Mileage Deduction For a Private Tutor

[McCool]

I had posted before, but need further resolution.

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. My part-time W2 job and my private work are not related besides the fact that both involve tutoring.

My travel includes driving from my W2 work location to my private clients; driving from client to client; driving direct from home to clients; and from clients back home (I rent/share a house with another person).

I do not intend to claim a home office deduction. I only want to claim mileage. The only IRS documentation that I could find that describes a principal place of business is under the home office deduction section. In this section of code a principal place of business is described as follows:

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.

Well under this definition, 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. 

So, without claiming the home office exemption, would I be able to consider my home as my principal place of business. If so, can I claim for all mileage except for direct two way home -W2 location travel?

[IsabellaG]

I've read the previous answers to your question, and I think you've received some good advice. There is no one size fits all answer to the question of commuting. It all depends on your specific facts and circumstances.

IRC Section 280A  does state "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." 

You know what kind of work you conduct at your home. As @rjs suggested, the use of your home simply for making lesson plans would be a "stretch." Billing, scheduling, marketing, etc would count as administrative/management activities in my view. In the end, you will need to make the determination, and be prepared to defend your choice if you are questioned.

But you don't have to claim a home office deduction in order for your home to qualify as your principal place of business.

[McCool]

Yes, I understand that I don't need to claim a home office deduction in order for my home to qualify as the principal place of my business. As stated, I do not intend to claim for a home office deduction. Hopefully, the specific definition of principal place of business as it relates to a home office deduction also applies to those who do not claim for the home office deduction. If there is an alternate definition, please point it out.

So if my home is considered the principal place of business (based on the referenced IRS code) what mileage is deductible?

[IsabellaG · Accepted solution]

If your home is considered your principal place of business, your mileage between your home and your clients and between your clients to your W-2 job. If your first or last stop of the day is between your W-2 job and your home, it is not deductible. In this whole scenario, I am assuming that you are self-employed and are reporting your income and expenses as a sole proprietor on Schedule C. 

IRS Publication 463

[McCool]

Based on your previous response, I take it there is no alternate definition of "Principal place of Business" as referenced in my prior posts? Again, based on that definition, I have no doubt that my home would be considered my principal place of business which would be great as travel mileage to and from clients is my only major expense.

Last year I just followed the Turbo tax prompts not really knowing exactly what was being submitted.  However, I just took a look at the PDF and the following was submitted: a1040, a 1040 schedule 1, 4, 5, and a schedule C-EZ and SE. 

This year my self employment income should increase and next year hopefully even more. Would I still end up filing the same forms? 

Thanks for the clarification.

[IsabellaG]

No, there is no alternate definition of Principal Place of Business. Again, see the link to Code Section 280A. It's legal verbiage, but that's what all the other publications are based on. You'll probably wind up using the same forms for 2019, depending on how the IRS revises Form 1040. But if you're in the same situation, you'll still file some version of Schedule C for your self-employment.

[McCool]

Isabella, would I need to maintain a dedicated "home office" even if I'm not claiming the home office deduction? Or does it not matter and I can use my regular any pc/desk to do my administrative work related to my private tutoring? 

Also to date I have kept a diary of  the exact dates and times of each private tutoring session. My plan is to go back and use google maps to calculate all the mileage. Is that adequate? I would prefer to use this method than worry about recording odometer mileage.

Thanks

[IsabellaG]

Your home does not have to qualify for the home office deduction for it to qualify as your principal place of business. So you don't have to have one room exclusively used for business in order to deduct your business miles. From an examination point of view, however, I can see that the IRS could be more willing to accept your home as the principal place of business if you did. As I explained before, the whole tax treatment depends on your individual facts and circumstances. See this discussion.

As far as your record-keeping is concerned, the method you are using seems reasonable, because you are keeping a contemporaneous record of where you drove and when, and the business purpose. Calculating the mileage based on this information would be accurate.

[McCool]

The link above and the previous link you posted do not seem to be working. However, you answered my question. Thanks

[IsabellaG · Accepted solution]

Sorry about that.  This is the discussion on this  topic: https://ttlc.intuit.com/community/tax-credits-deductions/discussion/do-i-need-to-claim-a-home-office...

And this is the link to IRC Section 280A: https://www.law.cornell.edu/uscode/text/26/280A

And this is the link to IRS Publication 463: https://www.irs.gov/pub/irs-pdf/p463.pdf

I hope that helps!