IRS Tax Deduction Q:Is following the code unlawful?

I understand that you are able to deduct the mileage for traveling from your first job to your second. What if the second job was less than 20 feet from your home? I do get taxes taken out and it is a normal job. Will the IRS frown on this because its not within the “spirt” of the law? I have not taken any deductions for milage for the last three years, but HR block suggested that I take advantage of this. It would be in the range of a 1500 tax deduction. Any info is appreciated

I would be inclined to take my tax consultant’s advice.

Less than 20 feet? But not actually on your property? If your second job is actually at home, I doubt the IRS would allow the deduction. It would be too easy to claim a second job at home just for the purposes of taking the deduction. If it is a bona fide job for another employer that is not actually on your property then it sounds totally legitimate.

Just be prepared to defend if challenged. Become familiar with what support Block would provide if you were audited or worse.

Legally, the spirit of the law means diddly-squat with respect to the tax law: all that counts is the letter.

IANATaxProfessional, but here’s what the IRS says:

You hint that you’ve been working these two jobs for some time. If this is the case, remember that you can amend past returns for a few years afterwards. (Three years from the date you filed a return, or two years from when you paid the tax, whichever is longer. See these IRS pages for more info.

So if you’re on solid ground here, you may be looking at $4500 or $6000 rather than just $1500. If you had both jobs as long ago as 1999, check the filing date on your 1999 return ASAP, as you’re probably fast approaching the deadline on that one.

Here’s some more IRS examples related to this question.

Heres a lil followup:
The second job is not in my house BUT it is on my property. I own a duplex, and I am the in-home care giver for the people in the front unit while I live in the back. It seems like splitting hairs to me…thats why I have not taken the deduction.

I’d say it’s up to you, but in your shoes, I’d spring for 15 minutes of a real tax attorney’s time, even if it costs you a few hundred bucks. After all, you may have several thousand coming to you, but you want to make sure you’re playing by the rules.

H&R Block is the tax preparation field’s answer to McDonalds’, and the level of expertise of individual preparers there varies considerably, so you really need a more dependable second opinion.

Just remember, there’s absolutely nothing wrong, in the eyes of the law, with a taxpayer’s taking every last deduction he’s legally entitled to. (IIRC, a Supreme Court justice said exactly that in an opinion, sometime back in the middle of the last century.)

Interesting case here:

Services rendered at home by a nurse to her doctor-husband were not sufficient to constitute a trade or business. Hence, the costs of traveling between her home and a hospital where she was employed were nondeductible commuting costs.

F.B. Matteson, CA-8, 75-1 USTC ¶9335, 514 F2d 43.

IMO, if the services in question in the case above were sufficient enough to constitute a trade or business, then it appears the deduction would have been allowed. In other searches of tax cases on this point, the IRS is winning when it refuses to grant this deduction to those whose second job is in their residence. As you say, you second job is in the duplex next door. IMO, you may own this portion of the building, but it is not your residence.

I believe the IRS would challenge this deduction based on the circumstances, but I think you have strong grounds to take it if indeed you are being compensated and the work is being performed in another person’s residence. Keep good documentation and good luck.

You could own the office building where you work, but that doesn’t make it your residence and it would count for this rule. So I think that’s just a red herring and you can ignore that fact.

Also feel the need to point out that this may be a moot issue for you; I just mentioned in a subsequent thread that such unreimbursed mileage, should you choose to attempt to take the deduction [I wouldn’t, FWIW] will only be deductible if:

(1) you are itemizing deductions (if you are making mortgage payments on your duplex you are probably itemizing) AND
(2) this mileage plus a few other minor items like tax preparation fees adds up to more than 2% of your income, [the whole ball of wax will only benefit you to the extent these items exceed the 2%… so this will not give you as big of a tax benefit as you might think]; if it doesn’t, the whole mileage deduction thing won’t help you at all so don’t sweat it or lose sleep over the judgement call thing. (Most people don’t meet this 2% “floor”, although with a number such as $1500 like you mentioned it’s just possible you may… YMMV… tee hee)

Of course, consult your tax advisor for more details.

drpepper - I hadn’t realized the mileage was in that 2% catchall category. I’ve never come close to topping that 2%, so point well taken. Still, the $1500 that Cleric estimates is 2% of $75K, so if his recent AGIs have run less than that, he may still be getting something. But probably not enough to justify dropping a few hundred bucks on a consultation with a tax lawyer.

As a follow-up:
I ended up not taking the deduction. I thought it was in the “grey” area and also did not feel right about You all (taxpayers) to help me get home from work. So I paid 2500 in taxes for the year 2002…YAY Bush!