Mileage Deduction for a Private Tutor with Part Time Job as well

[McCool]

Here's the situation. I have a part time W2 job (no benefits included) for which I work about 19 hours a week. I also tutor privately at each client's house. 

During the week, I drive to the location of my part time W2 employment. After working there, I often travel direct to a client's house for private tutoring. Then from that client's house I either travel to an additional client or directly home. On weekends, I often travel direct from my house to client 1 and then usually on to a few more clients, before returning home.

My part-time W2 job and my private work are not related besides the fact that both involve tutoring. Can someone please explain if I am able to deduct any mileage from my private tutoring and if so what I would need to do. Also, if this involves claiming a home office exemption, would it make a difference if I am currently renting a room in a house? I do spend quite a bit of time at home, prepping for lessons. 

[rjs]

You cannot deduct mileage for any trip from or to your home. Those trips are commuting, which is not deductible. You can deduct, as a business expense, mileage for trips between work locations - from your W-2 job to a client, or from one client to another.

What you have to do is keep a detailed contemporaneous log of every trip, showing the date, starting point, destination, and mileage. When you prepare your tax return at the end of the year you will have to enter your total mileage for business (the deductible miles), commuting, and personal use. Those three should add up to the total mileage on the car for the year. You do not have to have a home office for this.

You might be able to deduct the mileage for trips between home and a client (but not your W-2 job) if your home qualified as your "principal place of business" for the private tutoring work. But you probably don't meet the requirements for your home to be your principal place of business. First of all, you would have to have a space in your home that is used exclusively for the business. There are exceptions to the exclusive use rule for storage of inventory and running a daycare center, but those don't apply to you.

[McCool]

Thanks for the response. Its doesn't seem all that fair that the IRS does not allow me to claim for mileage to and from my residence - that's my only real expense. So far, I've kept  a diary of the addresses and times of client appointments so I can easily calculate mileage to and from clients. 

There is a spare room in the house that I may be able to dedicate to my tutoring prep. I don't really care about deducting $$ for the home office, but it may be worth it if it allows me to deduct mileage to and from my house? However, if doing so sets off any type of flag for the IRS, I'll just leave things as is! 

[rjs]

The IRS doesn't decide what's deductible, Congress does. The fact that an expense is large is not one of the considerations in determining whether it's deductible.

I wouldn't bother with an office in your home. The IRS takes a hard look at business use of your home, so it's likely that it would be a red flag to some extent. To make your car trips deductible you would have to meet two sets of requirements - business use of your home and principal place of business. They overlap, but they are not the same. There are other requirements besides exclusive use. I just mentioned that because I thought it was likely that you didn't meet that requirement. You can read the requirements for principal place of business in IRS Publication 587, at the following link.

Principal Place of Business

Note that one of the considerations is "the relative importance of the activities performed at each place where you conduct business." Tutoring is obviously performed primarily in the clients' homes, not in your home. Also look at the examples of what are considered administrative or management activities. Preparing lessons does not fit comfortably into that category. Claiming that your home is your principal place of business for tutoring is a stretch. If I were you, I wouldn't push it.

[McCool]

Yes, I would not claim that my home is the principal place of my business. However, there is no doubt that I spend significant time at home prepping for lessons, so I would think that claiming for a home office would be applicable. As previously mentioned, I would do this principally to be able deduct mileage for travel to and from private clients.

But if you think that claiming a home office is likely to raise red flags, then I will leave it.... even though I would think it is completely legitimate to do in my situation.

[Carl]

even though I would think it is completely legitimate to do in my situation

When you get down to brass tacks, what you, I or anyone else "thinks" is irrelevant. It's what you can prove in a court of law in tax court. You would be hard pressed to "prove" that your home is your primary place of business, since the primary income producing activity of your business is not physically conducted in your home.So I would advise leaving the home office alone and not claim it.

However, you can claim mileage when that mileage does not originate from your home.

From home to 1st client - not deductible

From 1st client to 2nd client - deductible

From last client to home - not deductible

The mileage between your home and 1st/last client are what's called "commuting miles" and those miles are not deductible. Exactly the same as the miles from your home to your W-2 job are never deductible.

[McCool]

Carl, thanks for the reply. I was originally under the impression that one could claim for the home office deduction even though my house is not my primary place of business. But, this does not seem to be accurate. Although, it is the only place where I prep for lessons and I spend more time on lesson prep at home than at any single client. In addition, I do private online tutoring 1x/week from home, but obviously this is the exception.

Not being able to claim the home - client mileage hurts as this would be close to 75% of my mileage.I live relatively far from the bulk of my clients.

[McCool]

I also found the following piece of tax code quoted in another thread:

§280(c)(1)(A):  "the term “principal place of business” includes a place of business which is used by the taxpayer for the administrative or management activities of any trade or business of the taxpayer if there is no other fixed location of such trade or business where the taxpayer conducts substantial administrative or management activities of such trade or business."

Under this definition I would think that my home would definitely qualify as my principal place of business. It is the only location where administration and management activities of my private tutoring business takes place - Specifically, I manage scheduling, communicate with clients, plan lessons, log my miles etc. What am I missing as this seems clear-cut to me?

[rjs]

---

@McCool wrote:

I would think that claiming for a home office would be applicable. As previously mentioned, I would do this principally to be able deduct mileage for travel to and from private clients.

---

Claiming an office in your home would not make the mileage to and from your home deductible. The mileage would only be deductible if your home is your principal place of business.

---

@McCool wrote:

I was originally under the impression that one could claim for the home office deduction even though my house is not my primary place of business.

Your original impression was correct. It is possible to claim business use of your home even if it's not your principal place of business.

As I said earlier, business use of your home and principal place of business are two different things, with overlapping but different sets of requirements. In an earlier post I gave you a link to the requirements for principal place of business. Here is a link to the requirements for business use of your home, in IRS Publication 535.

Business use of your home

These definitions are confusing. Read the rules carefully, and watch the ANDs and ORs. To claim business use of your home you have to satisfy both test 1 and test 2. Test 2 has three criteria (a, b, and c), and meeting any one of three criteria satisfies test 2.-

[McCool]

Ridiculously confusing.

Please clarify the following:

1: Without claiming a home office deduction, can I still use the definition of "principal place of business" outlined in this section of the tax code...

Your home office will qualify as your principal place of business if you meet the following requirements.

• You use it exclusively and regularly for administrative or management activities of your trade or business.

• You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.

2: If, based on the above definition, my home is considered my principal place of business, will I be able to deduct mileage from home direct to a client and vice versa? Again, I would still not claim any home office deduction.

[McCool]

Still looking for someone to clarify the above posting.