if you do several shops in a day, going from one directly to the next; can you just track your beginning and ending mileage or do you track mileage between each shop?

Split between the shops as our city taxes are based on location.

I track my mileage from home to the first shop, then the next shop, then the next and so on and so forth then back home. Started doing that for my merchandising job because they pay me for mileage from store to store. And Google Maps and Mapquest are not always right. Many a times have Google Maps put me on the wrong side of the river.

Mine looks like this:
Date:__________ From: __________ To:___________
. ___________ End: __________ ___________
. ___________ Start: __________ ___________
. ___________ Total: __________ ___________
Then repeat for 36 times If you do it right it will show up as this in two columns front and back of the page.

The company excludes the first 40 and the last 40 miles if the store is more than that away from your starting or ending stop. IE 1st store is 65 miles away. 65-40 is the mileage. Last store is 300 miles away you get paid for 260 miles. One time they wanted me to drive from Dallas TX to Miami FL. Then they realized their mistake and I didn't get it. Now with Obama care and only 28 hours a week. I'm lucky if I get sent more than 40 miles from my house.

Edited 2 time(s). Last edit at 01/16/2015 04:33AM by 2stepps.

I enter my mileage when I get in my car to go to the first shop then don't enter it again until I pull in the driveway from the last shop. Of course my spreadsheet shows exactly where I went and I have receipts and business cards to pull addresses from if I need to.

so....mileage can add up to be a substantial amount of a tax refund?

Not of a refund, but yes a substantial deduction from MS income.

the tax filing seems so confusing to me. I'm dragging my feet this year since I have several changes that happened last year. I got married, did some shops towards the end of the year but don't have clear mileage tracked, and I bought quite a bit of stuff for a photography business that I intend on pursuing but haven't taken any legal steps towards yet. Taxes are going to be a mess this year.

You need to talk to a tax professional. You will need at least two Sch C's, one for mystery shopping and one for photography (so you can deduct the expenses if you are sure it will become a business).

I have discovered that if I put my day's route into Mapquest's route planning software, then text the resulting route to myself, that data is preserved forever in my text history (I have all texts automatically backed up to my gmail account. I may not actually use Mapquest's navigation, but the mileage history is there for me to use to fill in my spreadsheet even if I forget to write down beginning and ending mileage on any given day in the rush to get going in the morning or get in the house when I get home. I rarely forget to map out the day's route, and I can do it the night before when I'm not thinking about a million other things.

merchandising would fall into the same schedule C as mystery shops?

@cjbstar wrote:

You need to talk to a tax professional. You will need at least two Sch C's, one for mystery shopping and one for photography (so you can deduct the expenses if you are sure it will become a business).

@lynleestar wrote:

merchandising would fall into the same schedule C as mystery shops?

@cjbstar wrote:

You need to talk to a tax professional. You will need at least two Sch C's, one for mystery shopping and one for photography (so you can deduct the expenses if you are sure it will become a business).

My merchandising is a w2 job not a 1099.

I've been through an audit and won (with a W2 job..not mystery shopping)..the IRS agents make up their own rules...even when you send copies of the actual rules to them...

it is better to be exact with each stop noted.....

if you just list starting point A and Last stop F....you can't detail where you were in between......and IRS can claim you went straight from A to F...

You are not supposed to count from home to 1st stop...or from last stop to home...just the extra trips in between..from what I was told....but may not be true...as you do management tasks from home.

[biztaxlaw.about.com]

Edited 2 time(s). Last edit at 01/17/2015 07:27AM by jmitw.

I keep records for each shop. One of my routes is 399+ miles that has several stops. I write it down for each shop.

As a former professional tax preparer, I will suggest being anal about any deductions...is always in your best interest. I was hit years ago because the company I worked for tried to get me for expenses. It worked out because I kept excellent records and the company took the hit.

There is no such thing as too much information when you have to prove it to the IRS. Speaking as a former tax preparer, I would gladly go through your shoe boxes, so I could save you a few bucks.

There seems to be a persistant myth that mileage from home to first stop and from last stop to home cannot be counted. In most cases, this is NOT the case, so consult a small buisness tax professional. It all has to do with where you do you "in office" work, but many accountants appear not to understand that at all. If someone gives you a "one size fits all" rule about this, find a new advisor, IMHO.

I hope that our resident tax pros will chime in here. There are some very, very old threads where this was hashed out, and which cited the relevant IRS flow charts that can be used to illuminate the differences, but I have not found them.

I do what "jpgilham" posted, enter the starting and ending mileage. I haven't been called out on it yet. Also, don't forget to save those receipts for meals while on the road, they count for a deduction too.

thank you all for the input~! Another question....if I do a gas station shop with a purchase required but no reimbursement, can I get $5.00 worth of gas and count it as an 'unreimbursed expense'?

If you're away from home overnight, you may do better to take the per diem rate for meals and/or hotel. If you travel more than 50 miles from your town, you might be able to take the per diem rate even if you don't stay overnight.

I would be careful deducting more than the minimum required to do the shop. Usually they tell you to buy some token item just to get a receipt (such as a pack of gum). I wouldn't try to deduct a $5 gas purchase that was not required for the shop.


The controversy about the "mileage to the first shop and from last shop to home" being deductible or not arose because the IRS instructions state that you can deduct mileage from a "qualified home office" to a work stop. in other places they specifically state that travel to your first work location of the day and the trip from the last work location to home is *not* deductible; it is considered commuting mileage -- even for someone who is self-employed.

So we need to determine if the home "counts" as the "first work location" which would make the round trip entirely deductible.

The problem is that "qualified home office" has a specific definition for the "home office deduction." It does not have a specific definition in relation to the "mileage deduction." In order to take the home office deduction, there must be a space in the home used "regularly and exclusively" for the business in question.

The question, which is *not* addressed in the IRS regs is whether a "home office" exists if it is not claimed on the tax return. Some people believe that the mere fact that we do our shop-hunting and reporting and recordkeeping in our home automatically makes it a "qualified" home office even if we *do not* take the home office deduction on the tax return. The situation is simply not addressed in the regs.

My feeling is that the word "qualified" is a signal that the "home office" must meet certain requirements. Since the only place the requirements for a home office are defined is in relation to taking the home office deduction, I believe (and was told so in a small business seminar I took when I first became self-employed) that I can only deduct mileage to the first stop *if* I actually claim the home office deduction.

Others believe (but I cannot confirm this specifically in the regs) that merely being the principal place of business qualifies for the "first and last leg" mileage deduction.

I suspect in the real world it comes down to who you get for an auditor.

My suggestion (as a tax preparer) is to avoid the issue by simply having a designated space in the home where you keep some of your mystery shop paraphernalia and regularly sit there to do something related to mystery shopping -- and don't let your kids use the desk for homework -- and claim it as a home office deduction. It can be nothing more than a desk where you set your laptop when you do your mystery shopping work; the computer wouldn't have to live there permanently. It just needs to be a designated space, it does not have to be an entire room. I claim a 20 square foot "office" for mystery shopping -- a desk where I store my shop documents and travel laptop and sit down to do my reports on it -- and that means I don't have to worry or wonder if "my" auditor will interpret the regs strictly or logically. Having that "office" on my tax return legitimizes my mileage from door to door.

I have a different home office I use for my accounting business. Different desk, chair, computer, printer, scanner, and file cabinets. So whether I am traveling on a shop or traveling to pick up and deliver tax returns, the first and last leg of the trip is deductible.


But you and your tax preparer will have to defend any audit on this point so the best thing to do is to talk to them about it and follow their advice. Auditors work regionally; some parts of the country may simply take a different approach to this question. All I know is I cannot find a reg that specifically addresses the issue of taking the mileage when the departure point is not a qualified home office that was taken as a deduction on the tax return. I haven't been through an audit where this was a factor, and even if I had, there is no way of knowing if whatever decision was made would apply to the next auditor.

I have seen and heard it both ways But I'll be damned if they try and say that the 150 mile drive to the first stop is a commute while doing my W2 job when I might go there 2 maybe three times a year and the company office is 250 miles in the other direction. Was going to put an insulated shed with plumbing, AC & heat in the back yard so that I could store my work stuff in it and do my work from there. But the city wouldn't grant the permit because they thought someone might live in it. Guess a 16x20 foot two story building was too big.

My understanding is that you can't deduct meal expenses at all unless you travel overnight for business purposes. On a one-day route, none of your meals are deductible, no matter how far you go. (Unless you have to pay for an unreimbursed meal as part of a shop, I suppose.)

The IRS lays this out in Publication 463, stating you can only deduct travel expenses (including meals) when: "Your duties require you to be away from the general area of your tax home substantially longer than an ordinary day's work, and you need to sleep or rest to meet the demands of your work while away from home." In the examples they give, they indicate the sleep or rest should be in a bed, and can't just be taking a nap in your car or stopping at a truck stop to rest for an hour or so.

Since mileage/business deductions are such a grey area within the IRS, you have to decide how agressive you want to be at tax time. Do you 'feel lucky' and use everything, or will pushing the boundries cause you to lose sleep at night? Only you and your accountant can figure out the answer to that one.

The only time I get a meal is when I work out of my area. I try to plan 1-2 days per week when I travel greater than 50 miles, doing 6-10 shops. These shops pay a great deal more which is why I do it, and fills in for days with no work. I leave around 8am and arrive home hopefully by 6pm or so. There is no way they (the IRS) are going to tell me that my meal is not deductible. These are also working lunches where I check and answer my email from schedulers or editors, return calls, sign up for more shops, review my notes, etc. I was a realtor for 20 years and always wrote off my meals as an expense, but then again, had a client with me. My point is, if I get a W-2 and wine and dine clients, I can write it off as an employee business expense. Why is it any different when I get a 1099, and have a working lunch?

As for mileage....I make sure to throw that first stop in within a couple miles from home, usually a gas station shop or convenience store. That's where the mileage starts, then head out to the highway for my trip.

The way I tend to think about it, wining and dining clients is a working lunch while answering emails and such is just working through lunch.

This is the way it used to work for mileage.

If you have 2 jobs then you couldn't take the mileage from home to the first job. It was specifically for jobs you receive a W 2 form.

So you work at the Dr office from 9a-12n and your 2nd job is at McDonalds from 2p-10p. You were not allowed to take the mileage from home to the Dr office. You were allowed to take it from the dr to McDonald's and back home.

This rule is messed with a lot.

I take my meals because I'm sitting in McDonald's writing reports and catching up on work emails.

Those of us that only get 1099 forms in theory can take all our work related mileage. There is some confusion about it this year and I highly recommend sitting down with a tax professional.

Personally, I write mileage from home and then location to location. It is always better to have too much info than not enough. I had clients years ago that had a straightforward tx return and were audited. The saying in the tax industry is COVER YOUR A..!

So if I leave my house, do one shop, and go back home, it would be safer to claim no mileage deduction? Considering that I do not have a designated office space in my home for my MS work.

Edited 1 time(s). Last edit at 01/30/2015 09:44PM by MPorter3112.

"I take my meals because I'm sitting in McDonald's writing reports and catching up on work emails."

Does this mean you deduct meals in your home area? I've always been advised not to deduct lunches while on a day trip and to deduct all of them when traveling.

I track mileage per assignment. Sometimes, I end up detouring to run a personal errand that's not along the route and I want to make sure I'm truthful on what I deduct on my taxes.

I'm never in my home area. My long routes start with me traveling at least 100 miles one way just for the first shop. That being said the closest McDonald's is over 20 miles away. If I stop for breakfast or a burger on the way home from those particular locations I do not take those meals.

@MPorter3112 wrote:

So if I leave my house, do one shop, and go back home, it would be safer to claim no mileage deduction? Considering that I do not have a designated office space in my home for my MS work.

No, if that's what your route is for the day take it. Until the IRS gets its ducks in the two for 2014 max out what you can.

I do long routes. My favorite is around 400 miles. But if I can I do what another poster does and try to incorporate personal errands. Theoretically, I should deduct the 1/4 mile it takes me to pull into Sams Club. Thankfully, the IRS only like whole numbers.

Keeping accurate records of your total mileage is the best way to do it. When it comes to filling out your schedule c, the form only asks for total business and the total personal mileage numbers.

If you get on the IRS wheel of fortune, your detailed records will only help you.



Edited 1 time(s). Last edit at 01/31/2015 12:39AM by MA Smith.

Home area was not a good choice of words. Are these one day routes or overnight trips?

Merchandising is the same schedulke C as mystery shops. I have been doing mystery shops/audits/merchandising assignments for 6 years and my tax guy always lumps all of it together.