IRS rules for mileage and other things

I am including a link below to publication 334 or the IRS which explains all the rules for independent contractors under the new tax laws. There are always questions regarding mileage and meals and overnight stays etc for mystery shoppers. The mileage info is on page 32 of this publication. From my reading of it we can still use the standard deduction from home to our first job, the mileage between jobs and then the mileage back home. I know it is too late for this tax year but you can bone up and adjust your record keeping accordingly for 2019.

[www.irs.gov]

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Thanks I needed this. I have to decide if I want to set up a room for a home office and if it's worth it. I am now converting my spare bedroom to a home office.

Edited 1 time(s). Last edit at 04/19/2019 08:31PM by johnb974.

Just be aware if you own your home, and take the home office deduction (which includes depreciation), the amount you deduct becomes taxable income when you sell your house.

That's a vast simplification, of course.

And the insane amount of record keeping it requires is rarely worth it. I believe when I owned my house it would have saved me about $100 a year in taxes. Not worth the 10 hours of record keeping it would take.

There are reasons that a body stays in motion
At the moment only demons come to mind

@ceasesmith wrote:

Just be aware if you own your home, and take the home office deduction (which includes depreciation), the amount you deduct becomes taxable income when you sell your house.

That's a vast simplification, of course.

I live in a mobile home that's paid off. I can deduct part of the rent. I could also go the simple route by measuring the sq footage of the room, times $5. No need to keep track of any records.

The Simplified Home Office Deduction

[www.nolo.com]

Do you own your mobile home or rent it?

@Equine24 wrote:

Do you own your mobile home or rent it?

I own the home, but pay space rent.

Something I learned today, if you're on Medicare, you can write off your payments for Parts A,B,C and D. It can be written off on your 1040.

Removed, because I was (GULP!) wrong.

Edited 2 time(s). Last edit at 04/20/2019 03:17PM by ceasesmith.

That's why I said from your 1040.

You'd have a hard time writing off Part A.

It's free.

Actually when I was looking up the rules for miles I came across a list of deductions that independent contractors can take and it included health insurance...not just medicare but any health insurance. I do not mystery shop full time or as my only income so I am not sure it would work for me but those of you who do this for a living probably can. Check the publication though and make sure it is in there. Websites sometimes have all sorts of incorrect information in them. The link is for the IRS so hopefully that is correct.

Sandy, I stand corrected. Thanks for the correction. I have edited my earlier post.

My advice is, still, get a "tax guy".

Cease, what I saw about health insurance was on some random website put out by a legal office so I am not totally sure they were correct. If it is in Pub 334 written by the IRS it is probably correct but I did not check. Also on the list it said you could actually hire one of your kids to do something like data input for you and "pay" them and then deduct the amount you paid them. All these items would need to be double checked with the IRS rules.I personally like to check things myself and not rely on a "tax guy" because even tho I have one and use him they are not always up on every little thing especially if they do not have many customers with this type of tax issue. It is sometimes like a doctor...if you go to a general doctor you expect them to know all there is to know about every specialty and many times they are not familiar with all the nuances of some specialty medical issue...so too with tax preparers if it is not an area they have used before.

For keeping track of miles, I use an Excel spread sheet of all my shops for each day. I than use Google maps to map out my routes and total my miles for each month.

I am trying a new app, Hurdlr. It not only auto-tracks milage, but also expenses and income. It pulls income info from Paypal with no issue. It operates kind of like a milage app combined with Quickbooks. So far I am very impressed.

It can also generate monthly & annual reports, and even file your taxes (or generate your filing info for your tax preparer).

The best part is that it keeps a running tab of your self-employment tax owed, and has a way to input estimated tax payments.

There is a 7-day free trial available. After that a subscription is $60/year, or you can just use the mileage log part for free.

[driver.app.link]

If you use Turbo Tax it will ask for the cost of your health insurance and place it correctly as self-employed health insurance on the Schedule C. You do not have to work full time as an independent contractor to use that. So, turbo Tax is my "tax guy" for such things. Very straightforward.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

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My health insurance costs more than my net earnings from mystery shopping. I do not have other wages/salaries but I do have other sources of income. I will check with my tax guy but I am thinking with a relatively small amt of earnings after deductions from this very part time job of mine adding in health insurance will make me in the negative most years. I don't want to set any red flags in the IRS system by doing that. Anyone out there with net fees of under a few thousands dollars taking off their health insurance on schedule C?

I started reading the relevant IRS publications. There are a lot of things to consider and there are pro-rations for various types of income. I will plug my health care into my TY 2018 Turbo Tax filing and see what happens. If I can subtract a lot, I will file an amended returned. I will try to remember to report back.

@sandyf wrote:

My health insurance costs more than my net earnings from mystery shopping. I do not have other wages/salaries but I do have other sources of income. I will check with my tax guy but I am thinking with a relatively small amt of earnings after deductions from this very part time job of mine adding in health insurance will make me in the negative most years. I don't want to set any red flags in the IRS system by doing that. Anyone out there with net fees of under a few thousands dollars taking off their health insurance on schedule C?

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

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IRS rules for mileage and other things

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