Im self employed working for Instacart. I start the app in the morning and start looking for a job (which usually takes 30-60 mins as my area is oversaturated with shoppers currently) If nothing comes up, i drive around a bit as changing location helps. While driving around, i drop my kid at daycare. So at what point should i start the mile tracker app to record my business miles?
In the afternoon, i do the same. I finish an order, than i start driving around, if nothing comes up until its time to pick kid up from daycare, i pick him up, but i still keep app open, if anything comes in after picking him up, i just take him with me to shop and than we go home.
Another quiestion: i didnt track my miles for the first 2 months i was working as i didnt know its tax deductible. So cant deduct anything from that..But i bought a new iphone right after starting this job as with my old phone i couldnt do this job as it was so slow, i couldnt get any orders (you need fast phone to be able to get batches in an oversaturated area). Can i deduct the purchase of the phone? I use the phone all day while working and than i come home to sleep so dont really use it after work.
***I work as a licensed Realtor on the days i dont do the Instacart. Work from home, self employed, no dedicated office space other than a desk. I bought an ipad mini and pay for mobile data for it as i need to show customers photos of properties/documents etc during showings. Is the ipad purchase and monthly data deductible? How about mileage from my home to showing a house and back home? (If i only show one property) ***
Thank you in advance
Your situation demands 2 separate Schedule Cs be filed - one for your real estate business and one for your driving/delivery business. It is very important to keep detailed records for your mileage and those miles need to be separated between your 2 Schedule C returns. You will have mileage for Instacart, Real Estate, and personal mileage. Any miles spent looking for income (or showing a house) is deductible. Just make sure you don't deduct any mileage twice and never include any trips that include personal activities. In your scenario above, all miles driven while getting to the busy areas and waiting for work are deductible, but the leg of the trip dropping off or picking your child up from daycare would not be included. Personal miles, just like commuting miles, are never deductible. Mileage from showing a house would be deductible as well, but only on the real estate Schedule C.
If possible, you can go back and create a log for the 2 months and deduct the business related miles for that period. Using an app to track your mileage or keeping your own log is very important. The IRS can disallow undocumented expenses so you cannot do too much record keeping….
Dead Miles Are Deductible if You are Seeking Income - Mileage discussion.
When Are Transportation Expenses Deductible? Infographic (see page 12)
As far as your cell phone/tablet and data plan expenses, those can be allocated to each business based on the amount of activity you use them for. You can use any reasonable means to allocate the expense between your businesses. Example - if you use the phone for business 80% of the time, you can deduct 80% of the cost or bill each month. Since you have multiple businesses, make sure you are not duplicating any expense and just like with the mileage, do not deduct any portion of any expense that is considered personal use.
What can I expense or depreciate with the business safe harbor election?