Accounting for Sole Proprietors: Tax & Bookkeeping Tips

Hi there! Quick question regarding small business accounting—is it possible for a sole proprietor to opt out of claiming depreciation expenses for the previous fiscal year if they want to minimize their reported operating loss? I know the depreciation has already been calculated, but I was wondering if we could just record it outside of our primary KPIs instead.

Looking for some guidance here.

Back in 2021, the owner provided a loan to the business.
Since this isn't recorded in the P&L, where does it actually go on the PPI form?

Should an owner's loan be listed under Section V (the supplement for business receipts and expenditures) in 2.4—received loan amounts—or under 2.6—other miscellaneous receipts?

thanks.

It’s basically just the gap between what’s actually hitting the bank account and those loans.

I need a car for my small business—just a regular sedan, nothing crazy like a van—but I’m stuck on the logistics. Should I register it under my LLC or just keep it in my own name?
It’d be ideal to buy it through the business so I can take advantage of that 12.5% sales tax credit and write off the expenses. Honestly, I could really use the tax break right now.
The catch is, I want to use it for personal stuff too.
I always hear about people at big corporations getting company cars they can drive 24/7. It’s clearly not just for business trips if they're using it for everything, yet the car stays on the company books.
So, how do I pull this off? How can I buy a car through my company and use it for both work and life without having to deal with the headache of logging every single mile or filling out endless mileage logs?

Basically, a deductible expense is only one that’s actually necessary for doing business. You need a travel voucher to justify any reimbursements, and those payouts have to be logged via a JOPPD form when you file with the IRS.
Is it really that hard to fill out a travel voucher and make sure everything's accounted for?

Emily Myers8 said:Basically, a deductible expense is only one that’s actually necessary for doing business. You need a travel voucher to justify any reimbursements, and those payouts have to be logged via a JOPPD form when you file with the IRS.
Is it really that hard to fill out a travel voucher and make sure everything's accounted for?

Alright, so I get it—fuel and tolls are deductible when you're using the car for business trips or client meetings. That part is easy.
But what about when employees use those cars for personal stuff?
Like I said before, I don't see how employees who get company cars for 24-hour shifts manage this. They probably only use them for work part of the day. There's no way they're filling out a formal travel log for every single grocery run or weekend trip, right?

Is there any way to just scrap the whole travel voucher headache and instead just claim 50% of the fuel, registration, and depreciation costs?

My main goal is just to buy the vehicle under the company name so it counts as a business expense and I can write off at least half the sales tax. But I want the freedom to use it personally without some auditor breathing down my neck or claiming I'm misusing company property if the car is registered to the business.

neonsurfer13 said:Alright, so I get it—fuel and tolls are deductible when you're using the car for business trips or client meetings. That part is easy.
But what about when employees use those cars for personal stuff?
Like I said before, I don't see how employees who get company cars for 24-hour shifts manage this. They probably only use them for work part of the day. There's no way they're filling out a formal travel log for every single grocery run or weekend trip, right?

Is there any way to just scrap the whole travel voucher headache and instead just claim 50% of the fuel, registration, and depreciation costs?

My main goal is just to buy the vehicle under the company name so it counts as a business expense and I can write off at least half the sales tax. But I want the freedom to use it personally without some auditor breathing down my neck or claiming I'm misusing company property if the car is registered to the business.

If there’s no mileage log or paperwork to back up those trips, the vehicle can be pulled from the road and the owner could face some serious trouble.
Check out this link from the IRS for more info: https://www.irs.gov/newsroom/publication-details

Quincy:

Is there any way to just skip the whole mileage log thing and just claim 50% of the gas, registration, and depreciation instead?

Nope.

Quincy:

My main goal is just buying the car through the company so it counts as an expense and I can write off at least half the sales tax, but still being able to use it personally without... worrying someone will call me out on the street for using a company vehicle for personal errands if it's registered to the business.

You basically answered your own question—the kind of loophole you're looking for doesn't exist anymore.

Emily Myers8 said:If there’s no mileage log or paperwork to back up those trips, the vehicle can be pulled from the road and the owner could face some serious trouble.
Check out this link from the IRS for more info: https://www.irs.gov/newsroom/publication-details

Quincy:

Is there any way to just skip the whole mileage log thing and just claim 50% of the gas, registration, and depreciation instead?

Nope.

Quincy:

My main goal is just buying the car through the company so it counts as an expense and I can write off at least half the sales tax, but still being able to use it personally without... worrying someone will call me out on the street for using a company vehicle for personal errands if it's registered to the business.

You basically answered your own question—the kind of loophole you're looking for doesn't exist anymore.

Fine, but then explain how people actually do it. I know guys who take a company car and use it for whatever they want, 24/7, even though it's registered to the business. There's zero paperwork. A guy I know told me he gets about $167 a month from his employer for gas, and if he goes over that, he just pays out of pocket. No logs, no nothing. He drives that company rig wherever he damn well pleases.

They obviously never had any control; people just love bragging about their own stupidity. Unfortunately, here in the States, everything is strictly regulated—if you don't follow the law, you pay the price.
The link I attached should have the answer you're looking for.

Emily Myers8 said:They obviously never had any control; people just love bragging about their own stupidity. Unfortunately, here in the States, everything is strictly regulated—if you don't follow the law, you pay the price.
The link I attached should have the answer you're looking for.

I don't see anything in that link saying it's banned.

It’s not actually banned; there are just specific rules on how you can go about it.
The question was...
Quincy:

Is there any way to just scrap the mileage log entirely and just stick to claiming 50% of fuel, registration, and depreciation? All I really care about is putting the car under the business name so I can write off at least half the sales tax. As long as I don't have to worry about some cop pulling me over and giving me grief for using a company vehicle for personal errands, I'm good.

So, I called up a buddy of mine yesterday who works for this massive corporation—we're talking hundreds of employees, huge scale stuff.
He’s one of those guys who gets a company car available to him 24/7.
The vehicle is registered to the firm, so he uses it for work, obviously, but he also uses it for pretty much everything else in his personal life.
He says there isn't even any paperwork involved. He can use the car for whatever he wants, even driving it out of state, and anyone in his family can take the wheel too.
Apparently, they have other employees who use cars daily and actually have to file travel logs and expense reports, but he basically has unlimited access without the headache.
The company gives him a small monthly stipend—just a few hundred bucks to cover some basic costs—and he covers the rest of the expenses himself.

Anyway, that's the situation. Now I'm wondering how I can pull the same stunt and use my company's car for personal use, just like he does.

That only works if the company is strictly a rental agency. If we're talking about a vehicle listed as a long-term asset, only employees can drive it—and unless they’re an authorized staffer or the actual owner, they aren't allowed behind the wheel.
I'm not even debating whether that scenario is possible; just give it a shot and you'll see I'm right.

Alright, thanks. Honestly, this whole thing feels way too complicated. I feel like I’ve only managed to learn about 1% more than I knew before I started reading this.

As a small business owner, I’ve just been using my family car this whole time, and I haven't claimed a single cent of those expenses.
That’s why I’m trying to figure out the smartest way to actually start deducting some of these costs, but instead, I’m just more lost than when I started.

If you're using your own car for work stuff, just make sure you file those mileage logs. When you turn in your expense reports at the end of the month, you can get reimbursed for using your personal vehicle for business.

Emily Myers8 said:If you're using your own car for work stuff, just make sure you file those mileage logs. When you turn in your expense reports at the end of the month, you can get reimbursed for using your personal vehicle for business.

I’m telling you, it’s incredibly confusing because one person tells me one thing, and someone else tells me the exact opposite.
One accountant told me it was totally fine to use my personal car and just write off 50% of the gas and 100% of the registration and insurance.
Then I reached out to AECOM for clarification, and they told me there's no way to claim vehicle expenses unless the car is listed as a long-term asset—which basically means the car has to be owned by the company, not me personally.
The accountant swears up and down that AECOM is wrong... so now I'm stuck in the middle.

All I want is to make sure I don't screw this up and end up getting hit with a massive fine from the IRS.

neonsurfer13 said:I’m telling you, it’s incredibly confusing because one person tells me one thing, and someone else tells me the exact opposite.
One accountant told me it was totally fine to use my personal car and just write off 50% of the gas and 100% of the registration and insurance.
Then I reached out to AECOM for clarification, and they told me there's no way to claim vehicle expenses unless the car is listed as a long-term asset—which basically means the car has to be owned by the company, not me personally.
The accountant swears up and down that AECOM is wrong... so now I'm stuck in the middle.

All I want is to make sure I don't screw this up and end up getting hit with a massive fine from the IRS.

My accountant is preaching the exact same gospel. People use these loopholes constantly without even realizing they're breaking federal law. And then, when the audit finally hits? They get absolutely wrecked by the penalties.

neonsurfer13 said:I’m telling you, it’s incredibly confusing because one person tells me one thing, and someone else tells me the exact opposite.
One accountant told me it was totally fine to use my personal car and just write off 50% of the gas and 100% of the registration and insurance.
Then I reached out to AECOM for clarification, and they told me there's no way to claim vehicle expenses unless the car is listed as a long-term asset—which basically means the car has to be owned by the company, not me personally.
The accountant swears up and down that AECOM is wrong... so now I'm stuck in the middle.

All I want is to make sure I don't screw this up and end up getting hit with a massive fine from the IRS.

Just ask your contact at the IRS; you'll probably get the same answer AECOM gave you.

I stumbled upon some recent articles on this topic. Honestly, I ended up getting a bit lost in all the fine print, but figured I’d drop them here in case anyone else wants to dive into the weeds.

https://www.irs.gov/newsroom/business-expenses-and-deductions

https://www.forbes.com/sites/tax-tips-and-tricks/using-company-assets-for-personal-use

At the end of the day, it really just comes down to the math—figuring out which of these scenarios actually makes sense for your specific situation.

Hi everyone, please excuse my stepping away from the main topic for a moment. If you could spare just a few minutes (maybe seven, tops) to help me out, I’m conducting a survey aimed at decision-makers within micro and small businesses—think local LLCs or small family-run shops—for some ongoing research. I would be incredibly grateful if you could take a moment to fill this out. Again, apologies for the slight detour from our usual discussion.

Survey link here:

https://forms.gle/nmguQuazAcMbJrSNA

Thanks so much in advance for your time.