Biegalski signed another contract to work for First Tek, this time from Oct. Since this just barely scooted under the one-year mark, First Tek qualified as a temporary workplace for Ms. Her initial work order covered the period from Oct. Biegalski accepted a contract position with First Tek in New Jersey. Biegalski in her appearance before the tax court. The switch from deductible travel to nondeductible commuting happens as soon as the worker knows that the assignment will last more than a year, even if a separate contract covers the extension. If the assignment changes so that the expected duration is more than a year, travel between home and the workplace is now considered commuting and no longer deductible. If the temporary workplace is within that metro area, driving from home to work is considered commuting and is not deductible. If a worker has no principal place of business, travel expenses between home and the workplace are only deductible if the temporary workplace is outside of the metro area where the worker lives. To be deductible, the worker must have a principal place of business, which could be a home office or another regular workplace. Travel expenses between home and a temporary workplace may be deductible. Special rules apply for deducting travel expenses to temporary workplaces.Ī temporary workplace is defined as a place where a work assignment is expected to last less than a year, and actually does last less than a year. The principal place of business can be dicey to define for someone who works outside of the home on a temporary basis, as Deborah Louise Biegalski discovered in a recent tax court case. This includes trips to the post office or to a client’s place of business. Therefore, any business-related travel will be deductible. There is no other location where the worker spends more time on these functions.įor freelancers, remote workers, and others who work from home, their home office is their principal place of business.This location in the home is used regularly and exclusively for performing the business and administrative functions of the business. It’s generally the place where the books and records are kept, and where other administrative functions are performed.Ī home office can be a principal place of business if two criteria are met: What is a principal place of business?Ī principal place of business is the primary location where the work of that business is performed. However, driving between one’s principal place of business and a workplace is a deductible travel expense. Commuting – whether a worker is an independent contractor or an employee – is never deductible. This definition depends crucially on the worker’s principal place of business.ĭriving between home and a worker’s principal place of business is considered commuting. The crux of the matter is defining when a drive is a commute and when it’s a deductible travel expense. Travel can be one of the most problematic areas for many of your self-employed clients. Independent contractors have an incentive to find all the deductions they can, but sometimes there’s a fine line between what’s deductible and what’s not.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |