Mileage reimbursement for independent contractor

[jennifer-a-lebla]

I was just hired as an independent contractor doing local pickups in the city near to me for our home office 1.5 hrs away. I will leave my day job driving to multiple sites within the city and ending at a shipping facility to send the items to our home office. I do not have a centralized office I am reporting to and my pickups may vary day to day as to where they are required. Do I calculate my mileage from my primary job until I reach my home (through all of the site pickups and the shipping facility)? Or do I calculate my mileage from the first site I arrive to until I reach the shipping facility? Thank you!

[TaxGuyBill · Accepted solution]

I would count from your primary job until you reach the shipping facility.

You can count miles from a business location to another business location.  So the trip from your primary job to the first pickup qualifies, but not the trip from the shipping facility to home.

As a side note, for tax purposes you don't get a mileage "reimbursement"; it is a mileage "deduction".  In other words, you don't receive the actual cost of mileage back in refunds, but rather you don't pay taxes on that amount.

Also, be aware that being an Independent Contractor involves you paying self employment tax in addition to income taxes.  Depending on your other income and circumstances, self employment tax is usually about 15.3% of your profit (after your business expenses, such as mileage), in addition to income taxes (Federal is often 15%-25%, plus State taxes).

You may want to fill out a new W-4 at your primary job to have more taxes taken out.

[Hal_Al]

I concur with TaxGuyBill, you count from your primary job until you reach the shipping facility.

If you go to 2 or more job sites in a single day then the additional trips are deductible as a business expense. For example you leave home drive 5 miles to the 1st job (you regular/primary job) then drive 10 miles to the 2nd site and then  3 miles to the shipping facility. At the end of the day you drive 15 miles home. Only the 13 miles between jobs is deductible. The first trip in the morning, from home and the last trip at night back home are considered commuting and are not deductible.