Tax Prep by Deb Posted April 9, 2008 Report Share Posted April 9, 2008 Here goes! I personally think my client was nuts to agree with this, but!!!!! My client works as a W-2 employee for a company. She has to commute about 30 miles to work each day. My clien'ts employer has asked her to take on a second job with a spin off company and pays her as a non employee and has issued a 1099 for the amount. The amount on the 1099 is more than the wages paid on her W-2 which leads me to believe that it would be her main job. It is my understanding that she performs her work at the same office. Her only real deductions against the 1099 as I see it is really nothing! She was sure that she could deduct her vehicle from home to office, but I don't see it that way. Am I missing something? She doesn't work for anyone else but this company and it's spin off. I do not believe she works from home at all, therefore I really do not see any of her mileage as being deductible. Why she would agree to this is beyond me. Again the way I see it you are either an employee or your not, they seem to want to have it both ways! Any thoughts would be greatly appreciated! Deb! Quote Link to comment Share on other sites More sharing options...
JohnH Posted April 9, 2008 Report Share Posted April 9, 2008 Well, she may be nuts or she may not. After all, if the employer insists that she do this, then what's the chance they will find someone else to do both jobs if she refuses? The employer is probably incorrect in treating it this way, but she isn't responsible for the incorrect treatment. Of course, she could always file the new form for this sort of thing, provided she doesn't value her job very much. As far as the mileage is concerned, I think you're exactly right. It's commuting expense. I have a situation where a retired employee is doing the same job she was doing while an employee and being treated as an independent contractor, but they're paying her 25% more than before. Even after the 7-1/2% net S/E tax haircut, she's still thousands of dollars ahead. Problem is, her boss is telling her she can claim mileage because she's self-employed, while I'm saying it's commuting expense. Several others in the dept are claiming mileage based on the boss's recommendation, and of course they're "getting away with it" because nobody's been audited. Fortunately my client listens to me, but it's an uphill battle. She asks me about this every year "just to be sure nothing has changed." I'm expecting that when the boss retires she will become a hairstylist or mechanic - she already has the requisite tax consutling skills necessary for those two professions. Quote Link to comment Share on other sites More sharing options...
jasdlm Posted April 10, 2008 Report Share Posted April 10, 2008 If she has cash, she could max her SEP . . . won't help with SE, but would let her keep more for herself. Quote Link to comment Share on other sites More sharing options...
Julie Posted April 10, 2008 Report Share Posted April 10, 2008 Well, if she goes from one job to the other, that would be deductible mileage.... Quote Link to comment Share on other sites More sharing options...
Tax Prep by Deb Posted April 10, 2008 Author Report Share Posted April 10, 2008 Well, if she goes from one job to the other, that would be deductible mileage.... Julie, It's my understanding that she does her work from the exact same desk. She just does to different jobs, one for which she is paid as an employee and the other for which she is an independent contractor. Therefore I believe all her mileage would be commuting mileage. Deb! Quote Link to comment Share on other sites More sharing options...
jklcpa Posted April 10, 2008 Report Share Posted April 10, 2008 Deb, you're right, no mileage deduction because it's all commuting. Quote Link to comment Share on other sites More sharing options...
Ray in Ohio Posted April 10, 2008 Report Share Posted April 10, 2008 I think I would do it this way....... Client goes to her W2 job. Does the required work for the day that needs done for that job. Then she gets in the car and drives home, turns around and drives back to her self-employed job. When she's done with that she drives back home again. Now that there milage is deductable, I don't care what the professional tax preaparers say. A guy on the bus has always done it this way and it works. Quote Link to comment Share on other sites More sharing options...
GeneInAlabama Posted April 10, 2008 Report Share Posted April 10, 2008 I think you have to go DIRECTLY from the first job to the second job to count the mileage. Quote Link to comment Share on other sites More sharing options...
GeneInAlabama Posted April 10, 2008 Report Share Posted April 10, 2008 I think if I were the employee, I would tell my boss that I would do the contract job from my home. That would change things. Quote Link to comment Share on other sites More sharing options...
jainen Posted April 10, 2008 Report Share Posted April 10, 2008 >>I would tell my boss... << I would tell my boss, thanks. He more than doubled her pay and gave her more freedom to work on her own, while still having full access to the office resources. I wouldn't mess up that sweet deal by whining about the commute. Quote Link to comment Share on other sites More sharing options...
zeke Posted April 10, 2008 Report Share Posted April 10, 2008 do not pass GO & do not collect $200. Quote Link to comment Share on other sites More sharing options...
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