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More about 1099’s and Keeping Your Taxes Low with Mark Toussaint, Public Accountant

It was a pleasure to visit with Mark Toussaint, a local Public Accountant from here in Colorado who also teaches accounting on the faculty at Metro State University here in Denver. Mark also has worked with his wife delivering for Doordash, so he knows accounting, he has his Masters in Tax Law, AND he knows the Gig economy, so he made a great guest for today's episode.

What I really enjoyed is, Mark is a teacher. He knows how to put the information out there in a little more plain language. I'm posting the transcript of the interview here. The audio quality wasn't the best. The arrangements I made for the interview didn't seem to cooperate, but Mark was able to use his system to record off a phone call. Mark came through very clear, you could tell by the tinny sound that I was on the distant end of the call. But the important thing is, Mark is the guy who had all the information here, so it was better that he was the one more easily understood. Here is the transcript below:

It's always helpful to get the information from the folks who know it best, so we're honored to have a Public Accountant join us for this week's episode to talk 1099s and taxes
It's always helpful to get the information from the folks who know it best, so we're honored to have a Public Accountant join us for this week's episode to talk 1099s and taxes

EntreCourier

Well hey, there, Courier Nation.. You know, if you're like me, you've been watching all the  tax documents trickling in and a lot of these, you know, they've got to be  put in the mail with the company's sending them out by the last day of January. So by now you should have gotten most of them. You might have one or two stragglers coming in. A part of what you're going to be receiving is your 1099 statements from the delivery company as an independent contractor. And, of course, all these tax documents have taxes on top of everybody's minds. And another thing,  like on my Website , a lot of the visitors I'm getting right now are looking up information about taxes, so I thought it would be a good idea to talk taxes today and especially to get somebody on here knows what they're talking about. I try to come up with information, research the information, but it's always helpful to have somebody that works this every day.  

So I'm pleased to be joined today by Mark Toussaint, and he's got an impressive list of qualifications. he owns and operates TASC Public Accounting and  CFO Service in Colorado.  He's also on the faculty at Metropolitan State University in Denver and is in the accounting department there. And he's also been on staff with large accounting firms that worked with giants, you know, big businesses. He has is all sorts of,  experience in accounting. He knows his stuff. And on top of that from time to time,  Mark also works as a dasher with Doordash. And so he knows the accounting. He knows the tax stuff and really glad to have him on, because he also knows the independent contractor gig economy, delivery world. So thank you for joining us.  Is there anything you want to add to all of that?

Mark

Thank you. Oh, I think you said a lot. I've been Avenue in accounting for 24 years now I do own TASC Public accounting and CFO Service's. Our parent company is Tax and Accounting Service Company. We're out of Boulder, Colorado. It was also this this year opened a Longmont, Colorado, office at 318 Main Street in Longmont. So yeah, it is now tax season, and I'm getting a lot of questions about 1099 and you know, what to do with it? One of the biggest questions that I've seen so far is: “They've done it wrong. What do I do?” And I don't know if you heard that on your web site where people talk to you, but I see that a lot. You know,


EntreCourier

Yeah, I see a lot of people saying I got the wrong information.

Mark

I got the wrong information. So what I have here, I've got on my screen here and we're recording this from the screen. Here is that 1099 miscellaneous statement, which is what you're going to receive from your delivery service that you work for. Over here on the left hand side of the thing, you'll see the name of the company. Let's say this is Doordash, they would have their name and address over here on the left inside. The biggest thing you're gonna see on this and probably the only thing you're gonna see on this is box number seven non-employee compensation. And that's gonna tell you how much money Doordash says they paid you as again. You're not an employee of theirs. So non employee compensation, how much they paid you. If that number does not match your records than you know, this is why people are complaining. Hey, they paid me more than that, or they paid me less than that. And they're saying I made way more. How do you know this? You know, I looked at the Doordash app and it, every week it tells you what your earnings are. And if you dig through it, it'll tell you if you had some reimbursements on there. So if you had reimbursements, that usually comes a door dash. When you go to some place and it says, use your card to pay for this service and we'll pay you back. So you go there, you you don't have a red card or which is their credit card. You don't have one of those. And to use your own personal card and I've done in a couple, you pay for the thing and then you send them a copy of the receipt, and then they added to your pay. So if that's their that's a reimbursement, and that will not be included in this non employee compensation over. That's not compensation that made you so that could be one of the discrepancies.

EntreCourier

That's a great question. Yeah, because that's something I've wondered.  I've never gone that route, so I've never in how they recorded. The question is, are they going to report that as income, or do they report that reimbursement

Mark

So they don't report it all. They reported

EntreCourier

And how do you know they did it right? Yeah,

Mark

They report it to you on your app as other payments. And it says, Reimbursement, that tells you the amount. And it's up to you to check the receipt that you have from the restaurant and with your credit card to make sure that matches okay, But when they do give, your compensation will not include that dollar amount. So that's non employee compensation. So if  that's what you're seeing out there. And you're saying, Hey, it's wrong now you know why. Okay, so now there's some other people I saw, and again, these were people who post on social media, and sometimes I feel like they just posting for attention. But I've seen people say, Hey, they I've got $2000 more compensation than even my app says so. What do you do then? What would you do if you got that, Ron?

EntreCourier

Well, you know, the first thing that I'd tell people, I guess don't go by the app, Because if you go by the app, it only goes back a few months, 

Mark

And that's that's really good advice.

EntreCourier

And that's a problem. You can't get that information from Doordash anywhere.

Mark

You can't. But you know where you do have it? Every week they transfer the money into your bank account. So if you look at your bank statements every week, you should be able to see what's in there. And when I say look at your bank statements, that might be dating myself, go online and look at the statement online. You know, they used to send out a paper statement when I was younger, which is a long time ago. They used to do that actual statement in the mail. Now I don't think anybody does that anymore, But go on. You know, you think after whatever you could look through the transactions I found out my bank doesn't for a year now, I could go back of the whole year and look things and I could even search for door dash and hop up with all the payments they sent me. So? So I've got that. They're so I would take those numbers first, add those up and compare them. But then what's happening there is again If you've got some reimbursements in there, those numbers aren't gonna match again.  

So you need to really keep track of what you're doing here. That's the biggest thing for drivers. Is no one's keeping track of it but you This is your business, you know? You need to keep track of it. I have this conversation not just with delivery drivers, but with everybody who's in business. You know, I say, Well, why don't you keep track of that? Well, I didn't have time, you know? And how do you know how much money you made? How do you know how much money is supposed to be there? You know, people do make mistakes. Maybe the bank made a mistake. Maybe someone paid you the wrong amount. What about that? You know, and they were like oh, that never happened, and you'd be surprised. So, you know, you neede to just take the time

EntreCourier

Or you get the people people that they do this on the side, you know? And then they take the instant cash out and just go out there to make a little bit of money here, there, and they're not paying attention. And these numbers, they think it looks high, but they've never really paid attention, right? So, yeah, I think you've got something there about, you know, making sure, you know, first.  What happens then is, you added it up and, especially. There's probably three different ways to go about it, If they reported as too low. I don't see that as an issue as much, but if they reported it as more than what you mean, what do you do there?

Mark

Well, your first step is to contact them. You know, you you've gone through all the steps to make sure that you've tracked it effectively, and you know what it should be. And now you're saying so let's look at my example. Right. But in just a number there, $12,598 I went to my bank and I added up and I got $10,000. Then I'm saying, Well, why did they tell me? They paid me 12,000. The only two, right? So what would you do if someone owes you money? You call him and say, Hey, pay me. And that's what I would do. I would call Doordash. Now, I don't know if you've ever called Doordash, but I have  had to call them a few times. You know, maybe something wasn't ready. So I went to go get an order and they said they didn't have it. Something like that. I call them and get routed to a call center person who's sometimes I don't even think they're in the U. S. I think sometimes they are very, their English sometimes is a little broken, and I think they're offshore. And so if you ask them anything other than you know Hey, where's my order? Can you resend my order

EntreCourier

What's on the script.  

Mark

Yeah, what's on a script, and they don't know what to do. So you're not gonna get anywhere calling that help desk, you know, just save you some time, right, don't even call that number. Where you need to go, is to one of their local offices and see if you can contact someone there, or see if you can contact that office and get a number for someone in accounting. So that's that's your issue there.

Mark

And then, like you said, if it's too low, what do I do?. Well, there's a couple of thoughts on that one. “Well, it's too low. I only have to report what they reported.” I don't know if that's necessarily true, because what you need to do is for all of your income, regardless of what it says on the 1099. So if you made 15,000 and then you get the 1099 and the 1099  it says 12,000 on it, I would still go ahead and report the 15,000. Because what may happen in the future, you may not get audited for, but Door Dash might get audited. And then they might say, Hey, you've under reported all these people and then, you know, if you under reported they're gonna have a notice of that at the IRS. They're gonna send out corrected 1099s. You see the top of that 1099? There's a box on here that says corrected, so if they change it, they'll go ahead and check that box and file it again and this form goes directly to the IRS. It goes on another form here. If I scroll up on this page, I downloaded this from the IRS, you can see the website here, and they would send this copy A to the IRS, and that's the IRS's page, and they would have corrected check box on that one so they would send this to the IRS, and IRS knows what to expect.

EntreCourier

I've heard from people that last year your read things on forums that people said that after they filed. Then they got a notification that a corrected 1099 was out. And, you know, just like you said, report the amount that you know, because if they do come back and correct it, then all of a sudden the IRS thinks you made more or you did make more and you didn't report enough.

Mark

Right. And, well, it not only raises a red flag, the IRS is probably gonna send you a notice saying you under reported your income. And now you're gonna have some additional penalties. You're gonna have some interest on there and your tax bill is gonna go up. And if you already received money back. You may owe that money back to the IRS, you know, and then saying in addition to that, So it's always good idea just to report what you made, you know, Don't worry about the about the 1099. And sometimes people always ask the question. “Hey, I didn't make over $600. I did delivery service for a couple of weeks. They didn't send me a 1099. Do I have to report it?” Same thing. If it's under $600 the company's not required to send you the 1099. It's part of a paperwork reduction act they had years ago, so they don't have to send it out on those small amounts. But you still have to report it. And if you know the IRS in an audit, they can access your bank accounts and all sorts of things, and if they see it, you know you're gonna get penalized. You're gonna have interest and stuff like that so not a good idea to leave money off. So that's where you have that. As far as  you know, correcting the erros, contact them if it is under. I would include the amount in your compensation and put the total amount in there than if they do send it corrected about. You're already done. You don't have to amend your return.

EntreCourier

Yeah, yeah, yeah, exactly. And, uh, and it brings up. I think you kind of answered it, but that brings up a different situation with a different company. One company that does their 1090 nines differently is Uber Eats. And I don't know if you've run across anybody that used them because Uber Eats decided to use 1099-K's

Mark

Well, like 1099-K is. It's not the same as a 1099-Miscellaneous. That says how much money was paid using credit cards. And so you, as an independent contractor from Uber Eats, would receive that if you received credit card payments that they processed for you. So I get 1099-K each year from Intuit, which is a QuickBooks company. QuickBooks processes my payment when you come to me and have your taxes done. You know, I do a special for for drivers starting $169. And when they pay me that $169 I run their credit card. And, QuickBooks takes care of that, puts the money in my bank account, and then they send me at the end of the year 1099 km. And that's the amount of credit card payments I've received. That's not necessarily all of the income. So you have to, what Uber Eats is doing is they're completely treating you as an independent contractor, and they're taking off their fee from what the charges are before they put in the bank, I believe. And then, youyou have to keep track of the rest of it.

EntreCourier

Yes, that's at least what they're,  that's the narratve they're trying to create, at least by using that. Now, the delivery fees that they charge the customer don't line up with what they pay the driver, so it's kind of a sham, but that's another story altogether. I think it's all them  trying to create that picture that it is. It has been a contractor relationship. But the problem is, is that you know the threshold is a lot higher. So a lot of Uber Eats drivers are not getting 1099 of any kind,

Mark

Right, so they so they don't get a 1099 because the driver is collecting their own money. They're collecting the money and then they're paying a fee to UberEats. Doordash is in a  situation where Doordash collects the money and then they pay you a fee for driving. That makes sense. So you're receiving the income from Doordash. The UberEats driver is receiving the income from the people ordering

EntreCourier

Right. And what that means is you have a higher probability of not having anything reported by Uber Eats. Cuz you need a whole lot more money before they send in your reporting out. And I think that goes to what you're saying that you don't want to leave money off your report,

Mark

Right. You don't want to leave money off there, so it's up to you every night. So if I do Uber and someone doesn't pay with a credit card, Uber is not going to give me a report of that. They're not gonna give you 1099 with that money on. They're, all they're going to do is say, Hey, here's the credit cards we process for you and that's just a credit card processing statement. That is not an income statement. That's a credit card processing statement your income statement would be anything that Uber paid you. And from what you're telling me that Uber doesn't pay that way uber you collect all the money and then you pay uber a percentage of it.

EntreCourier

Yeah. Yeah. So let me kind of transition to this andyou get that 1099 and let's say, like the example that you've got there, the one that says $12,000. And so I look at that, and I say, Holy crap, that means I gotta pay my income tax on that? And I gotta take 15% on that, you know? So all of a sudden, now I'm looking at $12,000. I'm looking at paying maybe three or $4000 in taxes. Is that the case, with that big of a number?

Mark

Well, that is the case. So So you mentioned the 15% there. Let's look at that. What that is is, uh, let's do12 uh, my calculator here 12,598. And we multiply that times, there's a little bit of reduction in their self employment tax. But just as an estimate will say 15.3%. So that's $1900 right there. And what that amount represents is Social Security and Medicaid. So when you're an employee, you pay into these two funds. That the government has one is Social Security, which when you turn, you know, in your sixties you go ahead and claim that, and they give you a check each month and they say You're a retired person. Now you get Social Security checks, and then Medicaid is an insurance policy. So when you are, you know that same age when you're getting or so security, they give you a sort of medical coverage. You know it's slight. Medical coverage doesn't cover everything, but it is medical coverage that seniors have. So everybody pays into that if you're an employee or if you're self employed. So if you're self employed, you pay that 15.3% on your total earnings. And when I say told earnings, that's your, that's not this number here, this 1099 miscellaneous number because you have some expenses you can deduct from that. 

So you can say, Hey, I drive mileage. For the year 2019 the IRS allowed you to deduct 58 cents per mile that you drove, so  whatever miles you droveand and I run across this is t people say, “Well, I had this app and it recorded my mileage.” And here I've got 1000 miles and I made $12,000, I say you drove more than 1000 miles. You know, your app didn't work, and that's a big problem with those APS and people turn them on and they don't always track the mileage. They shut off halfway there. Phone shuts off whatever, or it just doesn't work. You know that GPS doesn't work, and so is tracking everything. So what I would recommend doing is opening up your little notes section in your phone. I have one note that specific for your mileage record your date. Record what it says on your odometer as the mileage When you're getting in your car when you're done and you're getting out of your car, record the mileage again. You got your beginning. You got your ending subtract the two, that's how many miles you got that day. So it's as simple as that, you know, you record

EntreCourier

Mark, is there any, oh I'm sorry. I don't mean to interrupt there. Is there any truth to this? I've heard that auditors tend to trust the written record better than they do the GPS records. Is theree anything to that?

Mark

Than the GPS records? I haven't heard anything about that. The requirement is a written log. So it's up to you to, you know, write down what the mileage is. I have heard stories of, oh, somebody went for an audit. And they then brought in the notebook with the log in there, and the guy turned over the notebook and it said printed in 2021. And they were auditing him for 2018. And they said you just did this. This isn't the log. You just did this last night. You made it up. You gotta be careful about that. 

EntreCourier

That's why you want to want to keep that record on an ongoing basis

Mark

That right? Yeah. So? So that's what I do. I track my mileage daily. I go into my notes and just do it there. I tried the apps I tried one through, there's one that's recommended by Doordash. Tried that when it wasn't very good. The QuickBooks has one, I thought Oh, because my quickbooks right away, that didn't work. Half the time. It wasn't even running. It wasn't recording anything. I turn it on, and then a couple months later, the app would be it would crash or whatever, and it wouldn't be tracking my mileage. So, every time I get my car, I take the 30 seconds, you know, I know we're all in a hurry, hurry, hurry, hurry. But I take the 30 seconds to just jot down my mileage. It really doesn't take that long. And then I save it in the same note, So every day, I just open up that same note and just add to it. And it's, you know, I tracked it the whole year that way, and now I'm done, and I got it. So, you know, I don't know what else to tell you.  People come to me and they say, Here's my mileage. And I say, I know you had more miles.  “Well, I don't know how to track it”  There's how you do it.

EntreCourier

Yeah, I got a question for you. You hear some people say that Well, I don't itemized my deduction. I take a standard deduction. So it doesn't do me any good to track expenses. What do you say to them?

Mark

Well, as a delivery driver and gig worker, these aren't itemized deductions we're talking about. This is business income, and I don't have the form pulled up on my sscreen so I can't show you. But it gets reported on me Schedule C, which is business in loss , or income and loss from business. And there you report your income, which here is our non-employee compensation. And then you get to reduce that income amount by expenses that you have of your business. And so let me give you some examples of expenses. For door dasher kind of limited. You really don't deal with the customers other than bringing them their food. So the kind of expenses you would have is one the mileage that you wrote down, that's the biggest one. And then the other expensive might be You bought a flashlight. You bought a bag. You bought a space blanket. Any of those kind of things you needed for your car. Those of the other deductions. Now some people always ask me. They say they say, Well, you know what? I changed my oil in my car. I get to deduct that, don't I? And the answer is yes and no. So, yes, you can deduct normal wear and tear expenses. Oil changes gas. Put new tires on your car, car washes. You can deduct all those things or, as an alternative, 58 cents a mile. It's not both, it's either, or so you either deduct the mileage or you do the expenses. Yeah, so you have to pick one and you do it that way. And then once you pick when you're kind of stuck with that method going forward so you know you want to keep it at that method. And usually what I found on mileage, the mileage rates that 58 cents a mile that debt works out way better than actual expenses.

EntreCourier

Yeah, I think the only time that you ever see it better to use the actual expense method is if you've got a really, really valuable card, you could write off a lot of appreciation. But I would say you're kind of nuts for using is in that car for delivery because you're killing the value.

Mark

Yeah, well, I got other opinions on values of cars. I've owned a lot lot in my day and I've never a car keep its value, no matter what, I did to it. So I think your question there was, and I don't buy that that. I think your question was I don't itemize. Why should I keep track of my expenses? Because these expenses when 1099 or a gig worker are deductible from the income on your schedule C has nothing to do with your itemized deductions. You still get your standard deduction. But what you do want to do is you do want to try and reduce this 1099 income as much as you can because that Social Security Medicaid is a completely separate tax from your income tax. And so the money you have there, you're gonna say that you're gonna pay that 15.3%. Then on top of that, you're also gonna pay income tax on that amount. So there's two. Tax is when you're self employed, and so there's two taxes. When you everybody, you just don't see it. They take it out of your paycheck before they give it to you.

EntreCourier

Exactly. Yeah, it's not that we're being charged, well, we ARE being charged or sort of. It's not that the government is getting anymore because we're self employed. The difference being is when you're an employee, the employer pays half, but when you're self employed, you're also employers part.

Mark

That's exactly right. That's exactly so. That 15.3% is the employees share of the so security Medicaid and the employers share of the Social Security and Medicaid and you when you're self employed, you are both like you said this, the employees and the employer. So you're paying both of those. So yeah, so it does look like to some people they're paying more. However, that comes with the benefits of being self employed. There are also I just posted an article that I just came across. What I was looking up something else that some of the companies, Lyft and Uber will allow you to run your business as a company and accept an EIN number instead of your Social Security number. So that, um along with those lines allows you to form an LLC or even an S Corporation and drive under those. So that and that's probably a discussion for another time when we've got another half hour to talk. So, that's that's a whole nother conversation we could have. But just know that that's out there. I don't think that Doordash allows that right now I've looked for it because there are some tax benefits and that can reduce. Actually, an S Corp owner doesn't pay self employment tax, but they do have to pay a wage out. So But like I said, another time we could discuss why that's a benefit, 

EntreCourier

Sure. Yeah. And definitely something you, want to get a grasp on, what are the advantages of doing  that, And especially if you do a lot more self employment work? That's that's where it really starts to come in. Let me ask about a couple of deductions, and I hear people mention every once in awhile. What about taking the home office deduction as a driver?

Mark

Well, you know, it's probably allowed, but I don't know if you have any home office activity that would make it allowed. Do you know what I'm saying?  Like you could do it if you had some home office, activity. And so,  home office activity would be I have an office in my house. That is a specific room. It can't be the dining room table. It can't be. You know, I sit in my living room chair. It's gonna be a specific room that you have set up for doing business activity and a substantial portion of your business activity has to take place there.  

EntreCourier

That's your problem right there.

Mark

So maybe your business activity and that I think that's where you get disqualified because your business activity is really Hey, I turn on the app and I go drive, you know? So I think that's where you lose that. You lose that home office deduction right there.

EntreCourier

I've heard some people throw out there that they talk about taking their meals, writing off their meals while  they're out driving because they say, Well, we're traveling so we can write it off, right?

Mark

Yeah. No, the IRS says no on that one. So meals, meals, expenses, meals and entertainment expenses oddly, um, would be not included in that. That yourself? Well, that's your own lunch dinner. You can't do that if you're traveling away from your home and you had, you know, let's say you had to go to a business meeting somewhere in a different state yet those meals would be deductible. And only half of those meals are deductible anyway. So but no, the meals while driving are not deductible. Repeat that not not not. I hear that a lot too. Hey, my friend told me she eats all she's out, she deducts it, and and I love that when they say, Well, she does it and you know what she may do that And I always tell people you know what you may speed while you're delivering, But if you get caught, what's gonna happen? They're gonna give you a fine and a penalty, and you have to go to court. And so that's what's gonna happen with your tax return, too. If you put a bunch of stuff on there, that's that's not allowed. You may get the refund right now, but later they're gonna come back and want their money back and fine and penalize you and maybe even send you the tax court, which is a, you know, real thing. So, you know, then you're digging on that end of it. 

EntreCourier

Well, talk real quickly about what kind of things you know, what's the likelihood of something happening like an audit. What kind of things could make that more likely happen?

Mark

Well, I feel like if you have put some numbers on the return that don't make any sense. Okay, So I'm I'm a delivery driver. I've made $12,000 I drove 99,000 miles for the year. I think that's gonna set a red flag. You know, I'm being a little extreme there, but if you're saying you draw, you know, my deduction for mileage is you know exactly what I made an income. They know that's not true. Why? Because they're receiving I put up this site before this Gig Center. It talks about There's article on here. If you go through this, this is a IRS.Gov. You could see the link right here. Gig-economy-tax-center. If you just go to IRS.gov and type in gig economy, this will come up, but it gives you some links down here to some other information about gig workers. You know, what's a gig? Workers. Somebody drives a car for book rider deliveries. That's a gig worker. You know, other people are Airbnb and stuff like that. So if you are putting numbers on there that a crazy the IRS is saying that this gg work is done by so many people now that they have our tracking the numbers and they know what's realistic. So that's one way you're gonna get audited, if you're putting unrealistic numbers, anything if you're if you're a delivery driver and you're saying you have a home office, that might be a trigger, you know, because we just talked about that. Deducting your meals, that might be a trigger. Okay. And I know some people I took an Uber not too long ago when the guy said, Hey, you want a bottle of water? I got about a water back there and I was like, Oh, cool, you look, I've got bags of peanuts and I was like, All right, so I took one, but he had to pay for that stuff, and those are actually deductible expenses. So he paid for those things. You know, I don't know if I tipped him anymore because of it, but that's another thing. They got together, you know. I like the bottle of water and peanuts. They still gave what I gave up her tip. So that's how that is. Uh, what's he can deduct those things, But, you know, if you're so if you're putting outlandish numbers on there are things that don't seem realistic you're increasing the chances of being audited. And then, as with the IRS, they also do what's called random audit and certain areas they picked and choose on and and the amount of time and effort the IRS is spending, setting up Web sites for gig workers and things like that, youu could imagine that they're probably on their radar. So there's probably gonna be more audits that types of people than other areas. So just being there, just being a gig worker sets you up for the chance of you might get audited. You know, you could look on there. You can look at all over the Internet and search for how often am I gonna get our How am I gonna get audited things like that? And there's all sorts of opinions out there, and there's there's some things that say there's a ah, 0.2 chance you're gonna get audited. But I guess any chance is probably bad, right? They get you again, you know, Look back to it. You know I'm speeding. What's the chance? There's gonna be a cop sitting down the street and I don't see him. You know, same thing. You know, they're out there looking for you, is it is random. And there's also red flags that are set..

EntreCourier

You consider the fact that it's not uncommon for delivery or rideshare drivers to put on 20 or 30,000 miles on their car, you know, And that's the high enough number just in and of itself, that for most other professions that's gonna raise a red flag. If you're claiming that many miles

Mark

You know what I think you know what I think is out there. What I tell people is I think that the IRS has enough data right now that they know and they and they know from some of the service, is that report some of this information, you know, they ever they keep reports of it. Um, some of the drive share, I've seen some of the apps actually show how many miles that things were and stuff like that.  Doordash isn't one. But,  you know some of them do that. So they can tell you like, Hey, we pay a dollar per mile or we pay80 cents per mile for these things and the IRS knows those things. They also know that in between deliveries in between rides, you know, maybe there's some driving around that goes on. You know, you're driving to a location where people might be that kind of thing. So those miles add up to. But they know these things, and they have statistics for it. So they have range of where it should be.

EntreCourier

Yeah, and that's why I think it's important. You know, people don't realize probably what you're filling out your schedule. See, there is a place where you enter the type of business that you're running and that that kind of help clarify that it's not putting in that you're doing delivery work. You know that all those miles might look out of place.

Mark

Yeah, you're stumping me on that, because I was trying to think I was trying to think What is the actual one that I do and I don't remember up in, but I think it says Courier on there. I think it's the is the section that you picked for that. And you can put delivery driver. Yeah, Yeah, there's a specific code that you put in on your tax return, and it tells what it is, and they have a list of, um and I think it's a false under courier service, courier or delivery I think it says. And I think that's the one. I don't remember off the top of my head. So you did stump me a little bit there. Sometimes that happens. But I think the last time it happened was 1980, no I'm just kidding. I don't know all the answers. I just I just pretend like I do 

EntreCourier

Well, here's the thing, though. I mean, you, you do this, This is what you do. And there's still things you gotta look up, you gotta find out

Mark

There are, you know, I've taught income tax,  classes at the college level for over 12 years. And I you know, I always tell them I used to bring in when they used to do paper books and not everything online. I used to bring in a copy of the Internal Revenue Code and the regulations and then that's a you know, they're these books that are three inches thick, and there's, like, nine of them all together, just for the law, part of it. And then they've got all these publications. You've got letter rulings you've got, you know, so you can't know every little bit of it. You can, you know, the things you see more frequently. You know those. And then you know enough to Hey, I got to go look this up, because I remember there's something there, but I don't remember all the details with it, so I was gonna look it up. So when you're paying someone to prepare your taxes, they're looking up those things. You know, maybe you could say, Oh, I looked him up. I have done the thing reminds easy. I can do it. And you know some of these for these people to get these 1099s. I'm all for people doing their own tax returns. You know, I get that I make my living doing this, but you know, some people don't need me to do it for them, you know, it's really easy, and they can do it themselves. I was pretty appalled When I saw that I called H and R Block to find out what it costs, and they told me anywhere between 350 and  380 dollars to do a schedule C return with nothing else on it. And I said, That's crazy on That's when I decided, well, you know what? I know how long this will take me. I'll charge $169 plus the what Intuit charges me from the tax software, which is about which is another thing. They start out in $45. Then, by the time tax season's at the end, there up to, like, $70. So they raised their prices as time goes on, so you're better off doing it sooner than later. So, yeah, so, you know, I thought  I couldn't see charging someone $350 for that, But that's just me. You know, I'm not as greedy as they are. 

EntreCourier

Well, talk about that just a little bit because, you know, there's so much information that it's impossible for us to try and cover it any kind of depth and, you know, half hour we could do several of these and not get anywhere close to covering everything. At what point do you think somebody should get some professional help for doing their taxes?  How can you determine when it makes sense to get somebody to help you when you feel comfortable trying to do it yourself,

Mark

I feel like the people who come to me who really need help for people who they looked at, their taxes and the Maybe they've done it last year. They did the year before themselves. And they said, You know, I really had a hard time finding this information. I looked up. I wasn't sure I didn't feel confident in it. I didn't. You know, I read at one place I saw one thing. I read it another place. I saw something completely opposite, which happens when he starts searching on the Internet. You know, God forbid, I went to Facebook and took information off anybody there who didn't, you know provide me the source link. I read through some of those posts and I'm like, Who are these people? So you know, there's, You know, if you're one of those people were like you looked at it up. You don't know where to put it. You can't make sense of the instructions. Seek help. Okay, there are places out there you could get help from. I know, Uh, just on top that you know, TurboTax they always say free tax free tax  free tax. Unless you have business. Right. And then there's there is a There is the volunteer income tax Assistance program. Those are in most major cities, most major towns have them, it's called VITA  V. I. T. A program. It's an IRS program with volunteers who take a test to prepare easier returns. And they go to a library on the weekends and people come in and get your tax return prepared for free. So looked that up: VITA. I think I'm not sure about the website, but it's if you type in V I T A or volunteer income tax assistance that will come up and you'll see where it looked for that. It'll tell you where locations are, so you can have that done. I think they'll do gig workers who have small amounts without deductions. I think if you have a full business, they might say no. Turn you away and tell you to go talk to an accountant.

EntreCourier

Yeah. What do you do about some of these places that uh yeah, you're right. I almost took a job at one time for a place that it was It was a chain, a national chain. They did the dancing  statue. Basically, what they did was they put these people through the training on how to run the software. And you've got all these people doing tax returns that don't really know a whole lot more than the average person on the street about how the tax code works. they just know how to run the software.

Mark

Right, and they've hired them. And if you go on and and and you could tell because you'd be looking on payscale.com and look up tax preparer, It'll tell you what a  HR block employee who does that makes they pay them anywhere from 12 to $15 an hour. And so they're not really versed in the tax law. Um, if I made 12 or $15 an hour, I would be in trouble because I have student loans that have been haunting me for years, you know, over $100,000 I would never, ever be able to pay those off. And it is I might not ever be able to pay those off, but, you know, so that's those people. They they aren't trained to do it. They're trained how to enter some stuff in the software, and they're no better off than you doing it yourself, you know? So I would my opinion, you know, I don't want to mock anybody I use. Sometimes I use TurboTax just cause I can, you know, do it quickly. I don't have to pay for the tax software that mine is for a business. Software, for me is a lot more than it is for, you know, some of the free offers and stuff like that. I could get through Turbotax. So I've done in the past for myself, you know, just trying to save a buck. And, you know, that's a good way to go for a lot of people, you know, do the turbo tax figure on your own. There are places out there. You get help. Like I said, the VITA assistance, the There's also a taxpayer advocate. You can call if you have questions. All things you can locate on the IRS website. They have information on that so you can look up those things? I would stay away from Jackson Hewitt, H & R Block. I don't know where the other ones are. Liberty, I don't think they're prepared. Yeah, someone if someone doesn't have to stay at least a degree in accounting and even the degree in accounting isn't really geared towards tax. Um, you know, I went one step further than that. I get my master. My master of law degree is from DU the law school there, Master of Taxation. So I've mastered in it. So I took another 12 or 14 classes while I was there, and, you know, so I know a little bit more about the tax, all that most people do these people that they're hiring. You know how to do the software and pretty much know how to do some simple tax task.

EntreCourier

And folks, if you're listening. I'm gonna put Mark's contact information in there cause he is able to help some folks out and as I understand you can work with people nationwide. Maybe the question might be around specifics around state taxes might be a little different, but

Mark

State taxes might be difficult

EntreCourier

if you've got some availability.

Mark

Yeah, if you want,go to my website, which is its tax and accounting service company. So the acronym TASCPublicAccounting.com. There's a link up there. You can schedule an appointment with me either in in person if you're in here in Colorado, in northern Colorado. Um, you could do a phone call with me wherever you are, or you can also just send me your documents, take a picture of them, send them to me, and I can do your taxes remote so I can do it anywhere in the United States. So All right, Ron, I appreciate you calling me and, uh, you know, we want to set up some time to talk about S Corp and things like that, I'd be more than happy to do that. So, you have a great day, Ron. And thanks for calling.

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