Expense questions

[ucbruin]

$248.53....
Always round to $249.00....

 

[The Bob]

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?

My wife at the time and I were audited back in early 2000's. Had to take boxes of documents downtown to IRS office in Richmond.
They just keep probing and if they find something is inconsistent, they keep probing. As for mileage, my acct told me a real simple way to document. When I inspected or drove comps I would take the file folder for each job. Get in car, write mileage on odometer down on outside of file, get home, write mileage down. If I had multiple files that day, I would just allocate the total mileage among the different files.
As for expenses, as long as you have some kind of documentation, you're good. You don't necessarily need receipts. I printed out bank/CC statements that showed expenses for MLS, software, etc...I
Luckily we passed and had nothing to worry about, but the way they question things tells that me not much gets by them.

 

[Zoe]

$248.53....
Always round to $249.00....

you are usually shy.

 

[Zoe]

Now that I think of it. I remember some people having a problem sharing their income tax records to Congress.

 

[Mile High Trout]

Just use turbotax business, estimate and be done with it. If you get audited so what, you'll pay a little more or you never know, maybe you'll learn you paid too much.

Half the auditors were doge'd anyways and they're unlikely to return. That was among the effected departments.

The goal is to keep your effective tax rate as low as possible and keep the little slider bar indicating audit risk off the red zone.

If you've got people, sure, make them do the miles. If not, it's not a big deal. You can pop over to mapquest and punch in your home address then constantly punch in one new data line to wherever your inspections were, estimate an additional mile or so for comps driving for each one, tally that up and there is your mileage. Be sure to write down your odometer readings the year before so you don't exceed the actual driving amount. It's an extra ordinarily simple exercise so you don't need to be tied to some antiquated mileage log.

One of these years I may decide to get my taxes done on time. Not today. Not today. As long as you're positive and don't owe, you're good. That's where having a wife or husband with a traditional employment on payroll comes in. Simply have them file away some additional with holding every few weeks. It's that easy. You can practically operate on a cash basis without worrying.

 

[Tom D]

You think too income highly of yourself worrying about the irs auditing you. Nobody here makes that much income for them to waste time, to get a couple thousand from you.

 

[Mark K]

You think too income highly of yourself worrying about the irs auditing you. Nobody here makes that much income for them to waste time, to get a couple thousand from you.

You don't have to make a lot of money...you just have to make a mistake. Many years ago starting out, I did my own and claimed depreciation on my business vehicle. Then I saw this part about mileage so I claimed mileage but forgot to take off the depreciation part. Wasn't making much at the time but the IRS sure wanted more. Trip downtown to the Fed building with box of stuff, learned a lesson, paid them about $1K more, +/-, started using a CPA ever since.

Document things and/or have receipts...you'll be fine. I had some handwritten notes for expenses and they allowed them at the audit.

 

[Overimprovement]

Easy mileage tip--use google maps to calculate distance to/from your home to each subject address. That's if you forget to write it down day of inspection of course.

Don't forget driving the comps (for those that actually do). If you cruise the neighborhood to get a feel, use that too.

I was audited once, but since I kept a mileage log with addresses, that was the least of their inquiries.

 

[Fritz in NY]

My Audit was in my kitchen, 2003. I had all doc's they needed, but I was "fined" $ 500. for sloppy record keeping. Hey, who says I'm sloppy? a regular person Vs An IRS PERSON, WITH A JOB AND BENNEYS BEYOND COMPARE, to make the trip worth the US G'vnt money. Arbitrary and capricious all the way. Was the $ 500.fine a trip fee?

 

[ZZGAMAZZ]

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?

much easier if you drive high-maintenance cars is to declare annual maintenance expenses rather than mileage, at least according to my tax guy. [as an aside, I was surprised when my pal was advised following an IRS audit appeal that he was responsible for his tax returns, rather than the tax pro who he paid $$$$.] I personally never reviewed any of my 55 annual returns nor did I review the appraisal for any of the 5 or 6 homes I purchased earlier in my life, nor even knew or cared what an appraisal was...