Author Topic: Self Employed tax question  (Read 1829 times)

MustardTiger

  • Stubble
  • **
  • Posts: 180
Self Employed tax question
« on: December 19, 2014, 09:28:47 AM »
My wife works as an independent contractor for a spa (Massage Therapist) but has only one place of business.  If I am reading correctly this would mean that the mileage is not deductible for her commute to and from.  Correct? 

matchewed

  • Magnum Stache
  • ******
  • Posts: 4313
  • Location: CT
Re: Self Employed tax question
« Reply #1 on: December 19, 2014, 09:36:39 AM »
What are you reading?

MustardTiger

  • Stubble
  • **
  • Posts: 180
Re: Self Employed tax question
« Reply #2 on: December 19, 2014, 09:42:58 AM »
Just searching through turbotax questions and askme stuff.  I couldn't get an explicit answer but it seemed like driving to and from your regular place of business was considered "commuting" and thus not deductible.  Just wanted to make sure that was correct.

BlueHouse

  • Magnum Stache
  • ******
  • Posts: 2914
  • Location: WDC
Re: Self Employed tax question
« Reply #3 on: December 19, 2014, 09:43:42 AM »
It depends.  Does she have a home office where she works every day doing management and accounting work for her business (including invoicing)?  If so, then home is the primary business space and the commute costs can be deductible. 



Fallenour

  • Stubble
  • **
  • Posts: 125
  • Location: Earth
  • RE/PM Investor, P2P lender, Business Owner
Re: Self Employed tax question
« Reply #4 on: December 19, 2014, 09:55:43 AM »
My wife works as an independent contractor for a spa (Massage Therapist) but has only one place of business.  If I am reading correctly this would mean that the mileage is not deductible for her commute to and from.  Correct?

incorrect. If she is a 1099, which it sounds like she is, as long as that place of business specifically isnt HER BUSINESS location, then yes, its tax deductible, under the premise of cost of doing business (CoDB).

Justification is if she doesnt drive to the location to conduct her service for her customer (the owner of the spa) she cannot profit, and thus, must incur the costs in order to conduct business.

MustardTiger

  • Stubble
  • **
  • Posts: 180
Re: Self Employed tax question
« Reply #5 on: December 19, 2014, 01:26:11 PM »
Some travel is not considered business-related:

Driving from your home to your workplace and back is commuting. It's not deductible on either your business or your individual return.

Found this on the turbotax website.  I cannot seem to find anything on the IRS website or others to back this up.  I also just asked my wife and it seems that last year she did not receive a 1099 or any other paperwork even though she is classified as an independent contractor.  Would this just be the business not doing what it should, or another reason?

BlueHouse

  • Magnum Stache
  • ******
  • Posts: 2914
  • Location: WDC
Re: Self Employed tax question
« Reply #6 on: December 19, 2014, 01:35:04 PM »
Some travel is not considered business-related:

Driving from your home to your workplace and back is commuting. It's not deductible on either your business or your individual return.

Found this on the turbotax website.  I cannot seem to find anything on the IRS website or others to back this up.  I also just asked my wife and it seems that last year she did not receive a 1099 or any other paperwork even though she is classified as an independent contractor.  Would this just be the business not doing what it should, or another reason?
You need to identify your primary workplace.  For instance, my primary workplace (which also happens to be the legal address of my business) isn't where I do the majority of my work.  I work quite often at client sites.  The travel from my home office (primary place of business) to my client site is not considered commuting.  In my case, my commute is from my bedroom to my home office.  Everything else is business travel. 
I was warned early on that I cannot work 5 days per week every week at a client site and expect that to be treated as travel -- no, the IRS would see that as a commute.  I perform enough work at my main office and spend enough days doing it, that when I do go to client sites, I can treat it as travel. 

What's the magic number?  How much is enough?  There doesn't seem to be a rule for that.  But if my mileage log showed that I was consistently going to the same location on a daily basis for an extended period, then I would expect to lose that point in an audit.  My accountant warned me about that early on.