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Discuss Latest WCI Blog Post: Business Mileage Tax Deduction — The Holy Grail of Tax Deductions

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  • jfoxcpacfp
    replied
    I haven’t gone back and read it, but this is a rerun/update of an article before tax law changed to disallow employee business exp deductions (bg 2018), as pointed out by our esteemed spiritrider. Fwiw, mileage deductions can also be claimed by partners as UPE (Unreimbursed Partner Expenses) in the appropriate situation, as can home offices. Consult your CPA and practice’s contract attorney.

    Leave a comment:


  • spiritrider
    replied
    Originally posted by zlandar View Post
    2% floor
    As pointed out by WCI, all miscellaneous deductions subject to the 2% floor were eliminated in the TCJA, except for certain limited individuals.

    Leave a comment:


  • dennis
    replied
    I've been doing this for over 39 yrs, first as a Dr going between hospitals and now post medicine as a real estate professional looking at property, visiting banks and real estate and insurance companies. It's easy to keep a contemporaneous record by jotting it down in a log book I keep in the car. They're cheap to buy at Office Depot. Haven't been audited yet but I think they'll hold up well if I am.

    Leave a comment:


  • The White Coat Investor
    replied
    BUSINESS deduction is right in the title of the post. If you don't own a business, you don't get the deduction. Employees don't have business miles unless the employer has a program to reimburse them. You don't need to incorporate or file a business return though. A sole proprietor can just put it on Schedule C of your personal return.

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  • zlandar
    replied
    We need another blog post for the comments. I think a lot of people are confused how the deduction works. They assume if they have X worth of business mileage they can just file that in their personal income tax and get X amount off their taxes. Need to clarify:

    1. 2% floor. So reading from WCI and JFox an employee can only deduct unreimbursed expenses above 2%. An employed doc earning $300k would need at least $6k of expenses and only the amount above the $6k is deductible. Same doc with $8k business mileage could only claim $2k ($8k - $6k= $2k). This alone would make business mileage worthless to most employed docs.

    2.The biggest benefit of the mileage deduction goes to docs who own part of their practice. Businesses can get the full mileage deduction on their corporate return. An employee or owner trying to claim the mileage deduction on their personal income return will need to itemize their deductions + 2% floor + give up standard deduction.

    3. JFox mentioned setting up an accountable plan for the business mileage. An owner of the company can submit the business mileage to the company, company reimburses the owner for the amount, and the company claims the business mileage on the corporate return.

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  • Larry Ragman
    replied
    Wow, this one generated a lot of discussion on the blog. Great Q&A from both JFox and WCI that make the comments worth reading. For me business mileage expenses are minor, a few hundred a year. Given the comments, people must really be racking up the miles!

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  • Discuss Latest WCI Blog Post: Business Mileage Tax Deduction — The Holy Grail of Tax Deductions

    Want to make a profit for driving around town? Take a look at the business mileage deduction. Perhaps some or all of those miles can help reduce your taxes.

    The post Business Mileage Tax Deduction — The Holy Grail of Tax Deductions appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.



    Click here to view the article!
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