Today TaxMama hears from Tanya in the Tax Parlor who says, “I am filing a schedule C, where all the income comes from one 1099 (one client). My only driving was to and from the client’s office (essentially commuting) and there is no home office. Will this be qualified business mileage/use?”
I don’t know… If I were the IRS, I would say that you sound like an employee to me. You’re just being paid as if you were self-employed. And probably getting screwed in the process, since you’re paying both halves of the employment taxes; not getting paid vacation or holidays; or even medical benefits. Good deal!
Employees don’t get to deduct commuting charges. So that’s another thing you end up losing under audit.
If you were my personal client (and no, I’m not accepting new clients), I’d send you back to your boss and insist that you be put on payroll.
But, as you are, taking the mileage deduction is a toss-up. You can try and hope you never get audited.
In case you do, be sure you’ve set yourself up as a business.
Get a business license, print up business cards, make up some flyers or advertisements so you can pick up new clients, open a business bank account to receive your income from this company – in other words, act like a business.
And two things will happen.
1) You’ll survive an audit.
2) You’ll probably actually pick up more work – and be able to raise your fees.
Your employers will see how valuable you really are, and that they may really lose you – and they’ll take you seriously and put you on payroll with full benefits.
And remember, you’ll find answers to lots of questions about business deductions and other tax information, free. Where? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.]
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