My DH is now self-employed and I am so confused with all the tax stuff. He gets $20 a day per diem through the company. Now the crew that he is on for contracting is my uncle (superintendent), my DH and my cousin. They work out of state all week and are home on weekends. My question is this. My uncle is renting a car weekly to travel to and from the work sites. It is in his name, however we are taking money out of DH's check and giving money to my uncle as an expense of renting a car. Can we claim that on our taxes? And how do we prove that we gave him that money for the rental car? Also how will mileage work since they are splitting the rental by three. Do we split the mileage by three also in regards to claiming that on our taxes? And how do we prove mileage? Can we just keep a written log? I have been doing that with mileage from mapquest. Is that sufficient or what do we need for that? And last question, since he gets a per diem in his check weekly, how does that work on our taxes? Thanks for the help. Hopefully this didn't confuse anyone either.

Keri

Keri:

You CANNOT claim the mileage because you do NOT own the car, but you should be able to claim one-third of the rental costs. Keep a written log and have your uncle annotate that the log is accurate.

The per diem is counted as income on the Schedule C along with the contract pay.

Ok so the times that they used our truck which has been a few before it broke down, we can claim the mileage? One trip alone was over 2200 miles. We can claim 100% of that right? How do we prove that? Just with a written log?

Yes, you CAN claim the mileage on the truck. All you need is the log.