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Super Contributor *

What account do i enter gas receipts If I deduct mileage and not actual expenses ?

Hello again, I have been entering my gas receipts in an expense account which i know is not right because i use the standard mileage deduction instead of actual, I use the vehicle for both personal and business use so I am unclear as to what account type to post my receipts to, I use the company debit card to put gas in so it comes out of my business checking account so I need to account for the debit in checking without it going in profit and loss report as an expense.... also I have the same problem with donations to the local school and American legion, they are not non profit so not deductible but i have then in an expense account so I'm assuming this will work the same as the gas receipt account.... and third is bad checks, i have been lucky enough to only have had one so far and the customer came in and made it right but when it came through my bank feed in QB I put it to an expense account then when the customer paid the bad check amount when it came through bank feed i put it to the same expense account to zero it out, same question as the other 2 what account type should I use in this case and is that the way I should be doing it ?

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Best answer 02-15-2019

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Established Community Backer ***

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?


@KAOS wrote:

I realize that, that is why i am asking the question "What Account" for it not to show on profit and loss


All expense accounts show on the P&L

 

I think there is a point of confusion here.

your business spends money and your record those expenses, auto expenses included

 

then at tax time, if you elect to use the mileage deduction, when you transfer the numbers from the company P&L to the tax form, you do not transfer any auto related expenses, including auto fixed asset depreciation

 

The tax form and your business accounting will not match when you take the IRS offer for things like mileage, simplified home office, etc.  And that is fine.

View solution in original post

Established Community Backer ***

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

This is Not business: "also I have the same problem with donations to the local school and American legion, they are not non profit so not deductible"

 

Unless you can show where they Printed a thank you and your business is listed. That would make it Advertising. Only a C Corp has any charitable deduction provisions at all.

 

"but i have then in an expense account so I'm assuming this will work the same as the gas receipt account..."

 

You seem to be using the business for Non-business events = Equity Out or Loan to you.

 

"and third is bad checks, i have been lucky enough to only have had one so far and the customer came in and made it right but when it came through my bank feed in QB I put it to an expense account then when the customer paid the bad check amount when it came through bank feed i put it to the same expense account to zero it out"

 

That should be Balance Sheet activity, if you are getting it back. Or, use one Income account that shows this, not expense. Here's why: Look at the tax form this entity files. There is one line for Income from sales, one line for COGS, and one line as "contra-income" or Negative income, for Returns/Allowances. That is what you describe.

 

That tax form is the best reference for your accounting.

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17 Comments
Anonymous
Not applicable

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

If the gas is a business expense, then something like Auto:Fuel, or even Auto, if you don't care about the details.

Super Contributor *

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

It is an expense but cant be deducted as an expense because i use the mileage deduction so I would like for it not to show up in the profit and loss report as an expense

Anonymous
Not applicable

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

You can do whatever you want in your books.  Just because an expense can't be deducted doesn't mean you can't record it. 

For example, I record my lease payment as an expense, but I may or may not include it directly on my taxes or deduct based on mileage.

Super Contributor *

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

I realize that, that is why i am asking the question "What Account" for it not to show on profit and loss

Established Community Backer ***

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?


@KAOS wrote:

I realize that, that is why i am asking the question "What Account" for it not to show on profit and loss


All expense accounts show on the P&L

 

I think there is a point of confusion here.

your business spends money and your record those expenses, auto expenses included

 

then at tax time, if you elect to use the mileage deduction, when you transfer the numbers from the company P&L to the tax form, you do not transfer any auto related expenses, including auto fixed asset depreciation

 

The tax form and your business accounting will not match when you take the IRS offer for things like mileage, simplified home office, etc.  And that is fine.

View solution in original post

Established Community Backer ***

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

Stop Using the business funds for this. You need to pay Personally.

 

Right now, you took a Draw or Distribution from Equity. We don't know your entity type. It could even be Shareholder Loan. Every entry is your name as Payee and Not Fuel, Not Expense, and not Details.

 

You have a lot of tax regulation questions, so make sure to work with your own CPA. The QB user forum is not the place to get tax advice.

Established Community Backer ***

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

This is Not business: "also I have the same problem with donations to the local school and American legion, they are not non profit so not deductible"

 

Unless you can show where they Printed a thank you and your business is listed. That would make it Advertising. Only a C Corp has any charitable deduction provisions at all.

 

"but i have then in an expense account so I'm assuming this will work the same as the gas receipt account..."

 

You seem to be using the business for Non-business events = Equity Out or Loan to you.

 

"and third is bad checks, i have been lucky enough to only have had one so far and the customer came in and made it right but when it came through my bank feed in QB I put it to an expense account then when the customer paid the bad check amount when it came through bank feed i put it to the same expense account to zero it out"

 

That should be Balance Sheet activity, if you are getting it back. Or, use one Income account that shows this, not expense. Here's why: Look at the tax form this entity files. There is one line for Income from sales, one line for COGS, and one line as "contra-income" or Negative income, for Returns/Allowances. That is what you describe.

 

That tax form is the best reference for your accounting.

View solution in original post

Super Contributor *

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

OK.... Thanks again guys for your answers, I fully understand the tax regulations and what i can and cant deduct, I'm not looking for tax advice, I guess I just thought I could get the profit and loss report to match what will actually be income and expense so I could print the report and have all the information I needed to file my taxes from a single report, I wasnt sure that if I tracked mileage in quickbooks if it would go into profit and loss report and show double expense with gas receipts being entered also, I was just trying to get the P&L as close to reality as possible, advertisement on the donations and income on bad checks, thank you thats what I needed to know :smileyhappy:

Established Community Backer ***

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

"I guess I just thought I could get the profit and loss report to match what will actually be income and expense"

 

Yes; that means Not Posting as expense, things that do not Qualify as expense. Do not confuse Cash Flow as Expenditure and Expense.

 

"I wasnt sure that if I tracked mileage in quickbooks if it would go into profit and loss report"

 

 

It's a Mileage Log; not actual Expense. That will be used to compute your Allowance on the tax prep.

 

I don't see where you told us this is a Corporate Owned vehicle or a Personal Vehicle or what is the Tax Entity type. All of this matters to your topic. We are doing our best to answer Blind to the facts.

 

"advertisement on the donations"

 

Let me help: Don't use those two words as if they are Synonyms. If you made a donation, that is Not Business Expense. If you have proof that you created Advertising, that is Advertising. Get a copy of the Thank You in the event program that lists all businesses that supported the event  and keep it on file, for proof of Expense.

 

Super Contributor *

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

"Yes; that means Not Posting as expense, things that do not Qualify as expense. Do not confuse Cash Flow as Expenditure and Expense."

That is exactly why I am asking these questions, I know they are not expense that is how i entered them not knowing how to use quickbooks at the time and now am just going back and trying to  fix my mistakes and take them out of expenses and put them where they belong...

 

"Let me help: Don't use those two words as if they are Synonyms. If you made a donation, that is Not Business Expense. If you have proof that you created Advertising, that is Advertising. Get a copy of the Thank You in the event program that lists all businesses that supported the event  and keep it on file, for proof of Expense."

 

This was a for 2 rodeos, in return they hang a banner in the arena with my business name and number so advertising will work, they ask for donations so thats what i called it, i am terrible at explanations.....

 

"I don't see where you told us this is a Corporate Owned vehicle or a Personal Vehicle or what is the Tax Entity type. All of this matters to your topic. We are doing our best to answer Blind to the facts."

 

Sorry for my lack of information, this is a personal vehicle that I use for normal personal use and I have no bank in my town so for the business I drive my deposits 46 miles twice a week to the bank, also to the nearest town if I need anything for the business so I keep track of the mileage for business trips and only deduct that, my personal use is limited but I do drive to and from work which is 5 blocks from my house, I pay for half my gas and i use company debit card for half, I am sole owner of the business... I take my total mileage for the year and enter it into turbotax then enter mileage used for business only and the rest is personal which is not deducted, When i deposited downloads from bank feed the gas debit card purchases came through so i just put them in fuel expense account kowing I cant deduct them but NOT knowing how else to do it, now I am trying to fix it... I have several thousand personal equity in the business I can use my equity account  instead of expense account if thats what I need to do but then it seems I am paying for business fuel unless I can pay myself mileage from the business which I have no idea how to do....

Established Community Backer ***

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

"and now am just going back and trying to  fix my mistakes and take them out of expenses and put them where they belong..."

 

This still doesn't tell us the tax entity Type: "I am sole owner of the business"

 

Are you operating as a Sole Proprietorship? If so, the Spending of business funds for Non-Business expense isn't expense, but Expenditure of Owner Draw = from Equity. Put your name for payee and from Equity Draw. Not Fuel Expense.

 

"This was a for 2 rodeos, in return they hang a banner in the arena with my business name and number so advertising will work, they ask for donations"

 

Did you take a picture of the sign? That's all you need as Proof of Advertisement.

 

"so thats what i called it, i am terrible at explanations....."

 

You're doing fine; they really should know better how to get funding, because they are overlooking some potential.

 

"so I keep track of the mileage for business trips and only deduct that, my personal use is limited"

 

That's fine.

 

"but I do drive to and from work which is 5 blocks from my house, I pay for half my gas and i use company debit card for half"

 

That's Meaningless. Don't split Operating Cost. Track mileage and pay everything Personally. There is no "half."

 

"When i deposited downloads from bank feed the gas debit card purchases came through"

 

Because you used the Company Checking account.

 

"so i just put them in fuel expense account kowing I cant deduct them but NOT knowing how else to do it"

 

Owner Draw from Equity for Personal.

 

"if thats what I need to do"

 

Yes, that is the Tax Regulation.

 

"but then it seems I am paying for business fuel unless I can pay myself mileage from the business which I have no idea how to do...."

 

No, you cannot Pay Yourself for mileage. The Mileage Allowance has a fuel component. Let's do this Simple analysis: you stated you intend to pay Half fuel personally. But you also described the Reality is that most of the use might be Business. You are Cheating yourself, with your "half" concept. Concepts are fine, but following the Tax regulation provisions is the better option.

 

Super Contributor *

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

The business is an LLC, I treat myself as an employee and pay myself a W-2 salary.

 

 

Established Community Backer ***

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

Who gave you this guidance? "The business is an LLC, I treat myself as an employee and pay myself a W-2 salary."

 

Remember that on one of my earlier answers here, I pointed you should work with your own CPA. Here's what you just told us:

 

"My LLC filed the paperwork to be treated as a Corporation."

 

Or, you Thought the Concept is fine, but never filed the paperwork with the IRS?

 

Because you also told us this: "I fully understand the tax regulations and what i can and cant deduct, I'm not looking for tax advice,"

 

But it seems like we are Pulling Answers from you, when the details should be Provided, because you are asking how to apply the Tax Regulations for what is needed in the accounting.

 

Because you told us this: "I take my total mileage for the year and enter it into turbotax"

 

Which is not Available as a tax reporting function to an Employee. You cannot list on your 1040.

 

Then, you told us this: "I am sole owner of the business"

 

But you never stated: "I am the Sole Shareholder and an employee of the S Corp" or whatever applies.

 

Let's review: The Business Taxes are filed on:

Sched C, part of your 1040

1065

1120S

1120

 

See how only 1 of 4 options applies? And that drives everything you are allowed to do or cannot do.

 

Example: For Sched C or 1065, you are not allowed to be paid through Payroll. For 1120 and 1120S, you are not allowed a Mileage Allowance.

 

For Sched C and 1065, you take Draws from Equity, not Payroll.

 

For 1120 and 1120S, there has to be Payroll First, not Draws.

 

Everything seems to be on Both sides of the fence at this time. We don't know this stuff for you. You have to know it and be able to give us the perspective that applies to your Tax Entity Type.

 

So, yes, you keep asking questions that can only be answered in perspective of the Tax Regulations that apply. And so far, you described a mixed batch of things that should never go Together.

 

So, we are confused.

Super Contributor *

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

Sorry got kinda crazy around here, I will file as an s corp on 1120s, so i pay myself a w-2 salary and do not take owners draws, this is my first year of doing taxes with this business so my comment of using turbotax to enter mileage was from 2 previous businesses I sold and another business I still have... I have not yet filed taxes this way so I confuse myself as well, so I have plenty of equity in this business so if i take the gas receipts out of the expense account and put them in owners equity than It is myself paying for the fuel, then I beleive I can reimburse myself for the business miles driven and that would be an expense on the 1120s, is this correct ? I am going to an accountant to get my taxes done so I know everything will be right but would like to get this straightened out in QB first so I can print all the reports to take with me...

 

edit: I think i misunderstood the owners equity thing and maybe i should make a loan from owner or loan from shareholder account to put this stuff in... I did not have quickbooks set up as it should be for an s corp, I dont think i even need owners equity, anyway I think I got it figured out as I have read another post that qbteachme answered someones question, I need to fill out mileage report....

Established Community Backer ***

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

This is more confusion: "I think i misunderstood the owners equity thing and maybe i should make a loan from owner or loan from shareholder account to put this stuff in"

 

Let's step back to review Facts: You are the Employee of the corporation. You never use Corporate Funds for personal, and that includes operating costs for the Personal Vehicle. You pay Personally for fuel. You will submit a Proof of Business Miles to the employer and get reimbursed for that per the IRS mileage rate under the terms of An Accountable Plan.

 

Corporations have no Owner; there is no such thing as Owner Draw. The Supreme Court ruled that a Corporation is its own Entity. It cannot run itself and hires Humans to do that work.

 

Anything you spent in 2018 from Business resources (cash, checking, credit card) would be Shareholder Distribution from Equity, if you are the only shareholder. Otherwise, it is Shareholder Loan as Other Current Asset, to be Settled up at year end across all Shareholders.

 

And the rules for a "more than 2% shareholder" include many things you might have treated as Business Expense, that are supposed to be Taxed through Payroll as Taxable Fringe Benefit to you.

 

You need to get that Help ASAP. Did you know the Corporate tax return is due in 3 weeks?

Super Contributor *

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

Thank you, that is what i was looking for, I just didnt have QB set up as an S corp so i need to switch it over everything I read says to start over but i already have payroll set up and its just a few equity accounts that are different not sure if i can just rename them or if i actually have to start over, yes deadline is coming up fast and im not even close to ready, I have never taken any money out of the company only what i received in payroll, I was just thinking that the 4000 i put in checking from owners equity i could change to going into checking from shareholder loan, then change the gas receipts from an expense account to my shareholder loan account lowering what the company owes me, then i turn in mileage report and the company writes a check for that amount... I hopefully will see a cpa this week

Super Contributor *

Re: What account do i enter gas receipts If I deduct mileage and not actual expenses ?

I went to a CPA and he got quickbooks straightened out for me i think for the most part anyway, when i called to set up the appointment i told him I had a mess, when i got there and he looked at my quickbooks he said it wasnt a mess at all and that very seldom are his clients books kept as well and as detailed as mine were, it took him less than an hour to fix what i had messed up and file my 1120s, so I just wanted to thank all of you especially qbteachme for all the help on multiple posts, it is because of your helping me that i had most of my books correct... he did change a couple things that I am confused about so I have a few more questions but I will start a new post for that... THANK YOU again...

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