Mileage Expenses Archives - Notary Blog - Signing Tips, Marketing Tips, General Notary Advice - 123notary.com
123Notary

Notary Blog – Signing Tips, Marketing Tips, General Notary Advice – 123notary.com Control Panel

March 26, 2017

Is it better to write off mileage or actual expenses?

Filed under: Business Tips — Tags: , — admin @ 9:50 pm

The Federal mileage deduction rate changes each year and is 54 cents a mile for tax year 2016. You can deduct your actual expenses such as gas, oil changes, tires, brakes, transmission and other repairs as a percentage of miles driven. Or you can deduct straight miles. If you own an economy car, you will get a better benefit from deducting using the standardized mileage rate which is in my case about triple what my actual expenses are since I drive a Toyota.

However, if you drive an inefficient car which has expensive parts, guzzles gas, and depreciates a lot every year, then consider both options.

As a Mobile Notary, you need to keep your mileage book updated every time you get in your car — what a pain. But, the deduction can wipe out perhaps 70% of your income leaving you owing hardly any tax! Additionally, you do not have to pay self-employment tax on Notary income (ask for the advice of an accountant and read the SE section of your tax book.) Unfortunately, there are no instructions for how to fill out the forms.

I was asked to fill out two schedule-C documents. One for the portion of my income that was notary income and the rest for mobile fee income which I did pay self-employment tax on.

This is complicated, no accountant will understand what to do, and the IRS will probably misguide you, so good luck and look forward to being audited. But, as a mobile notary, between the mileage deduction and no self-employment tax on notary income, you will owe less than half of what you would normally owe on the same income.

As a Notary, you can determine that in a signing of ten signatures — if your state allows $5 per signature you could arbitrarily decide that $50 of the income from the signing was for signatures and the rest for travel fee. In California with $15 per signature you could say that in many cases the whole signing was travel fees. Or just go through your notary journals at the end of the year and count up your various signatures and see how many there are. Do the math your way just as long as you do it correctly!

Share
>