I'm currently employed as WE and will keep this job. I also do some 1099 work seeing providing telehealthcare. I have an opportunity to do this over my lunch break from my W2 position but need a quiet, professional environment from which to do this. I've thought about purchasing a sprinter van for this purpose. What could I deduct? I don't believe I could deduct the mileage given it would be transporting me to and from my primary W2 job, functionally it would be more like a piece of equipment or a mobile office.
Only cost of equipment and services used for your 'gig' job would be deductible. Same as a dedicated cell phone . Goes on your Schedule C.
You can deduct “ordinary and necessary“ expenses for your side gig. Ordinary and necessary expenses can include a vehicle, if a vehicle is required for your side gig. However, both allowable methods for deducting vehicle expenses are based on mileage. And you can’t deduct your normal commute to your W-2 job. So if the only business use of the van is that you drive it to your W-2 job and sit in it on your lunch break and do paperwork for your side gig, you have no allowable deductible expenses for the van. You could potentially deduct computers or printers or other equipment that you installed in the van as business equipment, but you would have no deductible expenses for driving the van back-and-forth to your regular job and sitting in it on your lunch break.
@Opus 17 wrote:However, both allowable methods for deducting vehicle expenses are based on mileage.
I disagree. I see nothing that says that Actual Expenses NEEDS to be prorated based on mileage. While that is definitely the most common and logical way to do it, there is nothing that says that is required. For example, Publication 463 says:
Business and personal use.
If you use your car for both business and personal purposes, you must divide your expenses between business and personal use. You can divide your expense based on the miles driven for each purpose.