Most jobs can provide opportunities for self employment. Being a limousine driver is one of the opportunities. A business owner needs to find a way of cutting costs in all possible ways.
The IRS gives tax deductions for limousine drivers who are self employed for a number of items.
Taxation for Limousine Drivers
People who operate their own businesses are termed as self-employed. There are various kinds of positions such as limousine driver.
These limousine drivers who are self employed are like taxi drivers, in terms of licensing and particular regulations they adhere to. There are tax deductions which are similar and are approved by the IRS.
These deductions apply to different costs and fall into four major groups.
Deductions for Vehicles
Most tax deductions for limousine drivers who are self-employed normally relate to vehicles. If you possess a vehicle which you need to operate legally on the road, deductions relating to this is inclusive of insurance, registration and inspections.
If you have leased the limo, you can still make deductions from the lease as part of expenses for operating, maintenance and gas.
Tax deductions for drivers of limousines that are self employed, include permits, fees and licenses. In most cities such as New York, limousine drivers need special permits to carry out operations around the city. Whatever payment is made to authorities involved in licensing are taken as a business expense.
Expenses incurred for meals, accommodation and other costs in the course of specific jobs can be deductible. If the job includes an overnight stay, you are able to deduct the rate for the hotel accommodation and meals purchased.
This is only applicable if the client is not ready to pay for these items. Receipts are required as proof of the deductions. Mileage is included as well if you are required to drive to and from a job.
Business cards, posters or flyers on different locations fall under advertising which is subject to deductions. If there is a room you are using as an office, some of the utilities being used in the room are deductible.
If you confirm that office equipment is used in the running of your services, these are also deductible. Since 2010, deductions are also made on insurance premiums for health, for self employed people.
Factors to Note
According to the terms of IRS (Internal Revenue Service) you are not self-employed if:
- Your schedule is drawn up by some else or a dispatcher.
- A different company sets rates.
- You get jobs where you are regarded as an employee.
First, confirm if you are actually a limousine driver who is self employed or an employee. Then examine all the expenses you have. After you have recognized these factors, you can then start making calculations on deductions supposed to be carried out by the IRS.
A Schedule C of Form 1040 can be used by limousine drivers who are self employed for filing for tax deductions.
Ensure that your records are in order, such as receipts and statements of account to verify the deductions you are making.