Mileage Deduction for 1099 Contactor

[ETax847]

Client is a banker by day (w2) and a referee on weekends (1099). Can said client deduct his mileage incurred for trips to and from games?

[Margaret CPA in OH]

Why not if his 'place of business' for record keeping, scheduling, etc. is his home?

[Janitor Bob]

sounds like a valid Sch C expense.

[Mr. Pencil]

Can said client deduct his mileage incurred for trips to and from games?

No. He would have to claim a qualified home office used exclusively and regularly for the part-time job of reffing, and that seems an unlikely scenario. Maybe he could deduct mileage to games in another city or going to additional job sites. That's all.

[jshtax]

No. He would have to claim a qualified home office used exclusively and regularly for the part-time job of reffing, and that seems an unlikely scenario. Maybe he could deduct mileage to games in another city or going to additional job sites. That's all.

I disagree any time he gets in the car for referee related activities is a business deduction. If your position is that the field is the place of business then even out of town would not be a deduction but only a commute.

[Richcpaman]

His qualified "Home Office" can consist of the closet he keeps his "reffing" gear in.

I would give him mileage from house to fields each time.

If his house however, was in the boonies, and bank was in town, and the fields were close by, I may limit somewhat....

Otherwise, I would give him back and forth on each ref outing.

Rich

[Janitor Bob]

Why Office in home? Just list the vehicle as an asset and use standard mileage to get expense for the Sch C Reffing

[BulldogTom]

I am with Mr. Pencil on this, mostly. If the taxpayer does not have an office in the home, he cannot deduct the mileage. However, if he has an office in the home, used regularly and exclusively for the ref activity, then he could be eligible for mileage from his office to the customer job site and then back to his office.

He could, if this is how it played out, actually deduct some of the mileage without an office in the home if he is going from his first job (the bank) to his second job (the ref activity). In that case, he would not get his first leg of the trip (home to bank) or the last leg of the trip (ref activity to home) as those would be commuting miles.

But without an office in the home, his mileage from home to ref activity and back home is not deductible on the sch. C. It is commuting mileage. He is a "turtle" in the eyes of the code. There is a tax court case on this that I read a long time ago for a logger who never worked in the same place for more that a few days at a time. He did not have a regular tax home, so the court said that where ever he was working, that was his tax home, and therefore he could not deduct mileage.

Tom

Hollister, CA

[Mr. Pencil]

Why Office in home?

Because that's what the law says. Start with Revenue Ruling 99-7, which has been around a good long time. And he has to keep a written record of the business purpose of each trip, but going from home to the worksite is personal commute.

[Mr. Pencil]

His qualified "Home Office" can consist of the closet he keeps his "reffing" gear in.

No, that is not correct. Never has been. Review the requirements in Pub 587, and cite anything you find to support your opinion that his qualified home office can consist of the closet he keeps his reffing gear in.

[Janitor Bob]

I still disagree. IMO, vehicle mileage to and from games is a reasonable and necessary expense for the business of reffing and should be treated as such and entered directly on schedule C...regardless of wether or not they have office in home.

[ETax847]

This reminds of an article I read where 10 tax preparers were given the exact same client information as part of a study and 9 out of the 10 produced a different outcome for the client as part of this study.

[RitaB]

I still disagree. IMO, vehicle mileage to and from games is a reasonable and necessary expense for the business of reffing and should be treated as such and entered directly on schedule C...regardless of wether or not they have office in home.

It's reasonable and necessary for me to drive from home to my office in town everyday, but I can't deduct the expense. Which is really unfortunate, but still not deductible.

[Janitor Bob]

No one is suggesting he deduct commuting miles. I stand by my opinion....direct Sch C expense.

[DANRVAN]

But without an office in the home, his mileage from home to ref activity and back home is not deductible on the sch. C. It is commuting mileage. He is a "turtle" in the eyes of the code. There is a tax court case on this that I read a long time ago for a logger who never worked in the same place for more that a few days at a time. He did not have a regular tax home, so the court said that where ever he was working, that was his tax home, and therefore he could not deduct mileage.

Tom

Hollister, CA

You might be thinking of the Charles Walker case. I actually had a logger client with the same name, he went by Chuck. That case really hit home with him, or served as the club to hit him over the head with.

I agree it is comuting and the fact he stores his uniform and a whistle in his closet makes no difference.

[Mr. Pencil]

No one is suggesting he deduct commuting miles. I stand by my opinion....direct Sch C expense.

Please explain your definition of commuting miles. Pub 463 says, "Transportation expenses you have in going between home and a part-time job on a day off from your main job are commuting expenses. You cannot deduct them."

[Janitor Bob]

I always considered commuting to be miles driven to and from your home and a place of employment. However, this client is not an employee and thus, the fields were is refs are not places of employment. the mileage is a reasonable expense that is neccessary for him to be able to perform the service.

[kcjenkins]

Sorry, JB, but that IS commuting, just like a construction worker who goes to different worksites. It's only deductible if he has a game "outside of his normal work area", like an out of town playoff or such. It goes back to the 'tax home' rule.

[Mr. Pencil]

this client is not an employee

On page 2 Pub 463 says, "read this publication if you are an employee or a sole proprietor." Or just look at Schedule C, exactly where you think mileage should go. The Instructions clearly say, "commuting is travel between your home and a work location."

[mcb39]

I agree that is is commuting. I have a client who is on the board of a Credit Union and has to attend meetings. He is not allowed to deduct the mileage, but he does get a 1099 for SE. He has another small business which is right at his homestead; berry farming. This home business does not qualify him to take mileage when he attends meetings as a Director because there is no connection between the two.

[BulldogTom]

I always considered commuting to be miles driven to and from your home and a place of employment. However, this client is not an employee and thus, the fields were is refs are not places of employment. the mileage is a reasonable expense that is neccessary for him to be able to perform the service.

JB, I like you a lot, so don't take this as a slam or a knock at your abilities. You are dead wrong. Schedule C is for self EMPLOYED persons. They employ themselves. And it is commuting if he does not have an office in the home.

This is why we have to document the OIH "regular and exclusive use" so closely for our clients, because the thing the auditor is normally trying to get rid of is the mileage, not the little bit of mortgage interest, depreciation and utilities that the SE taxpayer is getting on his office. It is the mileage that is the big ticket on that form. Establishing an office in the home opens up the mileage deduction.

Tom

Hollister, CA

[Janitor Bob]

How about that? Although I have never actually dealt with this situation, I was just SURE that such mileage would be a deductible expense. Now I see that it is not. I am now smarter and can provide yet one more example of how this board has made me so. I have referee clients but never any that had mileage....Now if they do, I will know how to handle it!

[RitaB]

JB, I like you a lot, so don't take this as a slam or a knock at your abilities. You are dead wrong. Schedule C is for self EMPLOYED persons. They employ themselves. And it is commuting if he does not have an office in the home.

This is why we have to document the OIH "regular and exclusive use" so closely for our clients, because the thing the auditor is normally trying to get rid of is the mileage, not the little bit of mortgage interest, depreciation and utilities that the SE taxpayer is getting on his office. It is the mileage that is the big ticket on that form. Establishing an office in the home opens up the mileage deduction.

Tom

Hollister, CA

How about that? Although I have never actually dealt with this situation, I was just SURE that such mileage would be a deductible expense. Now I see that it is not. I am now smarter and can provide yet one more example of how this board has made me so. I have referee clients but never any that had mileage....Now if they do, I will know how to handle it!

That was beautiful.

[kcjenkins]

We should never stop learning. Of course, in our business, you can't, since they keep changing the rules.

[RitaB]

And, it's great when the education is facilitated by people not trying to one-up anybody. Go team!