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Has anyone tried the automatic OBD mileage trackers? They plug into your car's diagnostic port and track trips automatically. My tax guy recommended one called Vehmo but i'm not sure if it's worth the $80.
I've been using one called Bouncie for about 8 months now. It's actually really good - totally automatic and you don't have to remember to do anything. It creates reports I can just hand to my accountant. The monthly subscription is like $8 but totally worth not having the stress.
I've been doing gig work for about 2 years now and went through the same mileage tracking nightmare! What finally worked for me was combining two approaches: I use a simple voice memo app to record my starting and ending odometer readings while I'm sitting in my car (takes literally 5 seconds), then I have a weekly reminder on my phone to transcribe those voice memos into a simple spreadsheet. The voice memo method is foolproof because I can do it even when my hands are full or I'm in a hurry. I just say "Starting DoorDash shift, odometer 45,230" and then "Ending shift, odometer 45,267" when I'm done. At the end of the week, I listen to all the recordings and update my spreadsheet with dates, start/end miles, and total business miles. This system has saved me from losing track of about $3,000 worth of deductions last year. The key is finding something so simple that you literally can't forget or mess it up, even when you're tired after a long shift. Apps are great but they can fail or you can forget to use them - your voice is always available!
Just to be clear, since they're your ex-spouse, they don't have to meet the "member of household" test that normally applies for qualifying relatives. That's a special exception in the tax code for ex-spouses. But you still need to provide more than half their support for the year. Make sure they don't have other income sources you're not aware of. My ex had a small online business selling crafts that I didn't know about, and it pushed them over the income limit. Created a huge headache during tax filing.
One thing I haven't seen mentioned yet is that you should also keep track of any income your ex might receive throughout the year, even if it seems minimal. This includes things like unemployment benefits, cash gifts from family members, or any occasional odd jobs they might do. The $4,950 gross income limit is pretty strict, and even small amounts can add up. Also, since you mentioned they haven't filed taxes in several years, you might want to encourage them to get caught up on any required filings before you claim them as a dependent. While it shouldn't directly affect your ability to claim them, having clean tax records for both of you will make things smoother if the IRS has any questions. For the support test calculation, don't forget to include the fair rental value of them living in your home. If your rent/mortgage is $1,500/month and they're living there for 10 months, that's $15,000 in housing support you're providing. This often makes up a large portion of the "more than half support" requirement.
Just to add some clarity about special depreciation allowance vs. Section 179 since I see some confusion in the responses. They're related but different: Section 179 allows you to immediately expense (deduct) the cost of qualifying property rather than depreciating it over several years. For 2023, the limit was $1,160,000. The special depreciation allowance (also called bonus depreciation) was 80% for 2023 and applies after Section 179 deductions. So if you bought $50,000 of qualifying equipment and took $30,000 as a Section 179 deduction, you could then apply 80% bonus depreciation to the remaining $20,000. For vehicles specifically, there are luxury auto limits that cap how much you can deduct. For passenger vehicles placed in service in 2023, the max combined Section 179 and depreciation is generally $20,200 for the first year. The key thing OP should verify is that these limits were properly applied in their tax software. The software should have done this automatically, but it's always good to double-check when claiming substantial deductions.
Could you explain how this works with the business-use percentage? If my car cost $30,000 and I use it 60% for business, am I applying the limits to the full cost or the business portion? The IRS publication makes my head spin.
You always apply the business-use percentage first, then apply the limits to that amount. So in your example: $30,000 vehicle cost Ć 60% business use = $18,000 business portion Then you apply the first-year limit (which was $20,200 for 2023) to that $18,000 business portion. Since $18,000 is less than the limit, you could potentially deduct up to the full $18,000 in the first year through a combination of Section 179 and bonus depreciation, assuming you have enough business income to support the deduction. If your business portion had exceeded the limit (say, if your car cost $50,000 with 60% business use = $30,000 business portion), then you'd be capped at the $20,200 limit for the first year. The remaining undeducted basis would then be depreciated over the remaining recovery period using regular MACRS depreciation in future years.
Has anyone addressed what happens if you claim special depreciation allowance and then in a later year your business use drops below 50%? This happened to me and it created a real tax headache. I claimed Section 179 and bonus depreciation when my business use was 70%, but two years later my business use dropped to 30%. I had to recapture some of the excess depreciation I'd taken and pay tax on it. The IRS calls this "listed property" recapture. Basically, if business use drops below 50% during the recovery period, you have to recalculate depreciation as if you had used the straight-line method from the beginning and pay tax on the difference. Just something to be aware of if you think your business use percentage might drop significantly in future years.
That's a really important point! I got burned by this exact situation. My tax software didn't warn me about it at all. Do you know if there's a form that specifically handles this recapture calculation? I'm trying to figure out how to properly report my situation now.
whatever happens to warner, i bet his sentence will be WAY lighter than what would happen to any of us!! my brother forgot to report $2000 of side gig income and the irs came after him like he was al capone lol... meanwhile this dude hides MILLIONS and will probably get house arrest in his mansion š the whole system is rigged for the rich. they make the tax laws complicated on purpose so regular people mess up and get penalized while billionaires hire fancy lawyers to find all the loopholes. just watch, he'll get some minimal sentence and be back to counting his beanie baby billions in no time.
While I understand your frustration, there's an important distinction here. Your brother's situation was likely considered tax negligence (failing to report income), while Warner's case involves willful evasion through hiding money in offshore accounts. They're different categories of tax issues with different legal frameworks.
This case really highlights how the wealthy can afford to play games with the tax system that regular people can't. Warner had the resources to set up complex offshore structures and hide millions, while most of us are just trying to figure out basic deductions without getting in trouble. What bothers me most is the emotional courtroom display. I've seen plenty of cases where average taxpayers facing penalties were scared and remorseful too, but they don't get the same sympathy from the system. The fact that he's a billionaire crying about consequences for deliberately hiding money feels pretty tone-deaf. I'm curious if this case will actually lead to any meaningful changes in how the IRS prioritizes enforcement. Seems like they spend way too much time going after small mistakes while cases like this take years to develop. The resources needed to investigate complex offshore schemes are probably why so many wealthy tax evaders get away with it for so long.
Omar Zaki
I successfully resolved this exact issue last month! I created an online account at IRS.gov which gave me access to my tax records and allowed me to update my address electronically. The change was reflected in their system within 3 business days according to the agent I spoke with later. You'll need to verify your identity through ID.me first, which requires a government ID and facial recognition. The whole process took about 20 minutes and I've been receiving all IRS correspondence correctly since then. Much faster than waiting for paper forms to process!
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Fatima Al-Rashid
I went through this nightmare last year! What worked for me was doing BOTH Form 8822 AND calling the IRS directly to update it over the phone. The form takes forever to process, but the phone update was immediate. I also recommend requesting a "centralized authorization file" (CAF) number if you work with a tax professional - it helps ensure all your correspondence goes to the right place. One thing nobody mentions is that different IRS departments sometimes have different addresses on file for you, so you might need to update it in multiple places. Also, keep detailed records of when you submitted everything because if you get penalized for missed notices, you'll need proof that you properly notified them of your address change. The IRS has a "reasonable cause" provision for penalties if you can show you never received the notices due to their error.
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