10 How did the IRS know you were only using it 30% for business? Did they just look at your mileage log, or did they have other ways of figuring it out?

22 The IRS asked for my mileage log during the audit, and I had only kept sporadic records. They compared the total miles on the vehicle to the business miles I could document, and it came out to around 30%. They also looked at my appointment calendar and client locations to verify whether my claimed business trips were legitimate. The auditor explained that without a contemporaneous mileage log (meaning one kept at the time of travel, not created later), they default to assuming more personal use. The burden of proof is entirely on you as the taxpayer to demonstrate business usage. Without proper documentation, you'll lose the deduction every time.

2 Bonus depreciation is different from Section 179 in a few key ways. For 2024, bonus depreciation is at 60% (down from 80% in 2023), and will drop to 40% in 2025. Unlike Section 179, bonus depreciation CAN create a loss for your business, which might be beneficial depending on your situation. For vehicles above 6,000 lbs, you could potentially get a larger first-year deduction using a combination of Section 179 (up to $27,000) and bonus depreciation on the remaining basis. For vehicles under 6,000 lbs, the luxury auto limits still apply even with bonus depreciation.

Would driving for Uber on weekends count as side work? I started doing that to make extra cash. Do I need to keep track of my mileage and car expenses?

Yes, driving for Uber definitely counts as self-employment/side work! You'll receive a 1099 form from Uber (most likely a 1099-K) reporting your earnings. You'll report this income on Schedule C, and this is where you CAN deduct expenses. For driving, you have two options for deducting vehicle expenses: the standard mileage rate (which will be around 67 cents per mile for 2025) OR actual expenses (gas, maintenance, depreciation, etc.). Most Uber drivers find the standard mileage rate easier and often more beneficial. Just make sure you keep a detailed log of your business miles!

You would only want to itemize deductions if your total eligible itemized deductions exceed the standard deduction amount. For 2025, that's $14,350 for single filers and $28,700 for married filing jointly as you mentioned. Common itemized deductions include mortgage interest, state and local taxes (limited to $10,000), charitable contributions, and certain medical expenses that exceed 7.5% of your adjusted gross income. If adding all these up gives you more than the standard deduction, then itemizing makes sense. Otherwise, take the standard deduction.

Thanks for explaining! Our mortgage interest is only about $8,000, state taxes maybe $6,000, and we donate like $2,000 to charity. So we're at $16,000 total which is way less than the $28,700 standard deduction. Standard deduction it is!

Some people can't open regular bank accounts due to ChexSystems records or past banking issues. Also, many online banks still require an initial deposit from an existing bank account, creating a catch-22. Not everything that seems obvious is actually accessible to everyone.

My cousin works for the IRS (not speaking officially of course) and says they generally don't have the resources to go after small personal transfers unless there's a clear pattern of business activity. They're looking for people running side hustles and not reporting the income, not people splitting bills or helping family members. Document everything just in case, but don't lose sleep over it.

Is there a statute of limitations on back taxes? Like, if they haven't contacted me about unfiled taxes from 10 years ago, am I in the clear?

There's no statute of limitations for unfiled tax returns - the IRS can come after you at any time for returns that were never filed. However, once you do file, the general statute of limitations is 3 years for the IRS to audit or assess additional taxes (this extends to 6 years if you underreported your income by more than 25%). For refunds, you only have 3 years from the original due date to claim them. After that time passes, you lose the refund forever, even if you were owed money. That's why it's important to file, even years later - at minimum to start the statute of limitations clock and potentially claim refunds that aren't yet time-barred.

I used H&R Block for 4 years of back taxes and it was SO expensive - like $350 per year! In retrospect I should've just used software. Especially since they made a mistake on one of my returns that I had to fix anyway. Just make sure whatever you use has the right forms for your situation.

Exactly! My friend who runs a restaurant got convinced by one of these "specialists" to claim ERC based on dining capacity restrictions, which was legitimate. But then they pushed him to claim additional quarters when only OSHA guidance was in effect. Now he's worried about what will happen and the ERC company is nowhere to be found. They already took their 20% fee!