Your expenses are more than your gas, though. It sounds like you did alright regardless, but multiply your mileage by the mileage rate (I think its around 58.5 cents per mile now) and deduct that from your gross revenue for the easiest way to figure your “profit.” Then you are going to pay basically the employee and employer halves of FICA (you get a small deduction so it’s not the full 15.3% but close), in addition to any applicable income taxes. Your car takes no wear and tear while you are sitting at the preschool. For some people (and cars) the mileage rate more than covers your real wear and tear, and others it doesn’t. So your true earnings are probably somewhere between the revenue-gas and revenue-mileage figures, though you’ll only be taxed on the lower.
I am aware of the “wear & tear on the car factor.”
Here’s the thing: the car I am using is a 2002 Audi, in remarkably good shape, which only just turned over 100,000 mi, and which I just put some money into routine repairs on (on the way home from getting it worked on, I heard on the radio my first report on a “novel corona virus in China”), including the timing belt, because I decided I was keeping the or the foreseeable future.
This is a car I paid $800 for about 6 years ago. I bought it from a student who was desperate to sell it because he was leaving the country THE NEXT DAY, had been trying to sell it for months; he actually wanted like $2000, but $800 was what I had cash in hand.
He hadn’t been able to sell it because it was a manual, and he couldn’t find anyone who wanted to buy a manual (which I actually prefer, but I didn’t let on). He was looking at taking my $800, or just abandoning it. He took my $800. He had been trying to sell it on campus, and no one under 25 drives a manual, except people who want to drive sports/muscle cars, or vintage cars. He was from Germany, and didn’t get this.
So wear-&-tear is a bit of a freebie for me.
I am keeping all my gas receipts, in case for some reason I don’t take the standard deductible next year-- I’ve always taken it, except way back when I was a freelance interpreter, and I was deducting percentages of car payments, and percentages of rent (home-office) as business expenses, plus having private health and disability insurance.
Anyway, the gas is the only thing I have to pay for NOW (like I said, it happens the car was just worked on, so has new brakes, new tires, new spark plugs, a few little things like temp sending unit, and had pressure tests on the radiator, cylinders, etc. exhaust system inspected for rust (guy said it looks like it was replaced once maybe two years before I bought the car). The only thing to worry about is the clutch, and it is operating like a champ.
EVERYTHING works on this car, it’s worth noting: AC works, seatwarmers work. Automatic skylight works; has a CD & tape player, and they both work. Bought a cassette-bluetooth adapter for ~$20, and it works (I was amazed); cruise control works; parking brakes work. Has two tiny rust spots about the size of a quarter that are visible on the body, and inspection revealed no spots of concern on the chassis or underbody. It’s in better shape than cars half as old that I have driven. Also, starts EVERY time.
Usually, I am a planner, but we live in strange times. So now, the taxes are the problem of April, 2021. By then, I will either be back at work, or the world will be so changed, that all bets are off.
Not a big fan of AA, but “One day at a time” is fairly resonant now.
Just FYI, when you are self-employed, you can deduct business expenses (like gas) IN ADDITION to taking the standard deduction. You take your business deductions on Schedule C and forward the net amount to your Form 1040. Then you subtract either your standard deduction or your itemized personal deductions. There is no “standard deduction” for business expenses.
n/m. duplicate.
Inspiring! Keep it up!
This is true but for automotive it is either actual car expenses OR the mileage, as I’ve mentioned. For most people the mileage works out better and is just easier to use since it’s easy to track (apps do it for you now) and you just multiply by the rate for the tax year.
Not talking about OP, but I amazed by the number of self-employed I encounter who think they will owe no taxes if their 1099 revenue is below the standard deduction. Unless you have something else covering all your FICA, like a job that pays very well and maxes it out or refundable tax credits that more than cover it, you will pay SE taxes on every dollar of profit before even getting into income taxes.
I guess a bag from Taco Bell is not as likely to sue you as a human passenger!
Since your car is fairly old, you probably couldn’t drive humans anyway - I think they have a maximum age allowed on the cars and I think it’s 10 years old.
I had actually just given notice at my job a few weeks ago to finally get some rest and recover from the concussion I had back in September. I had been limping along, had to get a letter from my neurologist in order not to be required to work nights and weekends, and still felt dizzy and out of it by the end of the day.
The original plan was to go on vacation for a week, then come back, get some actual brain rest, do some cognitive therapy for brain rehab, do a few things around the house, and then look for a job once I felt better. The neurologist was on board with this plan and agreed that given how insane and cognitively demanding my job was (it’s hard to let your brain rest and avoid screen time when your job involves cross-referencing and synthesizing detailed information on two computer monitors and a stack of documents under extreme time pressure, while multitasking with whatever is coming in via email, etc.), I was unlikely to recover fully in anything approaching a reasonable amount of time. (It had been 6 months and I was still having dizzy spells, etc., and having to take a nap when I got home before I was functional enough to eat dinner, then crashing on the couch after dinner by 8:30 p.m.)
So now that I have had a couple of weeks off, I feel a bit better. (Haven’t tried spending 8 hours on a computer doing anything intellectually demanding yet, though.)
However, I am thinking the market for employment-based immigration paralegals is not likely to be fabulous in the near future. We have cash to last us a while (we had been saving up to build out the attic), but now I am wondering whether I will need to do something else in the short- to medium-term, and if so, what that might be. Maybe a labor and employment law practice would be interested in me? Sigh.
My brother was going to get me a job at the local grocery store chain that he works for. They were asking warehouse workers to do stocking, but their warehouse workers are too slammed to take on extra shifts stocking.
I don’t need the job - I work from home and so far am able to get paid. But I’m going to have more free time at night, and have done stocking before and loved it, and I wanted to use it as a way to get exercise.
But, as schools and restaurants started closing I decided against throwing my hat in the ring, as hopefully people who need the money will take the grocery jobs. If not, I’m still willing to do it, I just don’t want to take someone else’s needed opportunity.