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Thread: For independent contractors...how determine milage writeoffs

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    Senior Member Sqrlbby's Avatar
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    Default For independent contractors...how determine milage writeoffs

    In the USA do you write off your daily commute to and from work? Or only when you travel for work?

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    Default Re: For independent contractors...how determine milage writeoffs

    The US IRS states that 'commuting' expenses, i.e. expenses incurred for travelling between home and a single place of work, are NOT deductible. To be deductible, the IRS directs that the travel must be exclusively business to business ... with examples being sales reps travelling between their offices and customer sites. In a context of dancing, this would mean that the expenses incurred to drive between home and your regular club are not deductible, expenses to travel between your regular club and a 'sister' club ARE deductible, but driving home from the 'sister' club is NOT deductible.

    There's a slightly different story for 'road trips' ... as long as the distance between home and the place of work is more than 100 miles and an overnight stay is involved, all travel and accommodation expenses qualify for legitimate business expense tax deductions.

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    Default Re: For independent contractors...how determine milage writeoffs

    Thank you so much!

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    Default Re: For independent contractors...how determine milage writeoffs

    Business to business trips would include driving to get supplies [say stripper shoes] and then from the store to the club. Oh gee you went twice this week and they still don't have those shoes in your size? Well,better try again next week......

    needed duct tape to fix your broken shoe while waiting for the new ones to come in? Pity the local home depot didn't have the right color,and you had to drive all over looking for it.

    At the end of the day the IRS asks for your commuting mileage and your total mileage.They ask if you have another car available to you. I do so that keeps red flags down.

    I tried and tried for years to really keep a log where I went as you are supposed to, lasted a few years.

    Never write 100 percent of mileage on a car

    use a realistic number for commuting

    Especially if you have a paid for car the mileage is a huge payout, if you don't try to abuse it, it is great.

    My business has a lot of reasons for legitimate travel, so the leave me alone, you may come under more scrutiny.

    If you are trying to tell them you made 10k last year and drove 50k miles to do it, they are not going to buy it

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    Default Re: For independent contractors...how determine milage writeoffs

    My business has a lot of reasons for legitimate travel, so the leave me alone, you may come under more scrutiny.

    If you are trying to tell them you made 10k last year and drove 50k miles to do it, they are not going to buy it

    For better or worse, with few exceptions, exotic dancing is a 'cash' business ... which automatically increases potential IRS scrutiny due to easy potential for 'creative accounting'. In addition, exotic dancing is considered to be an 'adult' business, which the IRS knows has an absolutely 'atrocious' tax compliance history. Also, if the IRS is given a blatant reason to suspect that 'creative accounting' is taking place, they can also question stated income numbers ( or substitute their own higher estimated earnings levels with associated higher tax bill ). While a lack of 3rd party documentation serves to limit IRS ability to prove a higher income level than the dancer reported, it also limits a dancer's ability to prove a lower income level than the IRS might estimate.

    Moral of the story is avoid attempting to claim tax deductions which are 'disproportionate' i.e. your example of $5,500 worth of business mileage deductions versus a $10,000 reported gross income ! The potential consequences of doing so can far exceed the 'cash value' of the disallowed deduction, if the IRS takes the position that unverifiable, self-generated dancer income and expense figures are a 'work of fiction' thus allowing the IRS to start substituting their own income and expense estimates !!!

    Along those lines, particular business expense tax deductions have been designated for additional IRS scrutiny across the board. Among those is the business mileage deduction ... along with the home office deduction.

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