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Thread: Independent contractor tax question

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    Senior Member lotti's Avatar
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    Default Independent contractor tax question

    If I am an independent contractor, can I deduct the mileage I use when driving my only car to and from work?

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    Default Re: Independent contractor tax question

    I don't know if you can,perse,but I have.Save your receipts.
    One of woman's cardinal rule: Body parts can be fake,everything else has to be real.

    一个女人的枢机规则:肢体可以伪造,一切必须真实.

    中国大CHINESE BIG BOOBS!!!中国大




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    Featured Member MadisonM's Avatar
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    Default Re: Independent contractor tax question

    I think you can if you are traveling a certain distance- I think anything over 20 miles can be deducted, or something like that. I don't really have to worry about it because I live so close to work. My accountant did say that if you go to the mall or to a store to buy items for work, such as costumes, makeup, etc, you can use that mileage as a deduction.
    Take the road less traveled- just make sure you have a map.

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    God/dess FrustratedBunny's Avatar
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    Default Re: Independent contractor tax question

    I was told by my accountant that since I'm self employed and I don't go to the same place every day as a regular commute I can deduct my mileage but that I have to keep a log of the specific miles so I write it in a little book each day.

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    Banned Melonie's Avatar
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    Default Re: Independent contractor tax question

    There are two ways that it's 100% 'legal' for an independent contractor to deduct mileage. #1 is if you are on a business trip which requires an overnight stay - like dancing at a club in a distant city. Keep the hotel receipt though because if you are audited the IRS will definitely want you to show a hotel receipt to go with the mileage.

    The second 100% 'legal' mileage deduction is for local travel BETWEEN places of business. This means that when you drive from your home to your normal club that the mileage isn't deductible, and when you drive home after working at your normal club that the mileage isn't deductible, but if the clubowner sends you to do a bachelor party then your mileage from the club to the party and back to the club again ARE deductible.

    There is a 'gray area' in regard to deducting mileage between your home and a single place of business without an overnight stay to go along with the mileage. While it's not stated in black and white, if at least a two hour drive is involved IN EACH DIRECTION the IRS will typically allow a deduction for the mileage. But if you're making an hour drive or less from your home to your club and back home again odds are any mileage deduction will be disallowed, as this is considered to be commuting to and from a 'regular place of work' and not travelling on business.

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    Default Re: Independent contractor tax question

    My recolllection of these rules may be dated, but....

    If you are truly an independent contractor and have a home office where you do your sales, records, etc, I believe that office can serve as your office so that your office commute is zero. But then going from your home office to work sites is deductible, but I believe you need to keep a contemporaneous log of your travels, including tolls, parking, gas, oil, washing, repairs, etc. Ask a professional about this, and the following...

    But most of you merely treat your workplace as your home office and also probably are wrongly treated as independent contractors for your 'employers' financial gain. So what do you do there?
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    God/dess VenusGoddess's Avatar
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    Default Re: Independent contractor tax question

    When Scorpio had his taxes done THIS year, the accountant said that he COULD NOT deduct his mileage from his home office and his work office. He could deduct all mileage from home to his accounts. I asked about if I was an IC dancer and I traveled from home to VIP's Chicago...if I could deduct the mileage. His emphatic answer was NO. In the IRS's eyes, it's considered your "working base" and you cannot deduct for that. If you do not work "solely" at any one club, then you could deduct for the travel expenses for going to different clubs to work. But, if you work at one club only...you cannot. Or, rather, you CAN...but if you get caught doing that...you will have the deduction removed and will be responsible for paying all penalties, interest, taxes, etc for that. Your choice, really.

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    God/dess threlayer's Avatar
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    Default Re: Independent contractor tax question

    Maybe the CPA assumed the home office is not real, or would be hard to substantiate, and the work office is easy. Maybe depends if he is an IC and deducts his 'dedicated' home office expense. I know when someone is an employee commuting expense from home to work is not deductible, though there are mass transport pre-tax benefits. In any case I believe to get deductions for anything that is appropved, you used to need written records (typically odometer readings, date, location, purpose etc). I had to do it for years.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    God/dess FrustratedBunny's Avatar
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    Default Re: Independent contractor tax question

    I have a home office deduction (not as a dancer) and my CPA deducts mileage from my home office to work but I don't go to the same place every day so maybe that is why it's okay.

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    Default Re: Independent contractor tax question

    Quote Originally Posted by FrustratedBunny
    I have a home office deduction (not as a dancer) and my CPA deducts mileage from my home office to work but I don't go to the same place every day so maybe that is why it's okay.
    Yes this is exactly why ... your home is your legal place of business, and all travel is therefore between your place of business and your business clients. Your accountant would appear to be 'fudging' the fact that your trips to the club are actually trips to a business client of your first business, rather than commuting to your place of work for a second business.

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    Default Re: Independent contractor tax question

    As discussed by VG above the comute from your home, even if you have a "home office" to where you work "your club" is not deductible. The fact that you may work at two or three different "local" clubs during the week or month does not change that, it would be no differnt than a girl who works at Hooters during the week, a "Coyote Ugly" type of bar on Friday and Saturday nights and some sports bar Sunday afternoons during football or the Nextel season. If you travel to another club IE drive from Tampa to Miami for the weekend then that is deductible, but have a good paper trail, hopefully you didn't "stay with a friend" and pay for your gas in cash. Also if you seem to be making this trip every weekend and it that seems that you never work locally, in Tampa in this case, you may find an IRS agent that will decide/rule that your trips to Miami are really nothing more than just a "long commute" that you are choosing to make for whatever reason rather than just moving to Miami.

    Again the "as long as you don't get audited it's OK" rule applies.

    I agree with Melonie, your CPA is basically betting on the fact that you won't get audited IE caught which is not the same as saying that it is "legal/OK" it is same as driving 65 in a 45 and not getting a ticket because there are no cops around. The speed limit is not now suddenley 65 it just means you didn't get caught.

    If you were ever to get audited, don't be surprised when that trusty CPA of yours is all the sudden selling you down the river to save his/her own backside. "honest MR. IRS agent I was going by what she told me" The fact that he/she is willing to file your return with false info, info he/she knows is false, just betting YOU won't get caught is not a good sign.

    As far as the home office discussion, it is a popular option until you really get into the details. It has to be a space dedicted just to your business, a den or study, spare bedroom or whatever where you also do other personal business such as online bill paying, writing term papers for school or just surfing the net for you enjoyment will not cut it.

    One of the big things a home office allows for is you get to depreciate part of the value of you house and take that as a deduction, I forget over how many years but last time I check it was something like 5-7, not all in one year.

    When figuring out the percent you can depreciate you can go by sqare footage or the number of rooms, if you had for example a 200K, 2000 square foot, 10 room house and the room in question was 200 square feet it would be 10 percent either way and you could depreciate 20k, however here is "the rest of the story" that makes it no as attractive, when you sell your house, that house you bought for 200K, lets say 10 years later for 300K instead using the 200K figure to figure out your profit you have to use 180K the "depreciated value" so the "profit" is now 120K instead of 100K. The IRS won't "forget" you did depreciated the house, so it's pretty much a "pay me now or pay me later" situation. Some will say that you can write of home repairs, utilties ETC but again you have to apply the 10 percent factor to those expenses. so if you utilities are 200 a month that is only 20 dollars. You may not have any repairs if you live in a newer house, I have lived in my house for around 10 years and have not had to spend even 1000 dollars on repairs.

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    God/dess threlayer's Avatar
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    Default Re: Independent contractor tax question

    Well, what can I say? I found this in the TurboTax version of IRS Publ 334, Chapter 8 (Sorry about the extra lines, must be some special features of the vBulletin editor.)

    IRS Publication 334 - chapter 8, Business Expenses (2003)



    Car and Truck Expenses

    If you use your car or truck in your business, you may be able to deduct the costs of operating and maintaining your vehicle. You also may be able to deduct other costs of local transportation and traveling away from home overnight on business.

    ...<specialty vehicle stuff>...

    Local transportation expenses.
    Local transportation expenses include the ordinary and necessary costs of all the following.

    • Getting from one workplace to another in the course of your business or profession when you are traveling within the city or general area that is your tax home. Tax home is defined later.
    • Visiting clients or customers.
    • Going to a business meeting away from your regular workplace.
    • Getting from your home to a temporary workplace when you have one or more regular places of work. These temporary workplaces can be either within the area of your tax home or outside that area.
    Local business transportation does
    not include expenses you have while traveling away from home overnight. Those expenses are deductible as travel expenses and are discussed later under Travel, Meals, and Entertainment. However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction.


    Generally, your
    tax home is your regular place of business, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located.

    Example. You operate a printing business out of rented office space. You use your van to deliver completed jobs to your customers. You can deduct the cost of round-trip transportation between your customers and your print shop.

    You cannot deduct the costs of driving your car or truck between your home and your main or regular workplace. These costs are personal commuting expenses.

    Office in the home.

    Your workplace can be your home if you have an office in your home that qualifies as your principal place of business. For more information, see Business Use of Your Home, later.

    Example. You are a graphics designer. You operate your business out of your home. Your home qualifies as your principal place of business. You occasionally have to drive to your clients to deliver your completed work. You can deduct the cost of the round-trip transportation between your home and your clients.

    Note the LAST example, for Office in the home.

    NOW, to me, the principal place of business would mostly be your club if you dance at one club most all the time. But if you are a true IC, and so dance at different places during the week and even day, and you have a true home office, then the above example applies. From your home office you arrange your different schedules, handle your work finances, manage your costumes, have a business phone, do promotional calls and advertising, etc. But I'll bet few of you do that nor have a dedicated room.

    I did look into this in detail when I was using it, and I did hear a couple of different interpretations. So I asked a detailed question of a local IRS agent with lots of details including the interpretations. I know it isn't definitive, but I got the exacy response as in the last example. She cautioned that I would have to prove a definite home-in-office using all the rules. (And that's what I had for a lot of years, no TV or stereo; I had clients there, etc.)

    I'm not arguing here, just presenting info. Make up your own minds.
    Last edited by threlayer; 02-22-2006 at 09:54 AM.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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