Employee Miles - Tools carried in vehicle

[ZoomnFinancial]

Long time client is a employee that does tile work. No real office to speak of but wants to take miles to/from home to jobs because he carries the company tools in his car. I'm falling back on the below as to why he could not write off ALL miles but only miles that are to/from the second location of the day, if there was more then one. He says a coworker goes to "The Block" and claims way more miles and has even gotten audited and everything passed.

Am I missing something here or do I stand my ground?

1. You have no regular office and you do not have an office in your home. In this case, the location of your first business contact is considered your office. Transportation expenses between your home and this first contact are nondeductible commuting expenses. Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. Although you cannot deduct the costs of these trips, you can deduct the costs of going from one client or customer to another.

[RitaB]

Hauling tools is nice, but does not make commuting miles deductible. I hear this one a lot. Out of one guy. Every. Year. I guess he thinks I will change my mind.

http://www.irs.gov/publications/p463/ch04.html#en_US_2013_publink100033923

[kcjenkins]

Stand your ground. His coworker may have lied to Block, or may be lying to him. Advise him to try to plan his trips so the first one and the last one are as close to home as possible, but otherwise he's just got to live with the rules as set by Congress and IRS.

[David1980]

The plumber commercials aren't fall off when it comes to block either. There are some very qualified folks I know working at block. There are also folks who have no business preparing a tax return.That someone got away with it, even in an audit, isn't surprising either. Question is do you care about what's allowed or what can be gotten away with?

[ZoomnFinancial]

The plumber commercials aren't fall off when it comes to block either. There are some very qualified folks I know working at block. There are also folks who have no business preparing a tax return.That someone got away with it, even in an audit, isn't surprising either. Question is do you care about what's allowed or what can be gotten away with?

Even though I disagree how the tax $ is spent in our country I am here to uphold the tax law.

[Abby Normal]

Tell him to get a home office. Problem solved. He may already have a home office if he stores inventory at home.

Edit: http://www.irs.gov/publications/p587/ar02.html#en_US_2013_publink1000226297

I'd bet he has some inventory or samples at home. Go for it!

[David1980]

Tell him to get a home office. Problem solved. He may already have a home office if he stores inventory at home.

Edit: http://www.irs.gov/publications/p587/ar02.html#en_US_2013_publink1000226297

I'd bet he has some inventory or samples at home. Go for it!

Using part of the home for storage would give them a home office, true. That wouldn't change the commute miles though - the home office needs to be considered your principal place of business in order to make the transportation expenses deductible. Storing goods would just give you some deductible home office expenses, no miles.

For an employee you also have the for the convenience of the employer test. It's a good idea for the taxpayer to get something in writing from their employer.

[Pacun]

If carrying tools will make the rule, I would always carry 2 screwdrivers from my company and decuct all my miles.

[RitaB]

If carrying tools will make the rule, I would always carry 2 screwdrivers from my company and decuct all my miles.

I would carry a solar calculator. And a mechanical pencil.

[kcjenkins]

From Pub 463

Hauling tools or instruments. Hauling tools or instruments in your car while commuting to and from work does not make your car expenses deductible. However, you can deduct any additional costs you have for hauling tools or instruments (such as for renting a trailer you tow with your car).

Print it for the client. If he does not accept it, give him his stuff and say "goodbye".

[Abby Normal]

Using part of the home for storage would give them a home office, true. That wouldn't change the commute miles though - the home office needs to be considered your principal place of business in order to make the transportation expenses deductible. Storing goods would just give you some deductible home office expenses, no miles.

For an employee you also have the for the convenience of the employer test. It's a good idea for the taxpayer to get something in writing from their employer.

You're right that the inventory loophole doesn't make the mileage deductible, but he should advise the client to establish a home office immediately, because it will qualify as a principal place of business under the administrative rules.

From the link you posted:

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

I think he would qualify under these rules. Maybe not last year but it can be done for this year.

[kcjenkins]

Sorry, JM, but this guy is not self employed, he is an employee, so he's not under that rule. It would work if he was self employed.

[Max W]

Stand your ground. His coworker may have lied to Block, or may be lying to him. Advise him to try to plan his trips so the first one and the last one are as close to home as possible, but otherwise he's just got to live with the rules as set by Congress and IRS.

It is possible that the coworker didn't get audited on the mileage because the mileage claimed did not result in an actual deduction, or a deduction large enough to be audited.. Without other deductions and with the 2% floor, the 'deduction' may have been nothing more than an exercise in filling out 2106 & Sch A, especially so if MFJ.

[Abby Normal]

Sorry, JM, but this guy is not self employed, he is an employee, so he's not under that rule. It would work if he was self employed.

Jeez. RTFQ, right?

[Pacun]

Sorry, JM, but this guy is not self employed, he is an employee, so he's not under that rule. It would work if he was self employed.

He needs to add "for the convenience of the employer" and he should be OK. The employer will be happy to provide that letter since they don't have an office.

[ZoomnFinancial]

I would carry a solar calculator. And a mechanical pencil.

LOL...I had one other client a number of years ago say since he carried his tool bad to/from work (fixed location) he could deduct the miles. I responded with since I carry my mechanical pencil with me to/from work (real job fixed location) I can write off my miles.

[ZoomnFinancial]

It is possible that the coworker didn't get audited on the mileage because the mileage claimed did not result in an actual deduction, or a deduction large enough to be audited.. Without other deductions and with the 2% floor, the 'deduction' may have been nothing more than an exercise in filling out 2106 & Sch A, especially so if MFJ.

For the coworker it was 25k miles per year for the last 10 years (so says client).

Another client lost that I don't care to loose. Sad thing is I prepare 6 other clients that are either family of his or referred t o me from his family members. Oh well the bad egg!