Tax Refunds.

[archibaldcrane]

If you really drove 3 hours a day 15-18 days a month all year - how many miles are we talking about? As a 1099 those miles are a legit business expense, and at 55.5 cents a mile you're looking at a huge writeoff that it sounds like you definitely didn't take.

You need to redo your taxes girl.

[Dolmen]

A W-2 is more advantageous because you're only paying (for 2012) 5.65% versus 13.3% of your earnings for SS/Medicare (employee and employer sides on SE). Most companies used to pay their 1099 contractors a little more to compensate for SE tax, but that's luck these days.

[Celeras]

If you really drove 3 hours a day 15-18 days a month all year - how many miles are we talking about? As a 1099 those miles are a legit business expense, and at 55.5 cents a mile you're looking at a huge writeoff that it sounds like you definitely didn't take.

You need to redo your taxes girl.

Poor advice. How long they drove is irrelevant to whether they're deductible miles or not, and you weren't given enough information to state something like that. If they have a regular place of business, only miles outside their metropolitan area are deductible. If they were hired for one specific location, no miles are deductible no matter how far away it is.

And like I sort of ninja-edited as you were posting: if you didn't know you were eligible then you won't be able to prove the mileage anyway, and shouldn't claim it unless you want to risk penalties and interest.

A W-2 is more advantageous because you're only paying (for 2012) 5.65% versus 13.3% of your earnings for SS/Medicare (employee and employer sides on SE). Most companies used to pay their 1099 contractors a little more to compensate for SE tax, but that's luck these days.

That's why more than half the self employment tax is self deductible towards your AGI. It generally works out to be the same.

[archibaldcrane]

You really think someone with like 14k in taxable earnings is going to get audited? She's contracting all over the place for her job as a health care professional (if I remember correctly). The point isn't length of time in the vehicle, it's that she's racking up a ton of miles as a contractor. The definitions are blurry enough, and she makes little enough, that she should DEFINITELY estimate her business mileage and deduct it.

Or just eat the 4k tax man bill that she can't afford.

Ya know, either way.

[Dolmen]

The sticky issue is that she'd need to prove the mileage should she get audited (and yes, they'll audit someone making $14k). If her home is her "office" and she doesn't go to a central hq type place, she can't deduct the mileage from home to the first appointment, and the last appointment to home. However, everything in between (as long as it's business) can count. Rough estimates can be a really, really bad idea if you can't prove the mileage. Nirokun, you should keep a log of your mileage and really cement your documentation so you can take the mileage expense.

[archibaldcrane]

Or just make up a log with google maps for distances if you have a decent sense of where you went, at least for last year, and then start keeping one from here on out.

[Dolmen]

Or just make up a log with google maps for distances if you have a decent sense of where you went, at least for last year, and then start keeping one from here on out.

Pretty much this. If you are to estimate though, use a low estimate. The IRS has flags set for certain things where if numbers go above certain amounts/percentages it automatically creates an audit flag.

[archibaldcrane]

Also, pretty sure if you have a qualifying home office, any travel from there to another site to engage in business qualifies as business mileage, including the first trip to the first appointment/consulting place and the last trip home.

[guartz]

All of that seems way to complicated for 4k.
Probably easier to just pay yourself per diem. Depending on what state she was, easy 150-200 dollar deduction per day of work. But meh, I don't know enough to say for sure.

[archibaldcrane]

I don't think she's actually incorporated.

[archibaldcrane]

Also per diem requires "a rest period" - meaning an overnight stay generally.

[guartz]

oh, makes sense. I honestly thought it was just an alternative to an expense report.

[Nirokun!]

Or just make up a log with google maps for distances if you have a decent sense of where you went, at least for last year, and then start keeping one from here on out.

This is my plan. I have time sheets for the whole year showing where I went and on what days (and signatures of patients with dates, to prove I was there at that time, if they wanted to dig that far.) Google maps/navigation get me to where I need to go, and just use google to calculate the mileage. I'm not adding in extras that I spent (like laser hair removal or electrolysis), all I have is the surgery, licensing fees, a portion of my cell phone bill, and mileage. I might be able to think of more, we'll see.

I don't have a separate home office, so I do all of my work from my bedroom. The place I'm employed (or contracted out of) is in DC, and I don't go there more than twice a month, to drop off paperwork and pick up a check (no direct deposit. ; I schedule appointments from home in advance, then go directly into the city to see them, I don't stop at my office. Does this cause a problem? (Can I only claim the mileage inbetween patient visits? ;

*Can I claim the cost of the flight to Thailand? I bought the ticket last year.

I just did the mileage to one patient (who lives next to the pho place rofl). Google tells me that's 25.7 miles. It's at least that much back, and not counting other appointments in the area. Even if I'm modest, and just include the trip there and the trip home, if I see 4 patients a day (usually the most I do except for one day for one patient who gets home, at the earliest, at 4:30pm), that's 12ish days of work a month. 13 if you count another day to drop off paperwork (I always save it for a free day, there can be issues), and I could not count the days I pick up my check because I can feasibly pick it up on the days where I visit a patient who lives close to the nursing office. That's still a lot of miles. 12 days of work a month is a lofty goal, when patients cancel on you or just forget that you spoke with them and scheduled a time to visit them that week. Or are just flakey because they feel like, despite health problems, their friend called them to have lunch, and they forgot to let you know. But that's just my job.

Believe me, I try to make it 12 days, I pull up zip code maps and calendars and have numbers flying through my head just to make it work. This patient's aide leaves at 1pm, and this one's at 4pm. But the first one said she had a doctor's appointment at 8am, and wouldnt be back until noon, so I have to see her first because the others like to talk too much and would make me miss her appointment. The 4pm is good for the 2-4p slot, hit up the Latino senior center at 1p~ish, see 2-3 patients, and be done before 3pm when the buses come to take them back home! See the 2-4p patient at 3....:30ish and be in time before sitting in traffic and dodging songs by Fun and commercials on ever station for an hour and a half.

[archibaldcrane]

Transportation costs to obtain medical care are a deductible expense, accd. to http://turbotax.intuit.com/tax-tools.../INF12018.html

I can't really speak to the specifics of the rest of your particular mileage concerns.

[Celeras]

You really think someone with like 14k in taxable earnings is going to get audited? She's contracting all over the place for her job as a health care professional (if I remember correctly). The point isn't length of time in the vehicle, it's that she's racking up a ton of miles as a contractor. The definitions are blurry enough, and she makes little enough, that she should DEFINITELY estimate her business mileage and deduct it.

Or just eat the 4k tax man bill that she can't afford.

Ya know, either way.

If the mileage is legitimate and you can prove it, then claim it. I'm a Revenue Agent for the IRS, and the majority of my workload is Employee Business Expenses. Yes, the #1 source of the audits I do is lower income people writing down income so they don't have to pay any tax. They're also the easiest cases to work because its entirely clear when people are pulling shit out of their ass, or fabricating businesses entirely. A fictional log from Google Maps will not fly. The law specifically states that estimations are not acceptable and you are required by law to substantiate all mileage.

[archibaldcrane]

Well, she's detailed her situation pretty clearly - is her mileage deductible? Note: I'm not suggesting she makes up fake destinations or says she drove more than she did - just that she should create a log from her records using google maps to determine the actual distances.

[Celeras]

At the very least they'd need to submit a statement from their employer outlining their duties, a copy of the log and timesheet showing destinations and business purpose of the travel, and repair receipts from the beginning and end of the year the substantiate that the mileage claimed was put on the vehicle.

As an independent contractor, travel to patients would be deductible if you can prove it. But with such low income, the threshold of expenses-to-income is almost certainly going to be looked at. People like to think of it as a credit when its intended to be reimbursement. You get 55.5 cents per mile this year because that's the estimated cost of travel. If you're claiming $21,000 in income for a job that requires you to travel 20,000 miles (~$11,000 in expenses).. well, think about what that means and why it could be considered questionable.

[Julian]

Herp derp no idea what I'm doing -- just out of college and first time doing this. :<

Anyway, let me try to summarize:

I was a student full time from Jan--end of April (graduated 1st week of May)
Then for the summer--now I've been working. Made about 15k, 1.5k was withheld.

The part about my job seems all fine and dandy, fill in the stuff I see on my W2, ok np.

The part that I'm confused about is the first half of my year & financial aid. I got about $9k, 2.2k to tuition, 2.5k to campus housing, some stuff here and there & like 4k leftover as spending money for normal expenses.

Before I input the school stuff, I had a few hundred as my return, but then it gobbled up that 7k and said my income was 22k and left me with like $50 return <.<

Does that sound right? :/ I really wasn't expecting to have to pay taxes on financial aid... blah. But at least I'm still on the positive.

[Dolmen]

Celeras summed it up very well. Nirokun, if you have any questions please PM me and I'll give you as much help as I can to make sure you file a legit return (and get the deductions you're entitled to, IF you can prove it). I'm in Northern VA and have clients that are in similar situations as you.

[archibaldcrane]

At the very least they'd need to submit a statement from their employer outlining their duties, a copy of the log and timesheet showing destinations and business purpose of the travel, and repair receipts from the beginning and end of the year the substantiate that the mileage claimed was put on the vehicle.

I've been claiming my business travel for 6+ years now and have never submitted any such thing - it's not like H&R block even requests such documentation when you enter your business mileage.

Unless you mean that would be the "very least" you'd have to do for it to hold up under an audit, which is a bit of a different situation (and pretty ridiculous if she could substantially prove she was at the places on the log on the days she said she was, in absence of evidence of a teleportation device)