Mileage for Taxes

Is it correct that we can count mileage from home to shop, and to the next shop, etc, and then home again as business expense?
So if I do an out of town shop I can claim all that mileage?

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If "out of town" means the town that is 10 miles away, the answer is probably yes. But if "out of town" means that you are going to drive 1000 miles on vacation, do a shop while there, and claim a mileage deduction of 2000 miles x $0.655 per miles, the answer is no. I occasionally do a shop where I lose money due to mileage, but it is usually because I hoped to pick up other shops to make the entire route profitable and those shops did not materialize or maybe they were canceled. Does this explanation help?

@nellybean212 wrote:

Is it correct that we can count mileage from home to shop, and to the next shop, etc, and then home again as business expense?
So if I do an out of town shop I can claim all that mileage?

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

Edited 1 time(s). Last edit at 03/27/2023 03:34PM by myst4au.

@myst4au wrote:

If "out of town" means the town that is 10 miles away, the answer is probably yes. But if "out of town" means that you are going to drive 1000 miles on vacation, do a shop while there, and claim a mileage deduction of 2000 miles x $0.655 per miles, the answer is no. I occasionally do a shop where I lose money due to mileage, but it is usually because I hoped to pick up other shops to make the entire route profitable and those shops did not materialize or maybe they were canceled. Does this explanation help?
@nellybean212 wrote:

Is it correct that we can count mileage from home to shop, and to the next shop, etc, and then home again as business expense?
So if I do an out of town shop I can claim all that mileage?

The answer is get a good cpa.
Most of us know the answer, but there are so many grey areas (like the one you used as an example) that no one should take tax advice from an internet forum.

I've have wondered about this at times. What if you made less than $500 and did not receive a 1099 form, do you still claim the mileage? Also, do you use a form or spreadsheet to keep track of mileage if audited?

It doesn't matter if you get a 1099. You should still report the income and you should track your mileage.

The 1099 form is irrelevant. You received $500 of revenue, and that $500 must be reported on your tax return. Since you are of course reporting the revenue, you are entitled to deduct the mileage cost.

I use an Excel spreadsheet to track shops, including the revenue (fees and reimbursements) and expenses (mileage is just one expense).

@bgibson wrote:

I've have wondered about this at times. What if you made less than $500 and did not receive a 1099 form, do you still claim the mileage? Also, do you use a form or spreadsheet to keep track of mileage if audited?

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

Regarding taking a mileage deduction if you do a shop or two while you're on vacation: You can deduct expenses and mileage for that part of your vacation that was solely dedicated to business. So if you do a restaurant shop that's 15 miles from your hotel, you can deduct 30 miles r/t if you don't stop to do sightseeing/touristy things on the way there or the way back.

If you're doing shops for which you start from home, but go out of the way to do personal errands, I think you deduct those miles from your total mileage to come up with what you drove only for shops. But definitely the person to ask about both of these, and how you document it, is a tax professional.

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.

Your home is usually considered your work headquarters, so yes, you start tracking mileage from home and end at home. When you mix shops with personal travel, it is different, as others have said.

Something I just discovered about mileage. .For schedule C type jobs you cannot use the per mile deduction unless the car is registered to you or a spouse. In my case my adult daughter has been using my car so she needs to keep much better records in future so she can deduct actual costs such as gas, repairs, insurance etc. and maintenance expenses for the year. I do not know if the IRS have a way of checking who the car belongs to but that is the law with very few exceptions.

The mileage rate includes direct expenses such as gas, tires, repairs, etc. It definitely requires that you be the owner of the car.

@sandyf wrote:

Something I just discovered about mileage. .For schedule C type jobs you cannot use the per mile deduction unless the car is registered to you or a spouse. In my case my adult daughter has been using my car so she needs to keep much better records in future so she can deduct actual costs such as gas, repairs, insurance etc. and maintenance expenses for the year. I do not know if the IRS have a way of checking who the car belongs to but that is the law with very few exceptions.

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

@myst4au wrote:

The mileage rate includes direct expenses such as gas, tires, repairs, etc. It definitely requires that you be the owner of the car.

But you can opt to deduct direct expenses instead of mileage, although that's usually best only when you do a boatload of traveling for work purposes. But I'm pretty sure you still have to be the registered owner.

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.

Don't forget there were two mileage rates last year- 58.5/mi through 6-30 and 62.5 from 7-1 to 12-31.

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