Car expenses

[Questionguy101]

A question for the tax professionals here.

What'd you do if your client tells you he had car expenses in 2006 but he didn't keep the mileage records.

He gives you a list of the itemized car expenses in 2006, like gas, insurance, repair, etc. He affirms that all the car expenese are business related. But he also tells you he doesn't have the daily mileage log.

Now what?

[Gretel]

A question for the tax professionals here.

What'd you do if your client tells you he had car expenses in 2006 but he didn't keep the mileage records.

He gives you a list of the itemized car expenses in 2006, like gas, insurance, repair, etc. He affirms that all the car expenese are business related. But he also tells you he doesn't have the daily mileage log.

Now what?

Send him straight to hell. Just kidding.

It's his responsibility to reconstruct the mileage log if audited. If he has another car for personal use and uses this car for business only you can take the expenses. If this car for used for both, business and personal, then he needs to give you the total miles and the business miles, however well estimated.

I would hesitate taking the SMR if the miles are roughly estimated, but if they are reasonable you can take actual or standard unless this is not his first year using this car for business.

[JCH]

Document that he didn't keep a mileage log (are there any clients out there who actually do keep a log?). Clients seem to have selective memories about these things later when it comes back to bite them in the rear.

[Jiggers]

Vehicle expenses

He has to come up with some ratio of business use to total use to calculate how much of the vehicle expenses are deductible.

Get it in writing. Clients have selective memory.

[veritas]

Look at the

questions on pg 2 of form 4562 line 24a.