I am trying to make sure that I understand what ‘business miles’ are, if they apply to my situations described below, and how to document them in a way that the IRS needs. I will be using Schedule C to report the profit or loss from this business.
At my house I make or repair items that I later sell at a large formal flea market.
1) When I go to the flea market, several times a week, I leave from my home. Can the mileage to and from the flea market be ‘business miles’ that can be deducted?
2) Some days, either before or after going to the flea market, I stop at resale stores, like Goodwill, to buy items to fix up and resell. On these days can the mileage be deducted as 'business miles'?
3) I keep track of the trip mileage as follows: For the starting miles, I write down the odometer mileage on a calendar before I leave the house. For the ending miles, I write down the odometer miles when I return home. I also write down each place I stop, i.e. the resale shops, flea market, etc. Will this be the correct way to document the miles?
4) Looking at line 44 a-c on Schedule C: The miles used on this schedule C relate ONLY to the flea market business. Because the starting & ending points for my trips are my home the commuting miles would be zero. Correct?
The business miles will be the yearly total of the miles as done in 3 above.
The result of adding the business, commuting, and other miles should equal the total miles for that vehicle for the year.
For example: if the business miles are 1,000 and the total miles for the year for the vehicle are 15,000 then show the business miles as 1,000, commuting miles as zero, and the other miles as 14,000. Correct?
Thanks for your help.
Assuming that you do not have a home office, Commuting miles are those from home to your first place of business and from your last place of business back to home. Business miles are from one place of business to another place of business. So from fea market to the store for business shopping are business miles. Mileage to the flea market is commuting and not deductible.
Thanks for your reply. I have some comments & questions:
a) When I got my business license from my state, they said to use my home address as the address of my business instead of the flea market address.
There is one room in my house where I do most of my administrative work, i.e. recording sales & cost receipts, calculating trip mileage, etc. I consider this room as my office, but I do not think the IRS would call it a ‘home office’. Does this change your reply?
b) For the trips I described in number ( 2 ) of my original post : Starting from my home I stop at one or more resale shops to buy items to repair; I may also stop at a hardware store to buy repair parts. Eventually I end up at my flea market booth. When I leave, I may or may not stop at these stores before I finally end up back home. Does this change your reply?
c) Please comment on items 3 & 4 in my original post.
Thanks again for your comments.
To be a home office the space has to be used exclusively and regularly for business. If it qualifies then all the mileage you described is business mileage. If not, you would track the miles from the market to the store and back to the market or to another store. But miles from home to the first place and miles from the last place of business to home is commuting and not deductible. Any reasonable way to log those miles would be acceptable.
You are correct about reporting as you described in #4. The only amount that affects your tax liability is the number of business miles.