Business use of Truck!

[Ray in Ohio]

Taxpayer is employed as a carpenter and gets a W2 for his hourly wages ($40,000.). On top of the wages TP gets a 1099misc for over 15K in rent. TP uses his own truck to haul the employer and tools etc. He has over 50,000 business miles on the truck and he says he always deducts the mileage expense. This is a new client for me and I am just not sure if that is correct. The mileage deduction would be over $24,000, so he would show a $9,000 loss.

How would you all handle this?

[jainen]

>>employed as a carpenter... over 50,000 business miles<<

Hmmm. I thought the home building biz was in the dumps, but if this guy was so good, that's, let's see, 136 miles every day of the year including his birthday. Not much time left on the job site. The last time someone hammered like that, the steam drill only drove nine.

[kcjenkins]

Ray, I'd have real trouble with those numbers, because assuming a 5 day work week, and 51 weeks a year, he'd be driving about 200 miles a DAY. That is just not believable to me, in that business. I'd assume that the employer reimbursed him for his actual mileage with that large a 1099, and tell him he's pushing it at that. I would not second guess the employer, but I would not be taking extra mileage on that one.

[Ray in Ohio]

So would you take enough milage to equal his income? Zero profit?

[kcjenkins]

Yes, the assumption would be that the employer would be paying him based on his actual use.

[michaelmars]

if he is being paid for actual use as an employee reimbursement there shouldn't be a 1099 in the first place so show enough exp to wipe out, pic up additional expenses ie tools etc as 2106 exp

[bstaxes]

50000 work travel miles is high but in the area I live it is conceivable. I am in northwestern NJ and some people work in NYC and Phila, and travel from this area and Pa to work. There are a few speciality construction workers who get big bucks for their services and travel a distance. I would definitely have it in writing.