Tax deductions using CC statements...

[jinduy]

I'm working as a contractor and I heard you can make deductions on your spendings, such as gas.

However, I don't have all my receipts, but my credit card statement nicely organizes all my spendings into certain categories. Would this be good enough to use as proof so I can get a deduction?

 

[WannaFly]

I'm no CPA, but i'd say no. Lots of stuff can be purchased at a gas station, your CC statement doesnt specifically show that its gas, the receipt does.

 

[jinduy]

Originally posted by: WannaFly
I'm no CPA, but i'd say no. Lots of stuff can be purchased at a gas station, your CC statement doesnt specifically show that its gas, the receipt does.

hmm good point

 

[dullard]

If you have a small self-proprietorship, then there are some nice rules that you get to follow.

1) You are often better off just taking the standard mile deduction. That is (I think) 37.5 cents per mile in 2004. Thus add up your mileage, and forget about trying to keep gas receipts, maintanence receipts, repair receipts, etc. In many cases this is easy. For example, my wife drove from home to another city to do business. She did it once a week for 50 weeks. Multiply the mileage for one trip by 50 and she is done. No complicated receipt handling. All she needs to do is have her written claim that she drove those trips. (In fact, in some cases you don't even need written records).

2) Spending on things like food have several shortcuts. You can take the federal per diem rate for meals and lodging. Forget receipts and just use those numbers. Or you could use receipts for a few typical trips and average them. Then multiply that number by the total number of trips.

Of course you must qualify for these deductions and meet a few restrictions, but in many cases it is easy if you didn't keep receipts. You have 1 month left to keep good records, that'll help you in calculating those averages for typical trips.

I'm thinking that you run a pretty shoddy buisness if you don't have good records. Maybe this is a hint to do better paperwork.

 

[jinduy]

Originally posted by: dullard
If you have a small self-proprietorship, then there are some nice rules that you get to follow.

1) You are often better off just taking the standard mile deduction. That is (I think) 37.5 cents per mile in 2004. Thus add up your mileage, and forget about trying to keep gas receipts, maintanence receipts, repair receipts, etc. In many cases this is easy. For example, my wife drove from home to another city to do business. She did it once a week for 50 weeks. Multiply the mileage for one trip by 50 and she is done. No complicated receipt handling. All she needs to do is have her written claim that she drove those trips. (In fact, in some cases you don't even need written records).

2) Spending on things like food have several shortcuts. You can take the federal per diem rate for meals and lodging. Forget receipts and just use those numbers. Or you could use receipts for a few typical trips and average them. Then multiply that number by the total number of trips.

Of course you must qualify for these deductions and meet a few restrictions, but in many cases it is easy if you didn't keep receipts. You have 1 month left to keep good records, that'll help you in calculating those averages for typical trips.

I'm thinking that you run a pretty shoddy buisness if you don't have good records. Maybe this is a hint to do better paperwork.

Thanks for the info! Useful stuff. I don't know if I'd call it a "shoddy" business tho . I'm just a programmer hired as a contractor. I become an employee in a few months. Yeah I didn't realize how important it was to keep receipts .

Thanks!

 

[EagleKeeper]

Make sure that your year end paperwork from the client indicates that you are a contractor either as a 1099 of W2 statuary.

Without that, the tax benifits for self-employed become very murky and much less.

 

[FoBoT]

yeah, just keep a log book of the miles you drive. just a little notebook whereyou put the time/date and start/stop milelage. use the total to claim the standard rate