Expense questions

[PushinValue]

Has anyone ever been audited by the IRS?

I am specifically wondering how picky they are with millage logs.

Also, a vast majority of my deductions are items with receipts that are easily retrievable (MLS, EO, license fees, software, portal upload fees etc). I am wondering if I am going to get hit with a "where is that receipt for those batteries, paper, ink cartridges' etc..."

Also, I was wondering how many miles you drive per year? I am sure it is a wide range with urban vs rural. I am a suburban/urban/sometimes rural guy. Lowest year has been 17k with the highest year around 30k.


Anyone have a deduction they think may not be obvious but is missed by appraisers? People always say "oh, you are self employed, you can deduct everything". I just LOL


Millage
Office supplies
Internet
MLS/eo/license/education
Take an agent or two out to lunch

What else is there?

 

[DWiley]

I was never audited, but we did require travel logs. Each day the appraisers logged where the went and how many work miles they recorded. The logs were turned in monthly. We did that because my staff appraisers were employees, and we paid them mileage. We needed the logs to know how much to pay them each month.

 

[ucbruin]

According to my college roommate who worked for the IRS his entire life....
I never made enough money for the IRS to audit me....

 

[Red Flint]

It is best to write down the mileage before and after the motoring, and record the data. I use the Hatch WaveCurve excel template for the data.

 

[Mark K]

As far as mileage goes, my CPA told me to keep a log for one or two months per year and use that as an average if you don't want to keep a running, daily log. Never been a problem.

Other deductions depend on whether you have an office or work from home. Additional deductions can be taken based on which scenario. I've always had an office outside of my home (rented for a few couple of years and then bought a small building for my business and rented out the rest).

Didn't see cell phone bill on your list. Same for computers/software/annual software license. Also, an individual 401K can be deducted like any other expense from your Schedule C.

"In 2025, a single person can contribute a maximum of $23,500 to their 401(k). If they are 50 or older, they can also contribute an additional $7,500 in catch-up contributions, bringing the total to $31,000. Additionally, if aged 60-63, they can contribute an enhanced catch-up contribution of $11,250, for a total of $34,750"

You can take that to reduce your gross income down to $0 but not so far as to show a loss. And yes, you can also have an I-401K in addition to a Roth IRA. For a few years when I made some pretty good money, I max'd out my SEP IRA, my Roth, and my I-401K. You can fatten up your retirement savings pretty quickly.

 

[Terrel L. Shields]

I keep one in every auto.

 

[JTip]

I had a Realtor® friend who was audited not too long ago.

They wanted to see EVERY MILE that was claimed DOCUMENTED with TO AND FROM locations.

I always chuckled when ppl claim 10k, 20k, 30k miles, such a nice round appraiser number.

Good luck with that.

 

[Zoe]

According to my college roommate who worked for the IRS his entire life....
I never made enough money for the IRS to audit me....

Okay moneybags. Your trying to be modest now. Not your nature. LOL

 

[Zoe]

We pay personal property tax where I live on business property. We have to file a schedule every year if we purchased any new business property. I don't know if that is a State thing or a National thing. I know different States operate differently on business tax. We have to do it to keep business license to do business.

 

[Bobby Bucks]

I had a Realtor® friend who was audited not too long ago.

They wanted to see EVERY MILE that was claimed DOCUMENTED with TO AND FROM locations.

I always chuckled when ppl claim 10k, 20k, 30k miles, such a nice round appraiser number.

Good luck with that.

I've read and been told multiple times that it is a huge red flag to have rounded numbers for deductions on a tax return. Sort of like guys who cite Marshall and Swift in the cost approach and the HSF and garage SF are always nice round numbers.