Yet Another Mileage Deduction Question

[dtownjbrown6262]

What is the name of your state (only U.S. law)? OHIO

I did a search before posting this question but didnt see my "particular" scenario. It seems that most of the previous posters were 100% independent contractors or operated a "legitimate" home office, neither of which applies to me. So, here goes (deep breath)......

I currently have a full-time job but I'm expecting a baby and will be taking Maternity Leave in July. Ive been looking at alternate means of income since my employer's short-term disability benefit "sucks" (60% of salary for only 5 week). Anyway, I decided to give Mystery Shopping a try to see if it will develop into a lucrative part-time gig for me after I have the baby (I plan on taking full advantage of the 12week FMLA offered in my state). Well, Ive only been "shopping" for a week and Im already confused on mileage. Ive been trying to schedule at least one assignment each day (usually before or after work). My "regular" job is only about 8 miles from my house. Recording the mileage from my very first assignment was really simple because it was right on my way to work. However....the most recent have not been so easy. Ive been doing back-to-back assignments, running errands in between and "squeezing" them in on my lunch break. I bought a mileage log yesterday so keeping track should be easier but Im still not sure what "counts" and what doesnt. For instance, here's a snapshot from today's log:

Trip1 - origin (home), destination (bank for personal reasons), mileage (3)
Trip2 - origin (bank), destination (bank#2 for mystery shop), mileage (2)
Trip3 - origin (bank#2), destination (mall for mystery shop), mileage (5)
Trip4 - origin (mall), destination (regular job), mileage (11)
Trip5 - origin (regular job), destination (home), mileage (8)​

Now, based on the transportation chart in Publication 463, I know I can not count Trip5 because it's considered a commute. I also know that I can count Trip4, because its from a temp job to my regular job. But what about Trip3 (from one temp job to another temp job, NOT to my regular job) or Trip 2 (from non-home/non-job location to temp job)? And just to make matters even more confusing, what about this scenario - what if I do a "shop" on the weekend when Im off work from my regular job (or during my maternity leave, for that matter)? Can all of the trips be counted, even the ones to AND from my house.....
or should none of them be counted?

WHEW......any takers on this one would be greatly appreciated. Thanks

 

[FlyingRon]

Just what is the nature of the "mystery shopper" gig? Most of them are scams. How are you getting paid? If you're getting 1099, the mileage expenses for that comes off the top.

You can count the trip 1 and 2 combination like it was direct from your house to bank#2.
(i.e., despite the aggregate mileage, you can't deduct more than the direct path without the personal stop).

You can certainly deduct the trips in between your temporary job sites and between the temporary job sites and your regular job.

You want to be sure to keep scrupulous records. Get an auto expense book or just a notebook. Record the date/time, mileage and purpose of each trip as you make it. The IRS calls this contemporaneous record keeping. It is perhaps your best resource (and if needed defense) when you go to filing your taxes. You can deduct the cost of the book too.

 

[Kiawah]

You might want to investigate traveleyes2, available at TravelEyes2® Personal GPS Vehicle Tracker. It's a little GPS recorder, which tracks where your vehicle has been. You can let it track for say a month, download the data to your pc, and then export the data to a spreadsheet. There is a summary which shows all the stops you made, the distance between stops, date and time of each stop, etc. You know exactly which each stop is and shows you on a map, and you can also mark it with the specific company that is at that GPS location. It also shows the path traveled, as well as the speed at each sampling along the way and the maximum speed per trip. Not sure you need/want all that

You may find this as a way to reduce the amount of manual tracking that it sounds like you are doing. Dump it to a spreadsheet, add any additional info you may need, and then summarize everything as you may want it.

I've had these on all of our vehicles for a while, really easy to use. I suspect that there are other comparable products if you look around.

Just a thought.

 

[dtownjbrown6262]

Just what is the nature of the "mystery shopper" gig? Most of them are scams. How are you getting paid? If you're getting 1099, the mileage expenses for that comes off the top.

Flying Ron - thanks for the "scam" concern. You're right, there are alot of scames out there but I was able to find a NATIONAL mystery shopping association (that offers certification and everything ). I requested access to their "legitimate" consumer analysis company list and applied only with their official members (i.e. NON-scammers). Method of payment is different amongst companies, some offer direct deposit, some pay thru PayPal ONLY, others will mail you a check (but that of course delays payment). I dont expect that I will get a 1099 from either of them, since I doubt if I'll make $600 with any one company this year. That isnt to say however that I dont plan to make more than that from a combination of companies.

Just to be sure Im clear, I can count the three miles from Trip1 AND the two miles from Trip2 even though I was traveling in the opposite direction? I realize that I would be the only one to know that, since my mileage log doesnt record the general direction of the miles, but I just want to be sure.

Additionally, it looks like all my miles can be counted except the 8 miles it takes me to get home from my regular job....is that correct? What if I had made an extra "shop" on my way home from work, lets say 4 miles from my job in the opposite direction. Would I then be able to count the 12 miles it will take me to get back home (since its not "technically" from my regular job)?

Thanks Again,

jb

 

[LdiJ]

Everyone is making this a little more complicated than it needs to be.

Your first business or working leg each day and your last business or working leg each day is your "commute". Legs in between that are business miles. Personal stops along the way are not relevant unless it takes you out of your way.

 

[dtownjbrown6262]

Your first business or working leg each day and your last business or working leg each day is your "commute". Legs in between that are business miles. Personal stops along the way are not relevant unless it takes you out of your way.

Okay, now Im confused again. So, according to you, I can't count Trip1 or Trip5 but all the others are "okay"?

 

[FlyingRon]

You can't count Trip 1 or 2.

 

[LdiJ]

You can't count Trip 1 or 2.

1 and 2 are the same leg. The stop to go to the bank for personal reasons is irrelevant. That is your first commuting leg and therefore you cannot count the mileage.

3 and 4 you can count the mileage.

5 does not count, it is your last commuting leg and therefore you cannot count the mileage.

Again, personal stops are irrelevant unless they take you significantly out of your way during a leg that counts.

 

[dtownjbrown6262]

You can't count Trip 1 or 2.

1 and 2 are the same leg. The stop to go to the bank for personal reasons is irrelevant. That is your first commuting leg and therefore you cannot count the mileage.

FlyingRon & LdiJ - thanks for the clarification. I wonder if either of you might be able to tell me what it is Im "misunderstanding" about the chart on Publication 463. Im looking at page 14 of the 2007 edition (Figure B. When Are Transportation Expenses Dedutible?)

It states that "Most employees and self-employed persons can use this chart, but do not use this chart if your home is your principal place of business. See Office in the home". Now, my novice eyes thought that this applied to me since (1) As an independent contractor Im considered to be self-employed, only part-time but nevertheless.....and (2) I do not use my home as principal place of business. Did I misinterpret this in some way?

Then there's the actual diagram itself....which has an icon of a house (leftmost corner) with an arrow drawn to an unidentifiable icon labeled temporary work location (topmost corner). The caption above the arrow reads, "deductible if you have a regular or main job at another location"....which, again I saw as applying to me. Now, according to this statement it looks like my first leg can be counted but you two agree that it can not. I wonder what it is Im mising here? Is there some factor about my situation that excludes me from using this chart? Am I really not considered an independent contractor? Does my "regular" job disqualify me for some reason?

Ive always been brought up viewing IRS audits as "Armageddon" so I want to be sure Im understanding everything completely so as not to inadvertently break some ambiguous tax law. I sincerely thank you two for taking the time to educate a neophyte...SMOOCHES

 

[LdiJ]

FlyingRon & LdiJ - thanks for the clarification. I wonder if either of you might be able to tell me what it is Im "misunderstanding" about the chart on Publication 463. Im looking at page 14 of the 2007 edition (Figure B. When Are Transportation Expenses Dedutible?)

It states that "Most employees and self-employed persons can use this chart, but do not use this chart if your home is your principal place of business. See Office in the home". Now, my novice eyes thought that this applied to me since (1) As an independent contractor Im considered to be self-employed, only part-time but nevertheless.....and (2) I do not use my home as principal place of business. Did I misinterpret this in some way?

Then there's the actual diagram itself....which has an icon of a house (leftmost corner) with an arrow drawn to an unidentifiable icon labeled temporary work location (topmost corner). The caption above the arrow reads, "deductible if you have a regular or main job at another location"....which, again I saw as applying to me. Now, according to this statement it looks like my first leg can be counted but you two agree that it can not. I wonder what it is Im mising here? Is there some factor about my situation that excludes me from using this chart? Am I really not considered an independent contractor? Does my "regular" job disqualify me for some reason?

Ive always been brought up viewing IRS audits as "Armageddon" so I want to be sure Im understanding everything completely so as not to inadvertently break some ambiguous tax law. I sincerely thank you two for taking the time to educate a neophyte...SMOOCHES

If your home office is your principal place of business (your true "office" where you do lots of work for your business) then any trips from your home to work locations (not employment but work locations related to your business) are deductible. You have stated that this is not the case for your business.

Therefore generally the first trip from home to your first stop of the day that is either business or employment related is your first commuting leg, and the trip from the last business or employment stop is your last commute of the day.

I really don't have the time to go look for the chart you are looking at, but I have to assume that you are misinterpreting it.

Of course there are exceptions to the rule that have flown before the IRS. I went through one audit where someone had to make a stop 30 miles in one direction for their business, and then had to backtrack that 30 miles plus another 20 miles to get to their place of regular employment. The IRS agent for that audit did consider those 60 miles (back and forth to the business location) to be deductible mileage. However, that person also did enough work in their home office that the agent was waffling as to whether or not the home office was their "place of business".

So its often not as black and white as it may seem when it comes to an audit and mileage. In that case the agent disallowed the home office, but allowed some mileage that another agent might have considered to be questionable.

However if you follow the rule that the first and last legs are commuting miles, you are definitely safe.