking it or not. The night I got the ticket he pulled me over just south of the weight station on I-77 near the Virginia line. He had me go on up to the weight station and come inside. When he told me about the freight not being owned by me I said I figured since it was on my truck and I was responsible for it then it was my freight. A supervisor (smart #####)heard this and came over and picked up my bill of lading. He pointed to the shipper section and asked me if that was my company. Of course I said no. Then he pointed to the consignee section and asked if that was me. No again. Then he pointed to the carrier section and asked if that was me. I said yes. Then he said well, then you were hired to take this freight from this company to that company is that right? I said yes. Then he said "well how do you figure you are not for hire"? That's when I decided it was best that I shut up. The guy who stopped me proceeded to write me a ticket that cost $25.00 and said I had 30 days to get a "for hire" plate. I had to fill out the ticket with the new plate number and mail it to the state. They also informed me that I was supposed to always pull through all weight stations in NC. I still don't do that, but they can write me a ticket for not doing it if the wrong officer see's me. I had been running for over four years with a regular commercial (now designated "weighted" plate) with no problems but my luck ran out that night. When I went to the office in Charlotte to get the plate I questioned if I really needed the for fire plate and they confirmed that indeed I was supposed to have the for hire plate. The girl there read me section something or other of regulation so and so lol. Guess it's up to each person to decide if they want to get the for hire plate but I don't think there is any question that according to NC law we are supposed to have it. The next question is , will the IRS pick up on it and lower the boom. Hope you understand I am not arguing with you just telling you my experience. I appreciate you having this section of the forum and always check it out when I visit Expeditors on Line. Thanks for everything and have a great day. Dieseldoctor

theoldprof · Nov 16, 2004

Can you go into the mileage deduction a little more? I thought a mileage deduction was when you use your own vehicle for business purposes and were not compensated. Is the mileage deduction in a expediter cargo van for all miles, deadhead miles, or both? How could you claim a mileage deduction for miles you are being paid?
Thanks :+ :+

Fkatz · Nov 17, 2004

A supervisor (smart #####)heard this and came over and picked up my bill of lading. He pointed to the shipper section and asked me if that was my company. Of course I said no. Then he pointed to the consignee section and asked if that was me. No again. Then he pointed to the carrier section and asked if that was me. I said yes. Then he said well, then you were hired to take this freight from this company to that company is that right? I said yes. Then he said "well how do you figure you are not for hire"? That's when I decided it was best that I shut up. The guy who stopped me proceeded to write me a ticket that cost $25.00 and said I had 30 days to get a "for hire" plate. I had to fill out the ticket with the new plate number and mail it to the state. They also informed me that I was supposed to always pull through all weight stations in NC. I still don't do that, but they can write me a ticket for not doing it if the wrong officer see's me. I had been running for over four years with a regular commercial (now designated "weighted" plate) with no problems but my luck

Hi Dieseldoctor,
I think that you made one big mistake, he asked you 4 questions and you answered "yes" to all. the 3rd question was IF YOU WERE THE CARRIER.

First of all, I don't know who or if you are leased to: A Company and using there authority, or you have your own.
If you have your own authority, then yes, you are the carrier.and are Classified as "FOR HIRE"

If you are using the company authority, they are the carrier, AND YOU WORK FOR THEM, SINCE THERE DOT NUMBERS ARE ON YOUR TRUCK and you contract for them only, so you are not "for Hire". tHAT IS THE INTERPERTATION THAT THE LEASE THAT YOU SIGNED STATES.

As Far as the IRS is concerned, they have no way of proving if you are or not. The only time that would occur would be if your tax return would be pulled for audit. then at that time you would have to prove that you are not "For Hire" since you are leased on to a company that within the lease states that they have complete control over the loads that you receive, even though it really does not work if audited they will quote that excerpt from the publication, what you want if you are audited is if they are disallowing any deduction. YOU ALWAYS WANT TO SEE WHERE IT IS WRITTEN WITHIN THE TAX LAW THAT STATES THAT YOU CANNOT TAKE THE DEDUCTION.

FRANK

Fkatz · Nov 21, 2004

HI OLDPRO

THE MILEAGE DEDUCTION IS FOR ALL MILES EXCEPT PERSONAL USE. SO IF YOU HAVE NO OTHER VEHICLE AT HOME, YOU MUST DEDUCT THAT MILEAGE FROM YOUR TOTAL, NORMALLY WOULD BE 10-15% LESS THAN ACTUALLY DROVE,
WHAT IT BOILS DOWN TO IS LETS SAY YOU PUT ON 78000 MILES USING 15% AS PERSONAL YOU WOULD DEDUCT AROUND 65,000 AS YOUR DEDUCTION FIGURE.

FRANKLIN KATZ, ATP

theoldprof · Nov 22, 2004

Thanks for the info, Frank. Can you take mileage deduction AND vehicle and equipment depreciation both? :+ :+

Fkatz · Dec 1, 2004

Hi Oldprof

Thanks for the info, Frank. Can you take mileage deduction AND vehicle and equipment depreciation both?
theoldprof

NO YOU CAN NOT TAKE BOTH ITS EITHER ONE OR THE OTHER,
MILEAGE IS ONLY ALLOWED IN A CARGO VAN, OR BOX VAN,"B"OR "c" UNITS
MAXIMUN YEARS FOR MILEAGE IS 5YRS

YOU MUST TAKE ACTUAL EXPENSES AND DEPRECIATION ON "D" AND "E" UNITS
NO MILEAGE DEDUCTION IS ALLOWED.;SINCE IT IS OVER 10,000 LBS

FRANK

HAVE A GREAT HOLIDAY SEASON

theoldprof · Dec 2, 2004

Hello again Frank. How many years can you take depreciation? If you go the mileage route, how much is the mileage deduction? Thanks again for the info. :+ :+

Fkatz · Dec 4, 2004

Old Prof,
the mileage deduction for 2004 is 37.5 cents per mile
figure for 2005 is 40.5 cents per mile

your vehicle when you decide to either sell or trade in all the deductions weather being mileage or depreciation has to be recaptured when either is completed

you have to list the vehicle on a 4562 depreication form but do not put the cost in the box provided. leave it blank, if your using depreciation you must put in date purchased,total paid for vehicle, weather the vehicle is used 100% business, do not include the deposit. that is taken as a 179 deduction for the full amount of the deposit the balance owed is you basis in the truck.and your depreciable over 5 years for a cargo van, and 3 years with a straight or tractor, trailer is 7 years
by using this form it should automaticly carry over to either the Sch C, or 1120, 1120"S'- C, or listed on the SCh C under LLC

Frank