Welcome to Chapter three. Schedule C and expenses. Okay, let's talk about expenses. Here are the items that are hot buttons with the IRS, and these points are audit flags on an IRS Schedule C. Auto expenses and your deductions for your home office give two choices for your auto expenses. You could take the standard mileage or you can take the actual cost to operate your car plus the depreciation expense. Generally, you will always be better off taking the standard mileage rate, unless you have unusually high repair bills, such as replacing a transmission or rebuilding an engine. The biggest problem with auto expenses is taking your mileage deductions because people do not keep accurate records. So if you elect to take the standard mileage rate, you should keep a log of your mileage. If you do not have a log and need one, at the end of this video, we will share a link where you can download a log for free. So if you didn't keep a log throughout the year on your mileage, now is a good time to reflect on how many miles you drove to your job if you have a job that you go to consistently. The best way is to measure the distance from your home to your job, print out the distance, and keep this with your tax records. Also, you should have a logbook to start making entries for every day you drove to your workplace. Remember, don't just guess and say, "I drove 10,000 miles." that will stick out like a sore thumb. Make an effort to get as close as possible to the correct number. Also, when you're calculating your mileage for your business, remember some businesses will have high mileage, such as a traveling technician versus someone who...
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Video instructions and help with filling out and completing When Form 1120 Schedule M 3 Expenditures
