Professional services
From OAB to AICPA, from livro caixa to Schedule C — billing by the hour means billing by the mile.
Professional services — law, accounting, consulting, photography, journalism, sworn interpretation, claims adjusting — share a pattern rarely discussed: the professional bills by the hour or by the project, but travel time costs as much as desk time. For self-employed lawyers, accountants and consultants, mileage enters as either a billable line item OR a cost absorbed into the fee. The two structures have distinct tax treatment.
This category groups professionals whose income varies significantly month-to-month, with strong seasonality (audit, year-end close, court calendars). Rigorous mileage logs defend ethics representation before OAB/CRC/AICPA and maximize IRPF/Schedule C deductions.
In Brazil, OAB-registered self-employed lawyers and CRC accountants report mileage on the Livro Caixa do Profissional Autônomo, annexed to IRPF. Mileage reimbursed by the client is income; the corresponding cost is deductible — net effect near zero, but standardized-receipt documentation defends representation under audit. When mileage is built into the fee, the full cost is deducted on the livro caixa.
In the US, lawyers and CPAs operating as sole proprietors (Schedule C) or single-member LLCs use the standard method; LLP partners receive K-1 and deduct miles as unreimbursed partner expense when the partnership agreement allows. 1099 consultants and freelance photographers use Schedule C line 9. Federal court interpreters can have mixed treatment: some receive reimbursement from AOUSC, others deduct.
In Mexico, lawyers/accountants under RESICO simplify; under Régimen General de Personas Físicas, they deduct fuel via CFDI.
Two structures dominate professional services: (1) Client reimburses directly, billed as a line item — taxable income offset by deductible expense; (2) Built into the fee, full cost absorbed into project price and deducted on livro caixa / Schedule C. The choice depends on the client type: large companies prefer line items for internal tracking; individual clients prefer flat fees. In both cases, standardized-receipt documentation is the critical piece.
Common mistakes in professional services:
Professionals who document mileage as an auditable event recover up to 12% of annual income via deduction or billable revenue.