An employee of a bookkeeping firm has to go to a big client's home almost everyday to do some works there. Usually he goes there after work and then goes home directly without returning to the office. It takes 5 miles to go from the office to the client's home and then another 10 miles to go from the client's place to his home. The company only agrees to reimburse him for the mileages which are considered deductible business miles according to the tax law. So how many miles should he be reimbursed each day?
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Mileage reimbursement
5 miles, from the office to the client's home.Originally posted by UnregisteredJiggers, EA -
It depends on how long this employee will be going to this other location.
TTB, page 10-2 shows that if the taxpayer has a regular place of business, then any miles between home and a temporary location are deductible, provided the temporary location is expected to last one year or less.
So if this is an ongoing thing with no expectation to end in a year or less, no mileage is deductible between the second location and home. If this is a temporary thing (one year or less), then in addition to the mileage between the office and this second location, the taxpayer also gets the mileage between this second location and home.Comment
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I don't think the temporary rules apply..
on the same page of TTB 10-2.
Second job: If a taxpayer regularly works a two or more places in one day, whether or not for the same employer, deduct transportation expenses of getting from one to another.
And I think you get between 2nd location and home on days you work at both locations.
DougComment
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The second job category says nothing about deducting mileage from the second job to home. It only says you can deduct mileage from one job to the other, and that on days off from one job, mileage from home to the second job is NOT deductible.
The only place on page 10-2 that mentions being able to deduct mileage from home to a job location is under the temporary work location rules, where the job location is expected to last one year or less. It further says not to use the chart on 10-2 if there is a qualified home office, as that has its own set of rules that would allow mileage from home to another job location.
You can't read something into those rules that is not there.Comment
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no deductible miles
Ummm--he has no deductible miles because he is reimbursed.Comment
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Reimbursed mileage
I thought the original statement said that his company was going to reimburse him for the mileage based on what we determined his deductible mileage was.Originally posted by jainenJiggers, EAComment
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Thanks, Doug. I have a quetsion to your reply.Originally posted by outwest
How do you define 'second job'? You mentioned they could be for the same employer, So does the employee has to receive two different pay checks for the two duties (like one paycheck for his works at the office and then another paycheck for his works done at the big client's home) in order for it to be considered a second job? If not, then what do they need to keep in order to substantiate that the works done at the big client's home is considered a second job?Comment
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Thanks Bees Knees. What about if the company is willing to reimburse the employee even if the miles are not deductible business miles (like the duty is expected to go on for more than one year). Can they still make it fall under an accountable plan so the reimbursement will not be considered income to the employee? If yes, are the company and the employee required to make an agreement for the reimbursement?Originally posted by Bees KneesComment
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Uh Bees...
Direct quote from IRS Pub 463:
TWO PLACES OF WORK. If you work at two places in one day, whether or not
for the same employer, you can deduct the expense of getting from one
workplace to the other. However, if for some personal reason you do not go
directly from one location to the other, you cannot deduct more than the
amount it would have cost you to go directly from the first location to
the second.
I'm not reading in what's not there, transportation between jobs is deductible irregardless of the length of assignment.
Why would argue with the IRS when they say you can deduct something?
DougComment
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Publication 463 gives more details..
but you just need two different locations.
Quote:
TWO PLACES OF WORK. If you work at two places in one day, whether or not
for the same employer, you can deduct the expense of getting from one
workplace to the other. However, if for some personal reason you do not go
directly from one location to the other, you cannot deduct more than the
amount it would have cost you to go directly from the first location to
the second.
DougComment
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Doug,
What is your point? Where did I say you cannot deduct mileage from one job to the other?
And how do you get deductible commuting miles out of that statement?However, if for some personal reason you do not go
directly from one location to the other, you cannot deduct more than the
amount it would have cost you to go directly from the first location to
the second.
That means what it says. If you don't go directly from one job to the other (like taking a side trip down town to do some shopping), you can't deduct more than the miles you would have driven had you driven directly from one job to the other.Comment
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An accountable plan can only reimburse expenses that would otherwise be deductible by the one incurring the expense. So if non-deductible commuting miles are being reimbursed, it is not an accountable plan, and the reimbursement would be included in the employee's income as taxable wages.Originally posted by UnregisteredComment
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Am I missing something?
The way I read it, the employee is going to one of his employer's client's to do some work for his employer. Not a second job, just doing something for his employer. Mileage to this client is a reimbursable/deductible expense. When I leave my office at 5:00 to deliver outgoing mail to the post office on the way home, I deduct my mileage from my office to the post office. From the post office to home is commuting.Jiggers, EAComment
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Bees...
Quote from Bees:
It depends on how long this employee will be going to this other location.
TTB, page 10-2 shows that if the taxpayer has a regular place of business, then any miles between home and a temporary location are deductible, provided the temporary location is expected to last one year or less.
End Quote..
Bees, I was just trying to point out that the one year or less rule does not apply for job location to job location transportation in this situation. Sorry, but the quote above is yours and I respectfully disagree with it.
What tweaks my interest is that the pub implies to me that the mileage home from the 2nd job is also deductable. Otherwise, why would the IRS say that on the days you don't go to the main job, the mileage home from the 2nd job is not deductable? Kind of implies that on the days you DO go the the main job also, the mileage home from the 2nd is deductable. That surprises me, but when you think of it, a return trip to the main office would be deductable. Or if the 2nd location took you further from home than the main office, maybe it seems that some of the extra mileage ought to be deductable.
Not trying to make something up, just exploring the possibilities for our clients. What are your thoughts on that rather odd statement about mileage home?
DougComment
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