We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Video Testimonials

Click here to watch some of our clients in their video testimonials!

Client Testimonials

I became totally and permanently disabled after a working for 44 years. I returned to college late in life (while working full-time) to fulfill my dream of becoming an RN and at that time found it necessary to secure student loans. Three years after being declared totally and permanently disabled my student loans were discharged. In January 2013 we received a 1099-C form declaring said student loans that were discharged however that amount could be considered as income for 2012. This was a large amount of money and we live on two pensions and social security income.

I started looking on the internet for information regarding 1099-C and felt that this was something that we could not handle alone. I made phone calls locally to a very reputable tax group in a city near us and they said it would cost $500 for an appointment and that they really prefer to do corporate taxes and they referred me to a local person who had worked for them at one time, we called and explained the situation and an appointment was made and then the comment was made that "I will have to do some research on this" and flags immediately went up and we called back and cancelled that appointment. I had been researching the IRSwebsite and every place else I could think of and I was not comfortable doing our own taxes this year. We called another local tax preparer that we had used in the past and made an appointment, however prior to the appointment, while still seeking information regarding our situation,

I came across a website for Gary l. Bode, MSA, CPA, PC in Wilmington, NC. I called Mr. Bodeand explained our situation and asked if he could help. He spoke very knowledgeably regarding the situation and stated that yes; he felt he could help us. As Mr. Bode was in North Carolina and we were in New York I scanned all of our documents including back-up documents for all of our claims and forwarded all to him. Mr. Bode kept in touch with us via email; we have spoken on the telephone several times and have become very comfortable with his knowledge and professionalism. Also, as I am a true "worrier" I have continued looking into information regarding our tax situation and I came upon another web page for Mr. Bode that included testimonials which spoke of his experience with this type of tax situation as it became prevalent during the recession. This reinforced in our minds that we had made the right decision in hiring this person as our tax preparer.

I share all of this as our taxes are now ready to be filed (we do owe tax for 2012 but not the astronomical figure we thought we were facing), and we are confident that they have been prepared with the utmost care by a gentleman who has an excellent working knowledge of the situation we faced and the tax laws that were applicable to said situation.

 

Bill and Carol

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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Schedule C CPA compares 2013 Standard Mileage Rate and Actual Cost Auto deductions

IRS Schedule C CPA

Generally the Actual Cost method for deducting Auto Expense on IRS Schedule C reduces your tax bill more than using the  IRS Standard Mileage Rate method. (910) 399-02705.

Schedule C CPAs get asked which technique is better to deduct auto expense; the IRS standard mileage rate or the actual cost method? I’ll run a few simple auto expense examples for Schedule C filers. Auto expense is generally in the top three deductions on Schedule C (by dollar amount), so it’s important.

IRS 2013 Standard Mileage Rate for Schedule C

Sole Proprietorships and SMLLCs (Single Member LLC) can choose to deduct Auto Expense using the standard mileage rate. This is 56.5 cents per mile in 2013. Check with your CPA, or at least read IRS Publication 463 to fill in any gaps of this posting.  So your Auto Expense decution on Schedule C for 1,000 business miles is $565. Here’s a link to our past discussion on Schedule C auto expense.

What is the Standard Mileage Deduction really worth on Schedule C?

A Rule of Thumb: Dollars of Tax Saved per 1000 Business Miles

I find that Schedule C filers appreciate rules of thumb to help calculate how the IRS Standard Mileage Rate deduction cuts their tax bill. Some folks call it ballparking. So let’s see what a thousand business miles means in actual tax savings. Ballparking differs from the true figure, but is close enough for conversational purposes.

We’ll use 50 cents per mile, 1000 miles, and a 25% aggregated tax rate. Why? The math is simple.  Aggregate tax rate is just your IRS marginal tax rate plus your State income tax rate. So the example assumes you pay $250 of IRS and State tax on the last $1,000 of profit from your Schedule C business.

  • .50 x 1000 =$500 for the deduction on Schedule C.
  • $500 x 25% = $125 tax savings.
  • So 1,000 miles of legitimate business mileage saves you $125 in taxes.

Can you run your business vehicle 1,000 miles on $125?

No, let’s see what happens, through another rule of thumb. 1000 miles / 25 MPG = 40 gallons of gas. 40 gallons x $3.50 per gallon = $140. And of course this doesn’t even include the actual cost of the vehicle, insurance repairs, etc.

“In the past, using the Standard Mileage Rate on Schedule C came close to covering your actual costs without a lot of documentation. But now, we’re recommending using Actual Cost method for our Schedule C clients.”
– Gary Bode, Schedule C CPA and tax accountant

Our virtual office means we can serve your business wherever it is. The CPA license is essentially national. We serve a broad geographical base. For a free initial phone consult, call us at (910) 399-2705.

Using estimated mileage for the IRS Auto Expense on Schedule C

You’re expected to keep a mileage log. A notorious Tax Court case denied any standard mileage rate deduction because the Schedule C used estimated mileage. So, even though there was some legitimate business mileage, no deduction was allowed. Ouch.

You can’t switch from the IRS Standard Mileage Rate method and the Actual Cost method for deducting Auto Expense on Schedule C

The only time you have a choice between the methods is the first time you file Schedule C or put a “new” vehicle into use. So if you use the Standard Mileage Rate method for your first year in business, you’re stuck with it until you buy different vehicle. Each business vehicle is independent; you’re notlocked into a the same method for your entire fleet.

Actual Cost for Auto Expense

The actual cost method for Auto Expense on Schedule C gets complex. Why? Because depreciation and personal mileage are factors. Depreciation is the amount you can deduct for the purchase price of the vehicle this year. Here’s an example for 2013:

  • Depreciation $1,000.
  • Gas: $2,500.
  • Insurance: $500.
  • Repairs: $300.
  • Tires: $200.

So, $4,500 of actual costs for the tax year.

But, 500 of the total 17,800 miles was personal use mileage and not business related. So:

  • (500 miles /17,800 miles) x $4,500 of total Actual Costs = $126 of personal auto expense.
  • Actual Cost for the Auto Expense deduction on Schedule is $3500-$98 = $4,374.

“So most Schedule C filers have to keep a mileage either way: business mileage for the IRS standard mileage rate, or, personal mileage for the Actual Cost method”.
– Gary Bode, Schedule C CPA

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