Ask Tax Dad: Employer Gas Cards, Student Loan Interest, And Escape From New York

The wisdom of Tax Dad

The wisdom of Tax Dad

Usually, our staff Certified Tax Cat handles questions about taxes, but he’s recovering from carpal tunnel paw surgery. Filling in for him is Laura’s dad, a retired accountant and real live independent tax preparer. Exclusively on Consumerist this spring, Tax Dad answers your questions.

David writes:

I have a job where I’m on the road a lot in my car. My employer gives me a gas card but pays nothing to the upkeep of the car. Can I write off mileage or maintenance?

David: if your job requires you to use your own car, you are entitled to deduct expenses for your travel, provided you are considered self-employed (does your employer pay you on a W-2 or a 1099?) or you are able to itemize your tax deductions. You must keep a log of your miles traveled for business, personal use, and commuting, and records of what you pay for gas, oil, repairs, tolls, insurance, tires, etc.

You also need to calculate depreciation on your vehicle, based on purchase price. Your deduction would be the greater of your actual business miles times the IRS allowed rate, currently 55.5 cents per mile, or the business portion of your actual expenses and depreciation amount. Either way you must deduct your employer’s reimbursed amount from your expense. Only you can decide if your deduction would be worth the extra bookkeeping.

Dear Tax Dad -

In 2012 I consolidated some student loans because I hated hated hated one of the servicing companies (plus there was a small reduction in the interest rate.) When I received the 1098e bad servicer it showed WAY more interest than I actually paid (almost $4000, when the total payments made to them for 2012 was less than $600).

I assume it has something to do with the consolidation. Can I claim everything that the 1098e shows I paid?

Thanks, Lana

Lana: You COULD use the 1099 to justify a $4000 deduction, but IRS would probably question it…eventually. With electronic filing and their computerized system, their reaction time is often amazing. I would advise that you contact your servicing company and ask that they send you a corrected 1099.

If they still tell you that it is correct, ask for an itemized statement of your interest payments for your records. Maybe you DID pay that much interest?

Rob writes:

Recently I found out that my fiancee hadn’t filed her taxes in a few years so I spent some time doing some catch up for her. While doing so, I found out that NY state had collected some taxes from her while she didn’t live there, about 2 years and four months’ worth on back taxes and a few months worth for last year. Do you know about how we would go about collecting this money back?

Rob: while you are catching up on her back tax returns, you will need to file a New York Resident or Part-Year Resident (that depends) showing taxable income earned in NY and total income for that year. If she files in another state for that year also, her income and tax would be allocated between states, depending on how much was earned in which state. She should have some, most, or all of the NY tax refunded.

Please remember that you get the advice that you pay for. Information provided by Tax Dad is a starting point, and not intended as a substitute for consulting your own real, live tax preparer or cat.

Have a question for Tax Dad about your federal or state tax returns? Send it to us at tips@consumerist.com with “ASK TAX DAD” in the subject line.

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Ask Tax Dad: Should I Hire A Tax Preparer? What If I Win The Lottery?
Tax Dad Sez: Send Us Your Questions For Consumerist’s Designated Tax Preparer