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Self Employed and W2 Mileage, multiple jobs, same day.
I've read through a number of posts and IRS pub 463 and for this case it's still muddy waters to me.
Here's the substance.
Jim cleans houses as a W2 employee for a business and Jim also has one side job getting paid as a 1099-NEC employee, filing Sched C.
In his his W2 employment Jim travels from home, not an office, no home office by the IRS definition of a home office, a regular place in the home set aside used for business. For his W2 employment he cleans multiples house per day.
One day each week Jim travels from home to clean his 1099 location and then travels to 2 other jobs on the same day for his W2 employer.
Regardless of not having a "home office", Pub 463 wants to determine a tax home
The criteria for determining if your home is you tax home in that pub is;
- You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. (Yes, I am taking area to mean local area not actual home).
- You have living expenses at your main home that you duplicate because your business requires you to be away from that home. (No, Jim doesn't travel out of the Metropolitan are)
- You haven’t abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging (Yes, Jim and his wife live in their home)
So, as I read it, Jim has met two of the 3 criteria for his home residence being his tax home.
Pun 463: . If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances.
Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located. If you don’t have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live.
Main place of business or work.
If you have more than one place of work, consider the following when determining which one is your main place of business or work.
- The total time you ordinarily spend in each place.
- The level of your business activity in each place.
- Whether your income from each place is significant or insignificant.
Here's the muddy.
Jim has satisfied 2 of 3 criteria for his tax home being his residence So maybe his tax home is his home.
Or Jim's tax home might be his single highest source of income from any single location single location, meaning his 1099 job, about 20% of his total income and he has done the 1099 job for more than one year (so not considered temporary).
Regardless of not traveling daily to an office maybe Jim's tax home (to my thinking) may be the location of the W2 business. If Jim gets paid by the hour regardless of what W2 house he's cleaning, then 80% of his income is derived from the W2 locations doing both temporary (less than one year jobs) and jobs lasting more than one year. Would that be correct? And would it change if in his W2 employment that Jim gets paid by the job and not by the hour, in that case, even if he makes less money but spends more time at one of his W2 jobs, Jim's tax home might be that specific W2 Job?
More Muddy about how the mileage deduction is take.
1. Take the single day where Jim travels first to his 1099 Job and then onto his 2 other W2 jobs. And lets consider that Jim's tax home is his residence. His first trip from home to the 1099 job would not be mileage deductible because he is traveling from his tax home.
Trip 2 would be mileage deductible because pub 463 says if you do more than 1 job in a single days regardless of employer, the travel cost between jobs is deductible. Since the origin of travel for trip 2 is from his 1099 Sched C job, my belief would be that the mileage from the 1099 job to the 1st W2 job would be schedule C deductible?
Trip 3 from the 1st from the first to the 2nd W2 job, that mileage is also deductible but can it still be taken as a continuation of his 1099 job and deducted from schedule C income?
Or does the trip 3 mileage just become another itemized deduction to take against his regular income (which does Jim no good because he takes the standard deduction)?
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Side note: How does anybody who has to deal with this on a regular basis stay sane?