WAL-MART DELIVERY

[HOPE2]

Hi to all. 

Maybe this is a question that many of you have, and I am one of them.

The clients do not know exactly how many miles they have driven for deliveries with Amazon and Walmart so on.

Additionally, they have worked with Uber and Lyft, but there is no issue with mileage for those, as it is recorded in their reports.

The problem is with these types of delivery services where the mileage is not clearly documented.

What do you think should be done? Since on Sch C asks:  Do you have evidence to support your deduction?

Really appreciate any insight into my following question.

[BobKamman]

There is no law that requires them to deduct anything.  They decided not to keep a log.  Why pester them for facts now, when contemporary records don't exist and the Cohan rule doesn't apply to mileage?  Higher income might result in greater EIC, anyway. 

Having summarized the situation, I will suggest that my friend who occasionally does DoorDash tells me it works out to about a dollar a mile.  So, if the 1099 shows $10,000, ask them if 10,000 miles sounds about right. As to whether and how to check that box, let your conscience be your guide.  

[ljr]

I'm showing my age but how about going to staples and getting an old fashioned car milage log book? Write it down as you go? Or they have car milage apps for your phone - turn on when start working turn off when done. 

But the easy answer is no log no deduction and tell them to get one of the above options and start correctly in 2025

[George4Tacks]

https://timeero.com/post/best-mileage-tracking-apps

[HOPE2]

Thanks a lot always helpful @BobKamman My problem is that when Walmart mileage did not go to Schedule C, the refund is higher ( vice versa). I think the IRS wants us to mention any ordinary expenses on the return. Is it okay for people to ignore some expenses in general?

[qbteachmt]

"when Walmart mileage did not go to Schedule C, the refund is higher"

Huh? Are they crossing a tax bracket?

Mileage allowance as a business deduction on the Sched C will reduce business net, making their taxable amount less, which would increase a refund. If it's not on Sched C, are you putting it elsewhere?

"Is it okay for people to ignore some expenses in general?"

If you can't substantiate it, you shouldn't be reporting it. No log, no entry, no deduction.

[BobKamman]

If you ever read the earlier replies before posting your monologue, you would notice things like what I said:

"Higher income might result in greater EIC, anyway. "

[Taxprohere]

Preparing a return knowing (or not objecting to) the taxpayer claiming or not claiming expenses to generate a higher EIC is an ethical/Circular 230 violation. On the flip side, can't claim expenses without documentation aside from where the Cohan rule may apply.  A cautious path to tread.  

(And to emphasis, this isn't directed to Bob, he's just pointing the tax effect possibility.)

[BobKamman]

@Taxprohere   So, what would you do? The system spends millions to disallow deductions that cannot be substantiated. Doesn’t that deserve some respect?

On the other hand, are we sure that there are no contemporaneous records of mileage? Don’t Amazon and Wal-Mart keep track of runs, and make that available on request?

And what mileage is deductible, anyway? If your only job is picking stuff up at Amazon and delivering it to various addresses every day, is your trip from home to the Amazon warehouse deductible? If you do the same thing for Wal-Mart on some days, does that make both trips deductible? Or at least the mileage from Amazon to Wal-Mart?

In many cases Amazon drivers follow the same route every day. So if you know how many days you covered that route, and its length, is that sufficient?

And is there personal contact at the delivery points, so sometimes a customer will add a cash tip? (With Uber and Lyft, it’s added to the credit card.) Have you asked the client how much in tips they earned? Be sure to tell them how much EIC they lose when tips are made nontaxable.

You can always claim actual expenses instead of standard mileage rate. If the taxpayer is driving an ‘04 Hyundai, can you figure 30 cents a mile instead? Should you?

[George4Tacks]

These words might look familiar.

"Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge."

Who is signing this tax return? 

[Taxprohere]

@BobKamman   I would simply follow the tax regulations as best I could, as there's always some give and take with clients (ie, the "same amount as last year" response).   These questions you raise are rhetoric? Though interesting, they have answers.  

You say "Be sure to tell them how much EIC they lose when tips are made nontaxable."
This comes close to suggesting the client should manipulate the information, a questionable approach.  Are tips in the course of business, taxable?  Is the tax preparer obligated to ask questions to ensure an accurate return? Yes.  So you ask the client what tips they received and they give whatever answer and you move on.

[qbteachmt]

"If you ever read the earlier replies before posting your monologue"

Whoever you directed that towards, this is out of place. Maybe you're having a harder day than usual, but there's no reason to be critical of others. You don't know who read what and as is typical, a lot of mindreading has to take place.

Perhaps you want to go back to read a lot of your stuff where you drift off topic, and then decide who is posting monologues.

[BobKamman]

@qbteachmt "You don't who read what "

But I know who doesn't read what they write before hitting "Post"

[qbteachmt]

Geez, Bob. What is wrong with you today? Is it something we should get you help for? Is it something you can address on your own? You seem really brittle and on edge. You're picking on a lot of little things out of proportion to their importance.

You're the one who brought up EIC. Excuse me for not getting on your bus. It was a good guess, but we don't know for certain what all is at play here.

[IRonMaN]

With his potshots, Bob has shot the eyes out of more people than Red Ryder BB guns have done in the history of the company.  I have posted exponentially more than Bob here and yet he has me beat by a long shot as far as pisssing off folks here.  It’s what he does and he does it well.  So posting something to a string where Bob is at isn’t for the faint of heart.  So folks need to add a couple of layers of skin if they want to deal with Bob.  If you can’t afford to add some more layers of skin, just walk on by if you see Bob coming down the street.

[IRonMaN · Accepted solution]

Back to Hope’s question - just take the best educated guess that your client can come up with and move on to the next return