# How is the SMR applied to taxes??



## DJMasters (Mar 17, 2018)

I searched, didn't find what I was looking for.... I just started driving in 2018 and haven't been thru the tax thing yet....

How are the SMR and other deductions/credits applied in the tax process? Is it deducted from the gross income to reduce the taxable income? Or applied directly to a refund (if you get one)? For example, in the second scenario your refund amount is $1000 and your allowable vehicle expenses are $1000 do you get a $2000 refund check?


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## Older Chauffeur (Oct 16, 2014)

DJMasters said:


> I searched, didn't find what I was looking for.... I just started driving in 2018 and haven't been thru the tax thing yet....
> 
> How are the SMR and other deductions/credits applied in the tax process? Is it deducted from the gross income to reduce the taxable income? Or applied directly to a refund (if you get one)? For example, in the second scenario your refund amount is $1000 and your allowable vehicle expenses are $1000 do you get a $2000 refund check?


As an independent contractor you file a Schedule C, (profit or loss from business). The mileage from business use of your vehicle (SRM) is deducted along with other operating expenses from your income, thereby lowering the profit on which you'll pay tax. FYI, you will also owe SE tax of 15.3% on the profit if it's over $400. That's for Social Security and Medicare, like you and your employer pay together on a regular job. Be sure to keep a log of your mileage to support the deduction.
Disclosure: I'm not a tax professional.


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## DJMasters (Mar 17, 2018)

Ahhhh, got it! Thanks OC!


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