Truck driver mileage deductions seems high

[tannertindell]

I just completed doing my tax, I am an owner operator Truck Driver and have covered over 152,000 business miles in 2017. I have my mileage logs and paperwork to back up my mileage but because the expense is so high (152,000*.535) my tax paperwork is reflecting a $60,000+ loss on the business part of my tax return. Is this normal? This is only our second year in business so we don't mind showing a loss but is $60,000 loss excessive? Should I not have included the cost of fuel ($75,000 roughly) in addition to mileage deduction? Thanks!

[JulieH1 · Accepted solution]

I hate to be the bearer of bad news , but the IRS considers a semi-truck to be a qualified non-personal-use vehicle. As a truck driver, you must claim your actual expenses for vehicles of this type. So, you can’t use the standard mileage method.

To deduct actual expenses for the truck, your expenses can include (but aren’t limited to):

• Fuel
• Oil
• Repairs
• Tires
• Washing
• Insurance
• Any other legitimate business expense

Other unreimbursed expenses you can deduct include:

• Log books
• Lumper fees
• Cell phone that’s 100% for business use
• License and fees for truck and trailer
• Interest paid on loan for truck and trailer

Depreciate your truck and trailer:

• Over three years for a semi-truck for regular tax — or over four years for the Alternative Minimum Tax (AMT)
• Over five years for a trailer for regular tax — or over six years for AMT

If you’re an employee, you can also deduct the expenses of traveling away from home. You’re traveling away from home only if both of these are true:

• You’re required to be away from your tax home for substantially longer than a day’s work.
• You need to sleep or rest to meet the demands of your work while away from home.

As a trucker, you’re not considered to be traveling away from home if both of these are true:

• You leave your terminal and return home in the same day.
• You have an hour off for lunch in between.

[tannertindell]

I was afraid of that, you confirmed my fear. So, I need to file form 1040X. I also excluded some deductions because my loss was so high. Can you steer me in the direction of someone who can walk me through filling out the amendment form?

[tannertindell]

Do I need to file an amendment now or wait until I get a letter from the IRS? This is not a small mistake so I want to get ahead on the process.

[JulieH1]

Hi.  Sorry.  I just started my shift.  First, you can do "fake" return on TurboTax now to see what the difference is on your return.  You will be able to do a 1040X on TurboTax in a few weeks.  The forms are not ready yet.  You will not be able to efile.  You have to send a paper file.  VERY IMPORTANT---you need to wait to get your refund before you file the amendment.    I would not spend it until you figure what you owe back. If you try to do an amendment before they process the first one, things will get very confused so wait until you get the refund but do it before 4/17/2018.
<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tips/amend-return/how-to-file-an-amended-return-with-the-irs/L6kO691...>

[tannertindell]

THANK YOU! I appreciate your help!!

[JulieH1]

By "fake, " I mean do a practice or trial return for your own reference:)

[James B]

So, why does TT 2018 ask me to enter actual expenses, then require me to enter mileage also? (Results in a ridiculous deduction) if I remove the mileage, it ignores my actual expenses, and I get zero deduction. It's entered as Truck tractor for over the toad use. That has in the past, worked fine.

[Tburg10]

I have a quick question... I have a pickup truck that is registered as a commercial vehicle.  I use it to haul trailers from state to state.   Let say, time wise I am home 50% of the month and drive it as my personal vehicle.   Of course mileage wise, I put alot more business miles on it.  Do I claim mileage or actual expenses?

[npierson7]

You can use either method as long as it's consistent. You need to track your business and personal use miles in both cases and enter them to a tax software when you calculate your vehicle expenses, If you don't provide your mileage, no deductions will be allowed for your vehicle.

If you want to use the standard mileage rate to calculate vehicle expenses, you must choose it in the first year you use the car for business. In later years you can choose to use the standard mileage rate or switch to actual expenses.

Once you use actual expenses for the vehicle (even if it's the first year you used it for business), you can't switch to standard mileage rate. You must continue using actual expenses as long as you use that car for business.

[Critter-3]

You have the option to use the standard mileage rate  OR  the actual expenses method  for the business portion of the totals.  If you started with the actual expenses method in the year the truck was placed in service you are stuck with the actual expenses method  however if you start with the standard mileage rate you can flip flop and take the better deduction in the following years.  

[Tburg10]

Thank you so much for this info. Quick question. I might drive 1500 miles in a week to deliver a trailer. I have paperwork to substantiate where I pick the trailer up and where I drop it off. Is this sufficient to calculate and claim the mileage deduction or do I need to write down my odometer and the miles I drive every day?

Thanks again.

Tom

[JohnW152]

Writing down your odometer readings would be preferred -- a mileage diary -- but since your trip was (apparently) strictly for business, you can easily re-create your route and determine mileage with online mapping tools.  

And, keep the documentation you receive.  That'll be a great source of proof for the IRS, just in case you're ever audited.

[Tburg10]

Thanks for the reply! Whenever I get home from each run, I sit down and create a printout of my expenses (downloaded from my bank), income paid for the delivery (along with paperwork from my company showing the agreed payment including how many miles I'm paid for) I break everything down and attach that to all of my company paperwork and receipts and file it away. If I drive any extra miles for personal use, I don't include those miles. Just what Google says it is from point a (pickup) to point b (delivery) and back. I hope this is enough cause I have so much to remember each morning, it never fails that I forget to look at the odometer. 🙂