Sunday, February 24, 2008

Transportation expense from job to home office

Thank you, June, for the great information. I've downloaded your business expense list, spent lots of time reading your blog, ordered your book from Amazon, and I still have a question that I probably should know the answer to, but I don't so here go:

I'm an employee and an indie. I know that if I work a couple of hours in the morning (at my home office) before I go to my regular job I can claim that expense (going from workplace to workplace).

What about in the afternoon? When I go from my regular workplace to my home office to do more work? Can I claim that expense?

Thanks, Gary

You are welcome, Gary.

A while ago I spoke with the IRS on just this situation. While that IRS researcher agreed with me that the going and coming from one workplace to another was business transportation and therefore the cost would be a business deduction she could not give me an opinion on whether it should be an expense against the indie business income or against the employee's job.

If I were making the decision I would look at the entire return including how much income from the indie venture versus how much from the job. Depending on the transportation expense, perhaps I'd split the expense proportionate to income.


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D. East said...

What exactly do you mean by taking
"an expense against the indie business income or against the employee's job?" Are you talking about an indie business expense against business income versus a job expense deduction?

How would you exactly "split the expense proportionate to income?" Would you take half of the mileage as a business expense and the other half as a job expense deduction?

Your site is a GODSEND! Thank you so much.

June Walker said...

Dear d. east,

If you are self-employed and buy supplies for your indie business, that is "an expense against the indie business income."

If you are an employee and your work required you to purchase a uniform that would be an expense "against the employee's job?"

Proportionate to income means that if your net self-employed income were 1/2 of your salary you would take 1/3 of your mileage against your indie business and 2/3 against your salaried income.

The splits confuse you?
If net indie income = $10,000
W-2 income = $20,000
then total income = $30,000
and so
indie income = 1/3 of your total
W-2 income = 2/3 of your total.