Mileage tax reduction

[Tony Tibbar]

Currently mileage is 58ct/mile.


A] Does that include everything (gas, repairs, etc)?
B] Does the LLC need to own the truck to deduct this expense?
--- If not who deducts the mileage?
------ B1] The LLC (and passes it on to the owner)?
------ B2] Always the LLC?
------ B3] IRS doesn't care?
C] What sort of proof does the IRS require? How do I prove I drove a total of a1000 miles last year for the LLC?
D] Is there some sort of (extra) mileage for a trailer? We have a trailer but that's not strickly for LLC use and not bought with LLC funds?

We, the LLC, want to keep things as simple as possible. We both use our own truck and drive the same amount of miles on average. So there isn't any need to split things. We want to keep all funds in the LLC bankaccount and only take out our wages.

[Eamonn McElroy]

@Tony Tibbar

"A] Does that include everything (gas, repairs, etc)?"

Yes, everything except parking expenses and tolls.

"B] Does the LLC need to own the truck to deduct this expense?"

No, however it's easier for tax reporting if it's going to be used for 100% business purposes.

If mixed use, generally it's better to keep in the name of the individual.  There are two ways to handle the deductions in this situation.  The most advantageous is usually an "accountable plan" with reimbursement to the partner.  The other is to deduct as unreimbursed partner expenses on Schedule E.

"C] What sort of proof does the IRS require? How do I prove I drove a total of a1000 miles last year for the LLC?"

Maintain a travel log.  Your CPA should be able to help you out with this.

"D] Is there some sort of (extra) mileage for a trailer? We have a trailer but that's not strickly for LLC use and not bought with LLC funds?"

A utility trailer is not a vehicle.  There is no deduction by mileage.  If there is mixed use between business and personal, generally you would be able to depreciate a portion of the trailer.