lead credits and the IRS

[PA Bill]

I get that but couldn't you easily fudge the numbers in your log? How would the IRS call BS on that?

I hear you, I just assumed that's what it was. Maybe I just got picked out randomly but I admit I was always sloppy on my records. Got away with it all these years so I was complacent. Then when they called me on it, well....

 

[nfl72]

Just stop and think about it for a second. On your tax returns you claim mileage. If and when you get audited you have to produce a log to match your returns. I use credit card for all my purchases while working on the road. That an my hotel receipts are ample proof that you drove where you claimed you went. I also have 5 cars and all of them have been used for work from time to time. So you don't need one car that is driven 50,000 miles a year.

For my audits I had dates, where I went, and listed a few people that I met with, and the mileage driven. That's all you need. My log consisted of a legal pad with 4 columns per page on 4 full pages.

 

[Josh]

Does the insurance company include the amount of credit they give you for leads in the income amount they record on your 1099?

(And disposable income and taxable income may not be the same things.)

It depends on the carrier, but I would imagine most don't 1099 it out. If they give a lead vendor $500 on your behalf then I believe it would show on the box 7 of the 1099 form.

 

[LostDollar]

It depends on the carrier, but I would imagine most don't 1099 it out. If they give a lead vendor $500 on your behalf then I believe it would show on the box 7 of the 1099 form.

Thanks for the reply. That helps me see the process better. I was imagining the possibility of an agent reporting income without an offsetting deduction (if they did not use all the lead credits they earned from a particular company).

 

[Todd King]

I think that keeping some oil change billings in the tax file would help to document overall vehicle mileage within time periods in the event some type of external support was needed for an audit. It would give a CPA some additional material to work with when sitting down with the IRS.

You wouldn't normally have to show proof of that since you are not using those receipts to show an itemized deduction. Just show your mileage log that you keep up to date and there you have it. No need to come up with anything else as this is your proof.

 

[LostDollar]

You wouldn't normally have to show proof of that since you are not using those receipts to show an itemized deduction. Just show your mileage log that you keep up to date and there you have it. No need to come up with anything else as this is your proof.

The only reason I suggested that is because it is a source external to a mileage log or other personal records to document a large volume of miles on a vehicle. I have no idea if there is some point where an IRS auditor would question the validity of a large quantity of miles in a personal log.

(I am doing something like that in reverse to document low mileage for insurance premium reductions.)

 

[nfl72]

Dealing with your insurance company is different than dealing with the IRS, trust me on that one.

 

[LostDollar]

 

[Todd King]

The only reason I suggested that is because it is a source external to a mileage log or other personal records to document a large volume of miles on a vehicle. I have no idea if there is some point where an IRS auditor would question the validity of a large quantity of miles in a personal log.

(I am doing something like that in reverse to document low mileage for insurance premium reductions.)

They already know about how many miles they typical insurance agent might drive. They probably have some sort of lists that show different occupations and what they might expect to drive, give or take. They already know that it is nothing for an agent to claim 10's of 1000's of miles each year. They just want to see documentation and a mileage log is good enough.

 

[policywunk]

My CPA did fine for me. I came out smelling like a rose. I only owed $1200 after it was all done. Most of it was from a 1099 from RNA for that I neglected to include.

I got audited 2 or 3 times while in the mortgage business. They are not fun as they take time to prepare for. FTR I have never been one to leave money on the table!

Just FYI you can see all your reported 1099s if you set up an online account at IRS.Last year I noticed that I had a two 1099 from the same carrier for the same amount on the IRS website even though I only was mailed one.from carrier.When I called the carrier to question them about it they said that they only reported it once.When I faxed them the transcript report from the IRS website showing it was reported twice they corrected it.