Question About Mileage Deduction

[AgeOfEnlightenmentSCP]

As an independent catastrophe claims adjuster "in the field" going from claim to claim, I typically take all mileage when I travel out of the area.

My latest gig last year in Charlotte, NC was "inside adjusting" from a desk (still a 1099 subcontractor) and I'm wondering if it's legitimate to deduct ALL mileage from that entire assignment as is my custom, or may I only deduct mileage from to and from Charlotte?

I can't seem to find a straight answer on the IRS website.

[mwcpa]

a number of questions come to mind....

where is your office?
is it in your home, if so, does it meet the exclusive and regular tests in the law?
do you drive to Charlotte everyday from your home?
if your office is not in your home, do you drive to your office first and then go to Charlotte?
is the Charlotte office the office of your client or is it your office?

example 1...
A has an office in NYC and in Bergen County NJ (just over the GW).
A splits time between the two office, he starts and ends his work day in one office only.
All of A's costs to the office from his home are "commuting costs" and not deductible.

example 2....
A has an office in NYC
A has a client in Bergen County, NJ (just over the GW)
A travels to his client's facility in NJ after stopping at his NYC office.
A's mileage to NJ is deductible, as is the huge toll to come back.

[AgeOfEnlightenmentSCP]

Apr 2, 2012 14:20:52 GMT -5 mwcpa said:

a number of questions come to mind....

where is your office?
is it in your home, if so, does it meet the exclusive and regular tests in the law?
do you drive to Charlotte everyday from your home?
if your office is not in your home, do you drive to your office first and then go to Charlotte?
is the Charlotte office the office of your client or is it your office?

example 1...
A has an office in NYC and in Bergen County NJ (just over the GW).
A splits time between the two office, he starts and ends his work day in one office only.
All of A's costs to the office from his home are "commuting costs" and not deductible.

example 2....
A has an office in NYC
A has a client in Bergen County, NJ (just over the GW)
A travels to his client's facility in NJ after stopping at his NYC office.
A's mileage to NJ is deductible, as is the huge toll to come back.

OK- details:

1. I'm an employee-- W-2 of my company, a C Corp located in Florida.

2. My company signed a contract to provide services to another company located in Charlotte, NC.

3. My home and my company's office are both in Florida. My client's office was in Charlotte, NC; and the work required that I be in Charlotte

4. While in Charlotte I stayed at an extended stay near the Charlotte office.

5. My company owns the car I use for this kind of work, and provides me with a company car.

6. I realize my company can deduct mileage to and from Charlotte (I drove); the question is can my company take the mileage to and from the extended stay and my client's office?

[mwcpa]

directly from pub 463...

'Employer-provided vehicle. If you use a vehicle provided by your employer for business purposes, you can deduct your actual unreimbursed car expenses. You cannot use the standard mileage rate. See Vehicle Provided by Your Employer in chapter 6. "

and since you own the company there are issues related to you claiming expenses (2106) and the company not... the company reporting them in 99.9% of cases is better.

[AgeOfEnlightenmentSCP]

My plan is for the company to deduct the mileage. My specific question is whether or not the mileage to the office from the hotel and back to the hotel is deductible? I know the mileage to and from Charlotte is deductible, the question is whether or not my mileage while in Charlotte is all deductible as well?

[mwcpa]

if the company is paying for the car expenses then you cannot deduct the gas, repair and other costs and take a mileage allowance... you have a choice, one or the other, not both... and if your company has more than a certain level of cars you MUST take actual costs. If the company pays the gas and you want to take mileage you are gonna create havoc for the non cash expenses reported by the company... who gets the cash... a big mess...

Example... if I fly to LA for business, I rent a car... the cost of the car are 100% deductible if the trip is 100% business.

Example... if I drive to Albany, NY from NYC for business... I spend the night... while in Albany I drive from a hotel to my client's office... all of my miles are business miles and therefore all deductible if I report mileage and do not claim actual expenses for the car. One cannot claim actual + miles.... that's double dipping and not allowed in the law....

Issues come up when the trip is not all business.... that's an area a lot of people get in trouble....

I typically suggest to my clients that, especially mixed use cars, that they own their own cars and that their company reimburse them for costs related to business.. less aggravation when the IRS audits and puts forth the position that the car is not 100% business and you are left to prove it, which is hard the way most keep records.... a bigger issue is picking up phantom income and all of the payroll tax issues it will lead to by being too aggressive... remember where hogs end up.... slaughter...

[rangerj]

Ditto what mwcpa said. I would add that if you go this route then have the company/employer establish an "accountable plan" for reimbursement and follow all of the requisite rules. And YES travel from the hotel to the job site is deductible mileage when you are out of town as is mileage to meals and other business. Personal travel, e.g. site seeing or other personal activities are not deductible travel.

[mwcpa]

ranger... the issue here is that he owns the company and the company owns the car.... this is clearly trouble in river city on the surface... we do not have enough facts, but I have a feeling the company pays all of the expenses of the car and a mileage allowance s desired to boot.... as they say.... where do hogs end up.... in Congress... no slaughter...

[TheOtherMe]

I was about to ask if OP owns the company also.

Appears he does. Trouble is potentially brewing should there be an audit.