Self Employed and W2 Mileage, multiple jobs, same day.

[gxt1]

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;

1. 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).
2. 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)
3. 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)?

--

Side note: How does anybody who has to deal with this on a regular basis stay sane? 

[ThomasM125]

Your home is your tax home as you have described it. However, that is mostly used to determine when you are away from home as it relates to business travel. I believe you are trying to deduct local business mileage for the 1099 job and this is unrelated to mileage associated with business travel.

Unless you can establish that you have an office in your home that is associated with the 1099 job, then the local business mileage as you have described it is likely commuting mileage that is not deductible. 

[gxt1]

You are correct about wanting to deduct local business mileage and after reading Pub 463, my belief is the tax home could either be the home residence or the most significant job, which if the job (pub 463 is ambiguous about the exact criteria) , would in this case likely be the 1099 job, either way traveling from home to the 1099 job would be considered commuting.

But as for the 1099 job to 1st W2 job (2nd trip) and travel from the 1st W2 to 2nd W2 job (3rd same day trip) why would that travel not be deductible when Pub 463 2024 (most current version), page 20 left column explicitly states:

"Two Places of work.

If you work in two places in 1 day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other"   (limited to the direct mileage between the two locations).

Page 19 of Pub 463 has the chart below which also explicitly shows that while travel from home to the main job is never deductible, travel to the 2nd job is Always deductible

The caution is to not use the chart if your home is your principal place of business, which is as I read it, if you actually have a "home office" which most don't, hence "Most employees and self-employed persons can use this chart."

[DianeW777]

Unfortunately any mileage not directly related to your self employment is not deductible.  Mileage going from your self employment to the first W-2 job and between W-2 jobs has no deduction for job related expenses.  They have been disallowed since 2017 with the Tax Cuts and Jobs Act (TCJA) and maintain the same standard under the One Big Beautiful Bill Act (OBBBA). Even though you are looking at the chart you mentioned here.

• After 2017, the Form 2106 will be used by:
  •  Armed Forces reservists, qualified performing artists, 
  • fee-basis state or local government officials, 
  • and employees with impairment-related work expenses. 

Due to the suspension of miscellaneous itemized deductions subject to the 2% floor under section 67(a), employees who don’t fit into one of the listed categories may not use Form 2106.

@gxt1 

[gxt1]

@DianeW777I am just trying to understand the game enough to play it reasonably well,  hard to do if current documentation (which makes the explicit statements referenced) is superseded by a nine year old bill. Thanks for the time to supply references that at least have substance (nice to understand why)!!

Also, I should add to what I wrote below a few hours back, that I hope the Tax Act bill didn't nuke the possibility of having a tax home that is not your residence (if you're self employed and don't have a home office), If it did then my nice logic train below is garbage and I've wasted a bunch more time on Pub 463. It's off to find information on it.

Per your answer, Unfortunately any mileage not directly related to your self employment  is not deductible. 

The self employed deduction seems to be pretty constrained too.  

If you don't have a home office (audit flag) my understanding is.

If your residence is your tax home as defined automatically by meeting all 3 criteria (pub 463 chapter 1), then any travel to the first, single, 1099 job (or any self employment job) from your residence in a single day would be considered commuting.

If the principal job can be considered your tax home, then only the travel to and from the principal job as a self employed person is disallowed. Cleaning houses not all self employment jobs issue 1099's, so I used the verbiage self employment.

It appears that a principal job is the first choice.

Tax Home

Generally, your tax home is your regular place of business.., regardless of where you maintain your family home. If you don't have a regular place of business, or have  more than one: .. your tax home is your main place of business.

If for self employment, one job is a main job (as defined by time and significant income) then from what I read it may be considered "The Tax Home"

If no business main job then you move on to determining if the residence is your tax home.

Factors used to determine tax home. If you don’t have a regular or main place of .. work, use ..three factors to determine where your tax home is.
1. 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)

2. You have living expenses at your main home that you duplicate because your business requires you to be away from that home. (no)
3. 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)
If you satisfy all three.., your tax home is the home where you regularly live. If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances

Alternately it may be the main place of business or work.

Only 2 of 3 for the residence so maybe, but also maybe the main job. So the main job looks to be defensible.

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.

A self employment job that is not temporary (more than 1 year), has significant time and income associated would seem to fit.