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Mistakes Mistakes Mistakes

By
Services for Real Estate Pros with William T. Zumwalt CPA, CTC "The Tax Coach for REALTORS"

Just had a realtor in my office that had her 2012 tax return prepared by her CPA of many years but felt that they had made some mistakes.  She had multiple rental units as well as a successful real estate business.

First red flag was that her mileage on her car was an even 9000 miles and showed no other miles or total miles for the year. I asked her how many miles she drove and she said it was more like 24,000 miles per year. She had just bought a new SUV in 2012 and she could clearly tell her total miles driven. The CPA had used the standard mileage rate of 55.5 cents per mile (given the new SUV this was likely the wrong method to use).

Next problem was that she had a note on this car and paid some $2400 in interest and she had tolls that added up to over $600. If you take the standard mileage rate repeat after me “Standard rate plus business usage of interest expense plus business usage of tolls equals car expense. Many preparers forget to capture the deduction for interest expense and tolls that are added to the standard rate.

Be sure to review your tax return before it is filed. Even the best of us make mistakes and the numbers on the return are your responsibility.

Bill Zumwalt
Helping REALTORS with Tax Solutions and Solving Tax Problems for REALTORS
REALTOR Tax Preparation, REALTOR Tax Accountant, Tax Preparation Tulsa, OK
The Tax Coach for REALTORS

William T Zumwalt CPA,CTC, PLLC
5416 South Yale Ave
Suite 120
Tulsa, OK 74135
918-583-1040
888-773-9323
Bill@TeamZumwalt.com
www.TeamZumwalt.com

Kathy Stoltman
Ventura, CA
RETIRED

Thanks Bill, I am meeting with my tax professional in a few hours.

Mar 22, 2013 03:20 AM
Lori Bowers
La Quinta, CA
The Lori Bowers Group

I did not know you could take the standard deduction and then the interest and tolls too? How about repairs?

Mar 22, 2013 03:44 AM
Anonymous
Bill Zumwalt

Hi Lori, looks like you may have an amended return in your future.  As far as repairs they are included in the standard rate. Generally, you have a choice each year to take the milege rate or actual expenses. Once you start using the actual you can't go back to std. Also included in the rate is depreciation. This means that even with a car that you have taken the std rate you can have a gain or loss when you sell or trade in. Almost all agents are unaware that they just  lost a big deduction when they sell a car that used the std rate

Call me and I would be glad to look for any missed deductions

Bill Zumwalt CPA

Certified Tax Coach 

Serving Real Estate Agents throughout the US

Mar 22, 2013 04:24 AM
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