I just had my taxes done and the big milage deduction is gone. The mystery shops know it too. And ask me if they told us about it. The tax code was changed two years ago. If you leave you home and drive to a mystery shop that milage is not deductable anymore. You can only deduct the milage from one shop to the other. The last shop you do back to your home is not deductable either. That is for all people not just mystery shoppers. If you don't believe me call a reputable CPA and ask. I am quitting mystery shopping. I can not afford it aanymore.
Time to get a new CPA. You are an Independent Contractor and your home is your office. Therefore the mileage from your home to your job(s) is deductible. Every site I visited tonight on the Internet says the same thing as this one below:
Are Miles from a Home Based Business Deductible?
Q: If I work out of my home as an independent contractor, can I claim mileage to work sites and back home? Can I deduct trips made to the bank and post office? What if I make business-related trips from my home office and also stop to do personal errands? How do I figure the mileage?
A: Yes, your mileage to work sites and back are business miles that must be supported by written documentation of where you went and how many business miles you traveled. Trips to the bank and post office also qualify as business mileage if documented. Trips for personal errands are ignored. The end result of your records should be business miles for the year (with a backup written log) and total miles driven for the year. To document your total miles driven, take your odometer reading at the beginning and end of the year. The IRS often looks at the odometer reading on auto repair bills to see if your total miles are reasonable.
Kimrobinking -- I think you're a bit confused. It sounds like you're talking about a home office deduction which has nothing to do with mileage. Here's what the IRS says about automobile deductions:
.01 Section 162(a) allows a deduction for the ordinary and necessary expenses a
taxpayer pays or incurs during the taxable year in carrying on any trade or business,
including the cost of operating an automobile to the extent that it is used in a trade or
There are two ways to figure this deduction; one is mileage and one is depreciation. You can't use both. If you didn't and your tax preparer is telling you that you aren't entitled to this deduction, then you're being cheated. Still, I think you're confusing the home office deduction with mileage. And, if you have a studio apartment and one corner is used for an office and it's about 1/8th of the apartment, you may even be able to take the home office deduction. People take mileage from their homes all the time and never have a problem.
Just keep on believing. I did research all week. I said I talked to several Certified Public Accountants. I did not call these tax preparers that put up shop in Walmart. I am upset too. Don't get upset at me. Get upset with the government. I am just the messenger!
I am not a CPA and I am not giving you tax advice. I am simply telling you my understanding, for whatever it may be worth.
You are correct that you cannot legally claim a home office deduction if you have a bed or any other personal item in your home office. To legally claim a home office deduction, the area must be used only for a home office. For example, if you have your personal email on the computer in your home office, you cannot claim the IRS home office expense deduction for your office space. However, you still have a home based business. You just can't deduct an expense item for the square footage used for the office. Of course, you can still deduct all other office expenses which qualify under IRS rules.
Just because you cannot deduct for the home office space does NOT mean that you don't have a home based business. It simply means you are running it out of multiple use space in your home.
Whether or not you deduct an expense item for the square footage of your office has nothing to do with your car expenses for mystery shopping. That is an entirely separate issue. You are based out of your home, and you can deduct mileage from the time you leave until you get back.
Mary Davis Nowell. Based close to Fort Worth. Shopping Interstate 20 east and west, Interstate 35 north and south.
I did not mean a deduction for a home based business. I am talking about a deduction on milage to a mystery shop. I talked to 7 different CPA's in the Houston, TX area. I told each one what I did. They all said the same thing. I hope they are wrong.
Check one more, because the 7 you spoke with are wrong.(or they did not understand your question) Did you have an appointment with all 7 or did you call an office with 7 CPAs in the same office and speak to the receptionist at the front desk? Perhaps the misinformation came from one source.
Make sure they know you are an Independent Contractor and not an employee. Going to your regular place of employment (even if it changes with different office locations) is different when you are a paid employee vs. and Independent Contractor.
And when I was a stock broker/financial planner, many CPAs messed up the capital gains/losses and handling of margin interest, fees for managed accounts and annual fees for IRAs.
Often the answer you get is determined by the way the question is asked.
"I am an Independent Contractor and work out of my home. I have no other place of business such as a regular part time or full time employment. I use my personal car to go visit the sites I must evaluate as well as for other errands related to my Independent Contractor work. I have written mileage records of those trips. Is that mileage deductible for my Independent Contractor business?"
By the way, the IMSC conference had a full session by a tax expert who is also a CPA and an enrolled tax adviser (or whatever the exact term is that the IRS uses; help me here, please, Flash) whose business is almost entirely independent contractors. He specifically explained how to use the mileage deduction correctly if you are solely an independent contractor. His explanation exactly matches that given by Flash and as quoted from the IRS handbook somewhere above. In addition, he explained how the use of the mileage deduction would have to be altered if the independent contract went first from home to a site where she/he worked as an employee, thence to a series of mystery shops, thence back home and/or back to the place of employment.
Neither of these detailed descriptions accompanied by citations from the IRS bulletin in question, matched what the OP was told by the folks that she consulted. There are some very good reasons to make sure that your tax advisor is actually qualified to advise on taxes. A CPA designation, ALONE, is not adequate proof of such qualification.
Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel
Poor customer service? Don't get mad; get video.
Edited 1 time(s). Last edit at 04/15/2012 03:11PM by walesmaven.
Kim, the information in your OP is nothing new. Your take on it is incorrect. My husband could not claim mileage to the office and back because he doesn't work from home. Since my office is in my home, then I can claim it. You need to keep close track of when your miles are made because for the last few years mileage write-off from the first half of the year is different than the second half.
Kim, I used to work for H&R Block. Don't knock them. True, during tax season they hire a lot of part-time preparers whose only training is their 18-week course, but they have a core of full-time tax preparers, and most are Enrolled Agents. People with Enrolled Agent status are the only people who can represent you in a case before the IRS.
Enrolled Agents have to know all parts of tax law. The Enrolled Agent test is an extremely difficult 3-part exam. Miss any part of the parts and you have to retake that part of the exam. After you pass, you have to take 72 hours of classes every 3 years to maintain current on tax law.
A CPA cannot represent you at the IRS unless they are also an Enrolled Agent. So, you shouldn't call just any CPA for tax advice. Don't ask for a CPA who is a "tax expert." Anyone can call themself a tax expert. Ask to speak to an Enrolled Agent. If they don't know what you are talking about, hang up!
No, I'm not an Enrolled Agent. I took several tax courses, but corporation taxes just did me in! But I have been a tax preparer since 1984, and I can tell you what everyone above has been trying to get across to you is spot on. You can take the mileage deduction for your business even if you don't have a qualifying home office.
NOTE: I'm not on the forum every day. If someone comments on my post, I might not reply right away. I've been a shopper since 1991. I've never done any work for a MS company in any other capacity.