Tax preparer says I can write off $90/night motel per diem!?

[lowrange]

I look around her office and I can see she's been doing this forever and a day, no rookie, that's for sure.

Really, the way she puts it, if I'm paying any income tax at all, and I certainly am, I can actually 'make money' getting a motel for $50 so that she can write off $90! She says this is different from the meals per diem we all get.

Have any of you heard anything like that!?

[Rev.Vassago]

She is wrong.

You can only write off the cost of the hotel. I would look for a new accountant ASAP. When the IRS comes to audit you, it's going to be on your shoulders to justify the fake writeoffs she is claiming.

[lowrange]

I thought that was weird. I only had seven nights in a motel. She didn't give me any indication that she's pulling things out of her ass (except for that). Like I said, she's obviously been doing if forever, seems to have a lot of experience, knows IRS personnel...but she's also working out of her cluttered home, not the most professional looking office.

I think I'm getting slammed. Only $3000 to write off my truck; no mortgage interest deduction, no home office deduction, no car usage deduction. I paid in $7k estimated taxes and I suspect it's going to be another $7k more.

[BigDiesel]

I thought that was weird. I only had seven nights in a motel. She didn't give me any indication that she's pulling things out of her ass (except for that). Like I said, she's obviously been doing if forever, seems to have a lot of experience, knows IRS personnel...but she's also working out of her cluttered home, not the most professional looking office.

I think I'm getting slammed. Only $3000 to write off my truck; no mortgage interest deduction, no home office deduction, no car usage deduction. I paid in $7k estimated taxes and I suspect it's going to be another $7k more.

Fire that imbecile right now..... you could do a better job using turbotax..

[lowrange]

I know I could have sat down with a notepad and just generated $400 in tax write offs for vehicle expenses. Maybe someone more bold would write off more. But, I really want to do this straight.

I can't get mortgage interest without buying another house as an investment...we've seen how well that has worked for a lot of people!

Home office? Man, I've got a little place. It would be a complete and utter fabrication for me to say my bedroom is actually an office. Additionally, not being a better record keeper than I am, that would be a whole nother set of receipts I'd have to track down.

What else is there? Sometimes I hear guys saying they don't pay income tax. This tax preparer commented how 'straight' everything looked that I gave her. It sounds to me like cheating on the taxes is pretty commonplace.

Why does one guy get a write off because he's paying interest on a big home while another guy doesn't get a write off because he has paid his off? That's the way it is, that's all. Point being, I want to write off everything I can without flat out lying about it...maybe I'll just need to give them $14k in taxes for 2007? Maybe that's just the way it is.

One thing about leasing for a company, there is NO revenue that stays off the books like the handyman business or many others. If we don't get ALL of our expenses, we end up paying taxes on more than we made.

Maybe what I'm paying is normal. I worked through all the moral issues :? of doing a logbook (log it like you do it...when you can :wink: ), I'm trying to understand taxes now. I won't flat out lie about anything, but I also want to make sure I get all the write offs I can possibly interpret in my favor.

And the motel write off? Like I said, it's just seven days. I questioned her about it but she was convinced. Her name will be on the return!

[mike3fan]

Point being, I want to write off everything I can without flat out lying about it...maybe I'll just need to give them $14k in taxes for 2007? Maybe that's just the way it is.

I pay in $4,000 every quarter in estimated taxes,I also asked my accountant about some of these guys that claim they never pay or pay very little and he said "all I do is input the numbers you give me".meaning if I didn't want to pay any taxes I could submit enough write offs to do it,although he said he doesn't believe they are truthful about it,me either.

Me,they can scoff all they wan't,but when the tax man comes,I will not have any trouble explaining all my deductions.

[allan5oh]

let me guess, spend $50, write off $90, to save $25 in taxes.

Sounds worth it to me.

LOL

[heavyhaulerss]

I can't get mortgage interest without buying another house as an investment...we've seen how well that has worked for a lot of people!

dont let yourself get confused with the current real estate forclosures & a second home for investment & tax purposes. I got into trucking 10 years ago & own 10 properties. without going into boring detail... every year a choice pay the tax man or pay yourself, such as 401-k or any other tax write off that is available under law. so every year I would buy a inexpensive house. put 5-6 grand down, finance 5-7 years, & deduct, mortgage % , propert tax, ins, repairs. e.t.c. next year same thing.


my gig is buying homes that cost very little & have occupants already in them paying $400- $500 a month. so instant income too. I do land contracts only, & save thousands right up front. total cost to me to purchase $150.00 includes all attourney fees & court recording & backround tax & lien check.

[lowrange]

I can't get mortgage interest without buying another house as an investment...we've seen how well that has worked for a lot of people!

dont let yourself get confused with the current real estate forclosures & a second home for investment & tax purposes. I got into trucking 10 years ago & own 10 properties. without going into boring detail... every year a choice pay the tax man or pay yourself, such as 401-k or any other tax write off that is available under law. so every year I would buy a inexpensive house. put 5-6 grand down, finance 5-7 years, & deduct, mortgage % , propert tax, ins, repairs. e.t.c. next year same thing.


my gig is buying homes that cost very little & have occupants already in them paying $400- $500 a month. so instant income too. I do land contracts only, & save thousands right up front. total cost to me to purchase $150.00 includes all attourney fees & court recording & backround tax & lien check.

Well now, we've found the real hobby trucker, haven't we!? 8) Seriously, I appreciate you sharing, giving some of the rest of us an idea how it's done. But, with all that's involved in your real estate, trucking can only be a side for you- unless next you are going to tell us you have a bunch of trucks! Don't get me wrong, I'm all for you, but I personally couldn't deal with the complexity of all that. Right now, I just want to be an owner operator- that's obviously just one of the irons you have in the fire.

[lowrange]

Point being, I want to write off everything I can without flat out lying about it...maybe I'll just need to give them $14k in taxes for 2007? Maybe that's just the way it is.

I pay in $4,000 every quarter in estimated taxes,I also asked my accountant about some of these guys that claim they never pay or pay very little and he said "all I do is input the numbers you give me".meaning if I didn't want to pay any taxes I could submit enough write offs to do it,although he said he doesn't believe they are truthful about it,me either.

Me,they can scoff all they wan't,but when the tax man comes,I will not have any trouble explaining all my deductions.

Mike, you don't know how helpful it is to have you say that!

[lowrange]

let me guess, spend $50, write off $90, to save $25 in taxes.

Sounds worth it to me.

LOL

Yeah well, now that you put it like that...

But, at least it makes what she was saying sound more plausible. When I ran it past her, I was thinking, 'you mean I actually come out ahead by staying in motels!? She really was encouraging me, "don't be afraid to stay in motels..." Could it be...nah,...she was wrong, right?

[Heavy Duty]

What else is there? Sometimes I hear guys saying they don't pay income tax

If you make money you pay. There are ways to make all your medical insurance and medical bills deductible, even if it comes from your wife's employer.It helps lower the self employment tax.
Ask about irs section 105.

if you pay no taxes, you ain't making money.

[no_worries]

I think what she was saying is that if you spend $50 on a motel you get roughly a $90 write-off...$50+$40 per diem. That is correct. However, you're getting the per diem anyway, so you certainly don't come out ahead on the deal. There is no magic write-off that allows you to save more money than you spent. The guys that claim to pay minimal taxes are doing so one of two ways; cheating on their taxes or not making any money. In most cases it's the latter. They just don't know enough about accounting or their own business to realize what's really going on.

[Rev.Vassago]

The guys that claim to pay minimal taxes are doing so one of two ways; cheating on their taxes or not making any money.

Depreciating large assets = minimal taxes. Beyond that, you are correct.

[lowrange]

Again, I appreciate the reassurances that (not lying) + (making money) = paying taxes. I don't want either the legal or the moral problems of fraud.

the tweakers, though:

mileage of your personal vehicle in support of your trucking business
home office
mortgage interest
a large asset that depreciates more than it de-values (is that possible?
something else?

I'm just trying to think about what I'm losing out on. Everyone has to do paperwork and taxes, not everyone is going to get a home office deduction.

[Rev.Vassago]

the tweakers, though:

mileage of your personal vehicle in support of your trucking business
home office
mortgage interest

All valid write offs, assuming that you actually have them and use them. I'm sure many who take the first two deductions don't actually have those expenses.

a large asset that depreciates more than it de-values (is that possible?

Sure - anyone who owns a truck has one of those. The depreciation takes the entire amount you paid for the vehicle, but the vehicle doesn't devalue down to zero. That's why when you sell the vehicle, you have to pay capital gains tax on it.

[no_worries]

Depreciating large assets = minimal taxes. Beyond that, you are correct.

You can't depreciate out more than you paid for something. You're simply recouping your costs...and not dollar for dollar. Only at your marginal tax rate. The one caveat is if you are able to sell the depreciated asset for significantly more than its residual value. In which case you owe capital gains taxes which will negate most of your excess depreciation.

You might make a little on the vehicle expense depending on what the operating costs of your vehicle are. It's likely to be pretty negligible.

Home office expense can be found money. Just remember that it's probably the single biggest red flag for the IRS when it comes to the self-employed. It also has ramifications down the road when you sell your home in terms of the capital gains benefit.

[lowrange]

Talked to my tax preparer today. She said I COULD have written off 54cpm for vehicle usage if my last tax preparer hadn't depreciated my truck. Guys, that's maybe $54,000 per year on a truck I original bought for $24,000. :shock: She said that's what postal carriers do, and they end up getting their vehicles for free.

PM if you want her number. 8)

[Rev.Vassago]

Talked to my tax preparer today. She said I COULD have written off 54cpm for vehicle usage if my last tax preparer hadn't depreciated my truck. Guys, that's maybe $54,000 per year on a truck I original bought for $24,000. :shock: She said that's what postal carriers do, and they end up getting their vehicles for free.

PM if you want her number. 8)

FIRE THIS TAX PREPARER. You can only depreciate a vehicle for what you paid for it. You can not write off "vehicle usage" on a CMV. If you do so, then you cannot claim other expenses for that vehicle (like fuel, repairs, etc.). That would be double dipping, and would get you in a boatload of trouble. A truck gets depreciated, plain and simple.

This person sounds like she has no clue as to how a trucking business works.

[Rev.Vassago]

Depreciating large assets = minimal taxes. Beyond that, you are correct.

You can't depreciate out more than you paid for something. You're simply recouping your costs...and not dollar for dollar. Only at your marginal tax rate.

Of course, but for those years that you are depreciating, you have the ability to pay minimal taxes. Once that depreciation is complete, however, the gravy train has left the building.

Rev; sees no other alternative than to buy a brand new truck every 3 years, and throw the old one away. :wink: