actually you have the decimal in the wrong place, 1000 miles at 56 cents per is $560 not $56. But your analysis is correct. The parking and tolls (and part of your car interest, if you have a loan, and part of the property tax you paid as part of your car registration) are deducted in addition to either of the methods, actual expense or standard mileage deduction.

One important thing most people forget to do is write down all their odometer readings on January 1. You need to know how many total miles you drove to come up with the percentages.

If you forgot to write them down, find a repair slip near the end of the year showing the odometer reading and use that to pro-rate to figure what your mileage was on January 1 and December 31.

Example: On February 15 you had an oil change and your odo reading was 56,752 miles. On December 31 your reading was 73,982. Subtract 56752 from 73982. That gives you 17230 miles for 10 1/2 months of the year, which is 1641 per month, so your estimated total miles for the year are 1641x12=19692. Use that for your total miles, and if 5045 of them were business miles your business use percentage is 25.6%.

If you also forget to check at the end of the year, pick a repair slip closest to the end of the year and do the same kind of math -- figure the miles between the two repair dates divided by the time between the two dates and multiply to factor it for a full year.

I don't know what influenced the decision. I handed everything over like normal, she freaked out over my parking expenses, joked with me asking if I was sure they were all business expenses, and I didn't have a boytoy hidden in DC... I answered all her questions, and then she said when it came to filing actual or standard, I'd come out ahead filing actual. She then explained my business use percentage of my car, confused the hell out of me, and... I just figured maybe everything got lumped together once my car itself is considered a business vehicle. I'm an engineer, not an accountant, so I just keep careful records, hand everything over and hope for the best.

The IRS told me directly that you can only deduct mileage from store to store. If for instance, you only had one shop that day, you cannot deduct for mileage.

It has to be between two stores from store A to store B.

This was their 800 number and the agent I spoke with, told me the above information.

I don't think that's right, as your place of business is your home (home office) and you are traveling to conduct business, so the travel is business-related.

Excerpt: Business purpose involves driving from your place of employment to another work site, to meet with a client, or going to a business meeting. Commuting from your home to the office doesn't count as a business purpose. However, if you have an office in your home, then traveling from your home office to meet with a client or conduct business is tax-deductible.

Kevincwasik Wrote:
-------------------------------------------------------
> How about this though. Say I have to drive 30
> miles to get to a personal appointment I have, and
> schedule a shop close by the appointment. Can I
> count that mileage considering its not mileage to
> and from my regular job?


No....

If it's a medical appointment, you can count it as medical mileage.

I was reading through here, and not all this information will stand up in case you get audited.


To be on the safe side, take depreciation on anything purchased for your office over $100. You depreciate computers, you write off printers/cameras if they are under $100.

If the computer/printer/camera is used for personal use, then keep a log of the percentage of time spent using the computer/printer/camera for the business.

It's more economical and advantageous now to just claim the standard deduction for office rather than keep track of all the expenses.

Take a picture of the odometer of your car on January 1 of each year so you have a substantiated mileage record since all digital photos carry a date/time for the photo. If you have a big car (and gas hog) it's more advantageous to keep track of expenses. If you have a smaller, gas saving model, it's more advantageous to take standard mileage.


IRS form 2106 is your friend, particularly on line 7 and also for vehicle expense.

The intent of working as a shopper determines if your work is a "business" or a "hobby". You should show a profit to be a business, but if you don't show a profit, you can still claim the independent contractor business status as long as you can show through records that you are changing your business ways to improve the income.


The term "ordinary and necessary" becomes important in expensing items with reimbursement and the more unusual aspects of mystery shopping. Pub 535....

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

SunnyDays2 Wrote:
-------------------------------------------------------
> The IRS told me directly that you can only deduct
> mileage from store to store. If for instance, you
> only had one shop that day, you cannot deduct for
> mileage.
>
> It has to be between two stores from store A to
> store B.
>
> This was their 800 number and the agent I spoke
> with, told me the above information.

The IRS agent is wrong. You may deduct the mileage from your office (which is usually your home).... and also between shops if necessary.

Publication 946

Your principal place of business is in your home. You can deduct the cost of round-trip transportation between your qualifying home office and your client's or customer's place of business.

StormCloud Wrote:
-------------------------------------------------------
>> Therefore, is any part of the expense of the new
> computer deductible as business expense? Same
> with the new printer we'll be getting?


First, you must keep a log, and it had better be accurate.....

Put a paper calendar next to your computer, keep a record of the time used on the computer for your work, your pleasure, and for your father.

It is probably better to take the standard office expense which was started in 2014, than to go through a depreciation expense and keeping track of everything else in your "office space".

You run into difficulties here because your "office space" is not dedicated to your work, but shared.... again.... keep a log on the calendar for the amount of time in the shared space that you use it for an office to work from.

You would probably be better off getting a tablet where you can do your mystery shopping work from a unit which is dedicated to your work, and usually the added expense for a tablet is $10-20 a month on shared times. The price of tablets has come down substantially, and it would keep from having to maintain all the calendar files.

BBird0701 Wrote:
-------------------------------------------------------
> If it's a medical appointment, you can count it as
> medical mileage.


Actually, I first "liked" your posting.... but in retrospect... again... if there is other activity in relation to the medical appointment, it can cause that mileage to be rejected. I think I read on here someone wrote about the "purpose" of the mileage. Was the mileage for the purpose of a medical appointment, or was it mileage to eat at a great restaurant in the city? Only the taxpayer who files can answer the question honestly if additional miles are warranted.

I never walk on the edge when it comes to taxes. It's much better to keep a clear line in the sand that isn't breached.

Ms. Baker,

I was told to take the square footage of my office space and figure out which percentage of my home (using that square footage) is used for my business. In my case, I have a dedicated home office and also a dedicated garage/attached workshop, which are both business spaces. Neither space is used for anything other than business. I was never told to have a time log of how much time I spend in those spaces.

Was that not correct?

He said personal appointment. I figured personal was personal, so I didn't ask, but then thought again and realized it may be medical.

In that case, the travel to the appointment could be logged as medical miles. Even if he were to do a shop nearby after his appointment, scheduled only because he was already going to be in the area anyway, wouldn't that fall under the intent of traveling to that area in order to go to the appointment? It make more sense to at least be able to count the mileage to the appointment and back as medical mileage, rather than not being counted at all?

Some posters are suggesting a level of complicated "evidence" that is not required by IRS. Let's take that odometer reading, for instance. The IRS is legally obliged to "give great defference" to written, contemporaneous records of mileage. So, if you keep a small notebook iin the car and record each trip's end mileage, and the beginning and end of year mileage, in sequence, , the burden of proving that is wrong would shift to the IRS. So, taking a picture of the odometer would be overkill.

As for "personal trips" there is, in that publication from the IRS, somewhere, a statement that basically says that if you are making a business trip (to do a grocery shop, say) and divert from the route to make a personal trip to your bank, say, you can still count the whole thing as a business trip for tax purposes. Last time I looked, the IRS figured that a "short diversion" might be a couple of miles and back. So, let's say that I know that I want to go to my bank, which is 10 miles straight up Route 50. I find a grocery store assignment that is 8.5 miles straight up Route 5. I do the grocery store assignment on my way to or from my bank, diverting 1.5 miles out of my line of travel to do so. My entire trip became an acceptable business cost. I log it as, "ABC grocery shop, pers bank enroute." I only use the "enroute" for trips where I do not need to split the mileage between personal and business uses.

This does get more complex if you are doing mystery shops while basically on vacation, of course.

Never mind



Edited 1 time(s). Last edit at 09/12/2014 02:01PM by LisaSTL.

Thanks, everyone! This helps me, too!

I have been deducting mileage on tax returns for a variety of reasons for many of the past 35 years. I have never come out ahead using actual expenses, the standard mileage deduction was always better. It depends a lot on the ratio of business to non-business miles and how new your car is. The newer the car, the greater the depreciation. But be careful, when you sell or trade-in the car, you need to pro-rate the trade-in value according to the ratio depreciation you have taken over the years. Yes, it can get complicated. The standard mileage rate is easier, and additional expenses such as tolls and parking always count as business deductions regardless of which method you use. I use MapQuest to calculate miles from point A to point B and I record them in an Excel spreadsheet. At the end of the year, I get the total business miles very easily.

To whomever said that the IRS phone line told you that you can only deduct the distance from Store A to Store B, that is simply wrong. Maybe you asked them the wrong question. On the other hand, there are studies which show that they IRS answers 75% of all phone inquiries incorrectly. Unfortunately, you can't simply decide to do the opposite of what they tell you because while there is only one right answer, there are many, many ways to be wrong.

Personally, I would ask your tax preparers.

The only thing you can do is....

Make sure you have kept accurate records Sorry, the IRS will come after you.

Keep accurate records.