The IRS Audit Blog

Archive for May, 2007

Question: How do I properly track car mileage for the IRS?

I will be working as an independent contractor this year, driving many miles in my own vehicle. What is the proper way to track mileage for the IRS? Is there a specific IRS form I need to download? If I keep my own log, what details do I need to document to avoid an audit? Thanks for your help.

Answer: Keep your own log. It should be updated daily, showing ALL miles driven on the vehicle, and classifying those miles as personal, commuting, or business. For the business miles, note what the trip was for.

Calendar

Submissions for “Community Calendar” are required two weeks preceding the date of publication. Send to: Mary Ann Bottari, Pioneer Press, 3701 W. Lake Ave., Glenview IL 60026; mbottari@pioneerlocal.com. Information may be faxed to (847) 486-7495.

2010 IRS Business Miles Driven Deduction

Parachutist Jumps From Tethered Hot-Air Balloon

Operators Were Not Expecting The Valentine’s Day Stunt A person who had booked a ride in a tethered hot-air balloon for Valentine’s Day surprised the other passengers by climbing over the gondola’s safety net, unrolling a hidden parachute, and launching himself into the air 300 feet above the ground.

Ron Paul schools the media on economics and the Fed the illegal institution.wmv

BBB advises: Choose qualified tax professional

This week’s column was chosen for three reasons. First, Feb. 1 was the deadline for businesses to provide W-2 forms to their employees. Second, advertising campaigns have started that give the BBB cause for concern. Third, it was suggested by a tax preparer (who reads my column). Many thanks.

File IRS Tax Returns from irstaxuniversity.com

Question: How can I get my unused flexible spending account money, if I left the employer before Dec?

I opted to put lot of money in FSA account (about $2500), based on my anticipated dental work in December holidays. However, I quit the employer in Oct. Till oct, I have put $2000 in my FSA account, and it is unclaimed sofar. On the last day of my employment, my employer told me that I should use all the money by the end of october (not before december), otherwise it will be lost. It was a big shocking for me.The FSA plan administrator also concur this. Is there any way I can do dental work in december and get it reimbused from my FSA account, with my previous employer? Is it IRS rule that if the employee leaves in between the plan year, the FSA benefit stops at that month and all the unused money will be lost? who will take that money? Is it my previous employer or IRS?

Answer: The FSA administrator can only reimburse you for expenses incurred while you were an employee. Once you quit, you stopped being a covered employee at midnight. Obviously you could submit expenses that had already been incurred by that date, but no new expenses.

Your company “gets the funds”–to offset the expenses they incurred in running the plan. They cannot and will not make an exception in your case.

Bummer.

Tax Law Change Could Hit Small-business Owners

Tax Law Change Could Hit Small-business Owners

Morning headlines for Jan. 19

Toledo’s school board will hold a meeting this morning, TPS opens a new “greener” Hawkins Elementary School today…

Who Gets Audited?