Can some one help with home office and business miles questions?

[vrgr79wild]

I have a room in my house where I repair items that I later sell at a flea market. I also use this room to store these items and other items that I sell at the flea market.  I use this room almost every day for those purposes; and this room is not used for anything else. I have some questions:

1) Can this room be considered a home office so that it can be used to show a home business expense on schedule C?

2) When I go to the flea market, two to four times a week, I leave from my home. Can the mileage to and from there be ‘business miles’ that can be deducted?

3) 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. Some of these shops are just off the route I take to the flea market; each maybe only 1/ 4 to 1/ 2 a mile total. Other shops are further away, ie past, the flea market. Would the mileage to these ‘further away’ shops be ‘business miles’?

PS: I have a construction job, with a W-2, where most of my income comes from; but if the weather is bad I do not work.

This is new schedules and calculations for me.

Thanks for your help.

[AnnetteB6 · Accepted solution]

Yes, the space used in your home to store and repair items for resale can be considered a home office.  It must be used regularly and exclusively as your principal place of business. 

These terms has some specific definitions as related to the home office.  The following articles will give you more information and examples to be sure that your situation does qualify:

Can I take the home office deduction?

What qualifies as "principal place of business" for the home office deduction?

As for the mileage, each situation you described would be considered business miles.  Be sure to keep a log documenting the business miles driven as well as a record of the total miles driven for the year.  Both of these numbers will be needed in your return whether claiming the standard mileage rate or actual expenses.

[vrgr79wild]

Thanks a lot for your great answers!

If you could help me some more, I would appreciate answers to these follow up questions:

A) Looking at line 44 a-c on Schedule C: Because the miles used on this schedule C relate ONLY to the flea market business and the starting & ending point are my home then the commuting miles would be zero? And 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?

B) If I did not establish that work room as a ‘home office’ would that affect whether or not the trips I listed in questions 2 & 3, in my initial post, would still be business miles?

Also, would the values for line 44 a-c  be the same as in my above example?

Regards

[MaryK4]

Yes, the IRS requires you to keep track of business, commuting and personal miles to get the total.  Even if you do not have a home office at your residence, you could still deduct the business miles because they are deductible Transportation Expenses. 

See IRS Publication 463- Transportation