Gas and Mileage??????

[Super Mom]

Just checking, I'm sure this is so WRONG. But I have a new client catching up on some old returns. For the last 2 years filed, one of the big block firms has an amount in for car and truck expenses, which I assume is mileage AND they entered a rather large amount for fuel and oil. I know this is wrong, but second guessing myself since such a big company that advertises to be so knowledgeable did this for 2 years in a row. Is there something I am not aware of?

Also, they are showing an amount for depreciation, and no depreciation schedule in the copies. I'm sure this gentlemen has depreciation, but I have no way of knowing what, when purchased, and how much depreciation gotten and method used. I know most of those big block stores are closed now. I assume they have a number where TP's can get info like that? Anyone have any experience with that?

The client will not be happy when I tell him that I cannot do what they did!

Thanks!!

[Super Mom]

Oh, joy! They also put in an amount for uniforms and boots. This is a sawmill, I'm sure he could wear that stuff other places. I can't do that!

[kathyc2]

Have you considered that the fuel expense may be to run the equipment?
Have you asked client for the expense list he gave to them to prepare? That may answer some questions.
Are the boots steel toed? Are uniforms being supplied to employees as a de miminus? Is the company name displayed on uniforms?
I've found the store front places are pretty good at including depreciation schedules. Could it be client has additional pages/schedules that he did not give you?

[Super Mom]

Have you considered that the fuel expense may be to run the equipment?
Have you asked client for the expense list he gave to them to prepare? That may answer some questions.
Are the boots steel toed? Are uniforms being supplied to employees as a de miminus? Is the company name displayed on uniforms?
I've found the store front places are pretty good at including depreciation schedules. Could it be client has additional pages/schedules that he did not give you?

Yes, I have considered some of the fuel is to run equipment, and I will find that out from the client later, but is obviously not THAT much. I won't worry about what they did in the past, but the client will NOT be happy with me when I can't double up like that and he must pay a lot!! I want to be sure I'm right BEFORE I call him!!

My understanding is that if the boots are steel toed that still is not something we can put down???

I am pretty sure the client gave me everything, it was in the folder and all was stapled.

I have already decided that I will let the client know that I will have no hard feelings if someone else does it. However, I'm spending a lot of time on this, how does anyone else handle that? My first thought is, no charge if he wants to go elsewhere, but then what about my time???????

Oh, and FYI they charged over 2 times what I would have for this mess!!

[Super Mom]

I checked and rechecked both years, no depreciation schedule or 4562. It is definitely possible that the TP took those out over the years, but unlikely since I have SO many papers!!!! No way would I waste this much paper or ink, maybe that's why they charge so much!!!

[FEDUKE404]

You need background info

Your only hope is to find out EXACTLY where the numbers came from, to include depreciation schedule(s) as applicable.

I'm also rather intrigued how someone who works in a sawmill (uniforms/safety shoes/etc) can apparently have a large amount of employee vehicle expenses. Something smells amiss.

If there are true "vehicle" expenses, the tax return should clearly show the usual "how many miles for whatever" format. If the guy was running equipment, those costs should appear separately (somewhere!) from any "vehicle" expenses. And then you have to ask why an (apparent) "employee" would ever have such unreimbursed business expenses in the first place.

I would want these background questions answered before I proceed with the return. ("Assume" generally works very poorly for tax preparation.) Otherwise, I might graciously decline to get involved with this return. Even more so when a new client comes in after deciding to "catch up" on some past year returns. You might also want to consider a hefty non-refundable deposit to protect yourself.

What a mess. Good luck.

FE

[taxmom34]

did those returns have a schedule C or a form 2106? sounds like some expenses on both forms or is this guessing on my part?

[kathyc2]

My understanding is that if the boots are steel toed that still is not something we can put down???

Yes, they are considered safety equipment. From Pub 529; " You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves."

[Lion]

It's been a long time since I worked at HRB, but we entered all vehicle info, mileage and actual, and let the program work out the most beneficial -- except first year when we forced SMR to give us options in future years. So, the worksheet always showed both the SMR and the actual expenses to compare, but only one of those was transferred to the 2016 or C. Yes, you have to question him re commuting vs. biz mileage. Maybe he drives from site to site during the day. Goes to headquarters first to load equipment and then goes to a site.

We also included depreciation schedules, but they would appear when new items were purchased. No 4562 when no new depreciation.

Definitely deduct safety equipment: steel-toed shoes, safety goggles, even specialty uniforms such as waterproof or punctureproof, hardhats.

Interview your client.

[Burke]

Even when there is no new depreciation, I always print and include the depreciation worksheet showing original basis, (including non-depreciable land), bonus/special depr, current year's depr, accumulated depr, and remaining balance. That way, TP has all info each year, and can provide to a new preparer if necessary, or in the event of an audit.

[Super Mom]

Yes, they are considered safety equipment. From Pub 529; " You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves."

good to know, thanks!

[Super Mom]

did those returns have a schedule C or a form 2106? sounds like some expenses on both forms or is this guessing on my part?

Is a Schedule C

[TaxGuyBill]

If there are not 4562s for new depreciation, that presumably means the depreciation was from items placed in service before that. I would ask for older returns to see what shows up. Hopefully, he has them. Otherwise, I would think it would show up on Transcripts if you can get those.


If the client goes elsewhere, unless you have a signed Engagement Letter that says otherwise, you may have just lost that time. For my business model, I just consider that as part of how it works (although I try to look through things before I spend too much time, and warn the client if something looks like it may cost a lot for me to prepare the return before I spent too much time on it).