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My wife worked as an independent contractor for a tutoring company last year. In a nutshell, she drove to the clients homes to tutor kids. We did not have a home office. Could somebody clarify for me whether or not these miles qualify as business or commuting miles when filling out the Schedule C vehicle worksheet?

Common sense tells me that these miles would be commuting miles. But, everyone she works with swears that these miles are deductible, which I think would have to make them business miles since Tax Cut is not giving me a deduction for commuting miles. Or, maybe it's related to whether or not she declares a home office?

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Commuting miles are not deductible. In general, commuting miles is mileage to work from home and from work to home. Mileage in between would be business miles. For someone with no set place of business, mileage to the first location of the day and from the last location would be commuting. However, you don't have to have an "office in the home" in order for the home to be the primary place of business. If she conducts a major part of her business out of the home (bookkeeping, marketing, scheduling, and seeing some clients) perhaps all the mileage to others could be deductible. But if no business is conducted at home, and there is no other place that could be considered the primary place of business, then it sounds like you have it right and the miles are commuting.

From IRS Pub 463 Travel, Entertainment, Gift, and Car Expenses:

"Section 4 Transportation...

No regular place of work.

If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area.

Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area.

You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. These are nondeductible commuting expenses."

and

"Example 3.

You have no regular office, and you do not have an office in your home. In this case, the location of your first business contact is considered your office. Transportation expenses between your home and this first contact are nondeductible commuting expenses. Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. Although you cannot deduct the costs of these trips, you can deduct the costs of going from one client or customer to another."

I thought that if you are a 1099 contractor (no W2) then these miles would be deductible unless they were reimbursed.

Isn't one of the key issues whether or not you have a home office?

Examples:

Self-employed web developer does a lot of work in his clearly defined home office but visits clients on occasion - those miles are deductible.

Self-employed home cleaner has no home office at all. Mileage to the first visit within the metropolitan area is not deductible, but miles to subsequent visits that day are, except for the mileage home after the last visit of the day.

Agree with Xnarg. Even contractors need a principle place of business. If you can establish a significant business presence in the home, then the miles can be deductible. But if not, you have a lot of commuting. Just because someone gets a 1099 instead of W-2 doesn't mean they don't have a commute.

It's within the realm of possibilities for tutors such as OP and his spouse to establish a principal place of business in the home. They don't necessarily have to declare a home office (in the tax sense), either.

For example, they may do significant amounts of preparation in the home. They may make appointments and perform sales calls, and be available to answer student questions in their off-hours. They may perform time and billing documentation. They may evaluate their tutees' progress and develop action plans.

Xnarg said: It's within the realm of possibilities for tutors such as OP and his spouse to establish a principal place of business in the home. They don't necessarily have to declare a home office (in the tax sense), either.

For example, they may do significant amounts of preparation in the home. They may make appointments and perform sales calls, and be available to answer student questions in their off-hours. They may perform time and billing documentation. They may evaluate their tutees' progress and develop action plans.

I'm with Xnarg. I think someone like a tutor with Schedule C and 1099 income can deduct all of their driving miles to/from clients. While there could be some grayness in the area, I think it's worth the extremely minimal risk of it being disallowed in an audit.

Driving between client sites would always be deductible, so the "grayness" is only about home->first client and last client->home which could be a very small portion of total mileage.

If income and driving is significant you should consider incorporating.

Xnarg said: It's within the realm of possibilities for tutors such as OP and his spouse to establish a principal place of business in the home. They don't necessarily have to declare a home office (in the tax sense), either.

For example, they may do significant amounts of preparation in the home. They may make appointments and perform sales calls, and be available to answer student questions in their off-hours. They may perform time and billing documentation. They may evaluate their tutees' progress and develop action plans.


She didn't do significant prep in the home. She probably made some appointments and documentation. But, she was definitely not available to answer student questions in their off-hours and definitely didn't put in a whole lot of time outside the actual tutoring hours.

lampy2k4 said: Xnarg said: It's within the realm of possibilities for tutors such as OP and his spouse to establish a principal place of business in the home. They don't necessarily have to declare a home office (in the tax sense), either.

For example, they may do significant amounts of preparation in the home. They may make appointments and perform sales calls, and be available to answer student questions in their off-hours. They may perform time and billing documentation. They may evaluate their tutees' progress and develop action plans.

I'm with Xnarg. I think someone like a tutor with Schedule C and 1099 income can deduct all of their driving miles to/from clients. While there could be some grayness in the area, I think it's worth the extremely minimal risk of it being disallowed in an audit.

Driving between client sites would always be deductible, so the "grayness" is only about home->first client and last client->home which could be a very small portion of total mileage.

If income and driving is significant you should consider incorporating.


It is definitely not a siginificant portion of our income. Total income from this job was about 6K and driving miles was about 2K. So, it's not going to break the bank either way.

Xnarg said: From IRS Pub 463 Travel, Entertainment, Gift, and Car Expenses:

"Section 4 Transportation...

No regular place of work.

If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area.

Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area.

You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. These are nondeductible commuting expenses."

and

"Example 3.

You have no regular office, and you do not have an office in your home. In this case, the location of your first business contact is considered your office. Transportation expenses between your home and this first contact are nondeductible commuting expenses. Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. Although you cannot deduct the costs of these trips, you can deduct the costs of going from one client or customer to another."


Example 3 sounds exactly like our scenario. So, I guess I'll go with deducting only the miles in-between clients. Damn it.



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