Discussion:Construction workers - deductible mileage

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Discussion Forum Index --> Tax Questions --> Construction workers - deductible mileage


JoAnn (talk|edits) said:

19 January 2007
A construction worker goes directly to the job site each day and home again each night. The shop for the company he works for is near his home, but very seldom goes to the shop, but directly the job site. Is all the travel to the job site deductible on Sch A subject to 2% of AGI?

Kevinh5 (talk|edits) said:

19 January 2007
Does he have a regular place of work, and this could qualify as a temporary location?

Does he need to transport heavy/valuable tools back & forth?

Sandysea (talk|edits) said:

19 January 2007
Most construction workers work on several job sites during the year....I take it as a Sch A deduction because their place of commuting...the office of the construction company is not the same as the place that they typically work. :)

Kevinh5 (talk|edits) said:

19 January 2007
Be careful if they have no regular place of work - this might always be considered commuting

Dennis (talk|edits) said:

19 January 2007
Mileage would be home to job site or shop to job site, whichever is less.

Death&Taxes (talk|edits) said:

19 January 2007
"Hauling tools or instruments in your car while commuting too and from work does not make your car expenses deductible" Publication 463 "Getting from your home to a temporary workplace when you have one or more regular places of work" is deductible....same source. What Kevin notes about a regular place of work is the key.


Joann Doe, could you fill in your profile?


Dennis (talk|edits) said:

19 January 2007
And why, pray tell, is not the company shop his regular place of work?♫

Kevinh5 (talk|edits) said:

19 January 2007
Wasn't there a tax court case that showed that the contractor who was working in a bad part of town needed to remove all his tools every night or they would get stolen and therefore got to deduct mileage? That is what I was referring to - a case by case analysis

Death&Taxes (talk|edits) said:

19 January 2007
"A construction worker goes directly to the job site each day and home again each night" Doesn't sound like he goes to the shop, does it?

Death&Taxes (talk|edits) said:

19 January 2007
"A construction worker goes directly to the job site each day and home again each night" Doesn't sound like he goes to the shop, does it?

Sandysea (talk|edits) said:

19 January 2007
Hmmmm....if these "employees" use their vehicles to carry tools and to work on construction sites, they generally (at least those I know) have to go to the office routinely to pick up paychecks, pick up supplies, meetings and weekend work. How can they be "commuting" if the job site changes daily or even weekly?

Sandysea (talk|edits) said:

19 January 2007
D&T; no they don't go to the shop daily...but as well, here in FL the construction industry is booming....people are on one job site for 2 days, then another for one day, then another. The majority of my clients are construction related....NONE of them work at the same job site every day...they drive 30 to 40 miles a day, many times different directions...N/S/E/W. How is this commuting?

Death&Taxes (talk|edits) said:

19 January 2007
Once again, "He very seldom goes to the shop." Of course, then the client will say, "but I'll go if you want me to." The question comes down to, do they have 'one or more regular places of work?' I do have three union electricians; now their work is slightly different in that they are often on the same job for weeks, but these guys talk with their buddies about taxes and none have ever said 'my buddy Joe is doing this.' That means little but that other people in my area view them as not having a regular place of work.

Kevinh5 (talk|edits) said:

19 January 2007
Publication 463 page 14 says if you have no regular place of work but travel to different locations within the same metropolitan area this is commuting.

Dennis (talk|edits) said:

19 January 2007
Right. He very seldom goes to the shop, he just goes where his boss tells him to go. Give me a break. This is not like a union guy who changes employers with job sites.

Sandysea (talk|edits) said:

19 January 2007
Well then my clients are screwed...and by me no less!! They travel within the confines of 3 counties....now granted with the congestive traffic, they may have to drive 2 hours in the afternoon and one in the morning...no reimbursement for mileage from the employer...you are SOL buddy!!

If the employer requests it, the poor slobs have to go to the shop for meetings and have to cut out early on Friday to collect paychecks...if there is no work and they want to keep them at 40+ hours, they drive to the shop to clean....

Unequitable in my opinion :)

There are usually 5 or 6 homes going up at the same time and they bounce back and forth within the tri county radius....doesn't seem quite fair

Kevinh5 (talk|edits) said:

19 January 2007
boo hoo, sob sob. Isn't that what we tell our clients who cry "taxes aren't fair"?


Whoever said they were supposed to be fair? They're supposed to raise revenue to run the government.

Sandysea (talk|edits) said:

19 January 2007
OK TIM...now is the time for the xxoo...hehe

Fair, no...but equitable, yes????

Done for tonight; need to get some sleep or I will be more cranky tomorrow :)

Death&Taxes (talk|edits) said:

19 January 2007
Sandy, but during the day the drives are deductible so if they begin the day at Alligator Estates and then on to Hurricane Haven, then hit Home Depot for the boss to pick up brads and back to the shop to fill in forms, that works.

Kevinh5 (talk|edits) said:

19 January 2007
Brad has his own truck.

Death&Taxes (talk|edits) said:

20 January 2007
Make it pavers then. Is it just in Jersey and the NYC area they are called 'pavers?'

Kevinh5 (talk|edits) said:

20 January 2007
This is another thread where the answerers are more interested than the questioner.

Kevinh5 (talk|edits) said:

20 January 2007
Hey, when did it turn the 20th of January?

Tdoyle (talk|edits) said:

January 20, 2007
The date used over on the right of each post in the discussions uses UTC. You can always click on the history tab at the top of a page to view the exact day and time and edit was made... and that is localized to your own timezone (provided you set that in your preferences).

- Tim Doyle, TaxAlmanac Moderator - Talk to me 18:08, 19 January 2007 (CST)

JoAnn (talk|edits) said:

20 January 2007
Hi, this JoAnn. I have some more details on my construction worker. He worked at 5 job sites during the year, so they are at each job site approximately 2 months each. He carries his own tools to fix his machine to the job site each day. There is a safety meeting each Friday at the job site. The job sites are 30- 75 miles from the taxpayer's home, ussually. His paychecks are mailed to him. And..........of course all his buddies that he works with take the milage deduction. Peer pressure!!!

JoAnn (talk|edits) said:

20 January 2007
One more thing how do you edit your profile and save it. I edited the profile about 6 times and it still reverts back to the generic on. How do you save the thing?!!!!

JoAnn

Kevinh5 (talk|edits) said:

20 January 2007
hit the "save page" button after editing your profile

Tdoyle (talk|edits) said:

January 20, 2007
You might need to scroll down a bit to see the save button, depending on your screen resolution and how much of the page fits on your screen.


- Tim Doyle, TaxAlmanac Moderator - Talk to me 18:59, 19 January 2007 (CST)

Death&Taxes (talk|edits) said:

20 January 2007
Now you are giving us an out. That horrid Publication 463 also tells us that if you have no regular place of work but generally work in the metropolitan area where you live, you can deduct the daily transportation costs between home and a temporary worksite outside that metropolitan area. I represent several boilermakers and generally we use 40-45 miles as being outside the metropolitan area. I know of others who drop that definition to 35 miles, but that is a little too rich for me. I have handled perhaps six-eight audits on these people, none in the past 10 years, and never saw any lose this issue.

Kevinh5 (talk|edits) said:

20 January 2007
There was an interesting case in Wisconsin about a boilermaker. The IRS tried to say the whole state was his metropolitan area, because the Government didn't recognize any specific SMA or whatever they are called. The IRS lost.

Kevinh5 (talk|edits) said:

20 January 2007
http://www.ustaxcourt.gov/InOpHistoric/Wheir.SUM.WPD.pdf

Tax Court Summary Opinion, though. Darn.

Death&Taxes (talk|edits) said:

20 January 2007
Oddly Kevin, most of my boilermakers lived in the Poconos, or just north of I78 in Berks or Lehigh County so in reality that could be true with them, except one day they would drive to Delaware, another to Three Mile Island and then to Berwick etc etc etc. They would choose to live where they could jump on an interstate and in a spot where no drive was too long. One bought a 5th wheel and used to stay overnight in it.

JoAnn (talk|edits) said:

20 January 2007
Thanks Death&Taxes

"you can deduct the daily transportation costs between home and a temporary worksite outside that metropolitan area. "

This is the reference I was looking for. What page is that on in Pub 463

Kevinh5 (talk|edits) said:

20 January 2007
page 14 - use his link above, then the pdf file link. Same paragraph as what I wrote.

Dennis (talk|edits) said:

20 January 2007
None of this has anything to do with the instant case. Taxpayer's employer has a principal place of business. That is the workplace.

If his employer tells him he has the option of driving directly to the worksite rather than stopping at the shop the difference between mileage to shop and mileage to workplace is not a commute. It would be the same if he were a salesman instead of a construction worker.

JR1 (talk|edits) said:

January 20, 2007
Just peeked in to see why this thread had so much action...you guys charging by the word or post?

No, he can't deduct it. There. End.

Kevinh5 (talk|edits) said:

20 January 2007
Dennis, the employer's office is probably where the employer works, not necessarily where the employee works.

Yogafan00 (talk|edits) said:

21 January 2007
Sandysea, it sounds like we have or have had a similar "clientele", and that you're in the Miami/Broward/Palm Bch counties "Bermuda triangle." I used to live in Boca Raton but wasn't doing taxes then. I was in RE. I've no clue how to leave private messages to users.

Death&Taxes (talk|edits) said:

21 January 2007
Yoga: click on the word 'Talk' next to Sandysea's name and it will take you in one more screen to where you can leave her a message

Sandysea (talk|edits) said:

21 January 2007
You can click on my name Yoga and leave me a message or email me btw. I know that my clients travel extensively and to say they are not allowed this mileage is unequitable....they have to go to the office every Friday for payday and such they have a "home base" the shop....when they drive to Boca or Jupiter or Palm Beach and this is "commuting" then they should just go to the shop and have the employer provide a bus...the shop for my clients is never considered an expense...but the shop is in Vero...they drive to Boca or further, using tolls, etc and are not reimbursed...why then is this still commuting is my question?

Kevinh5 (talk|edits) said:

21 January 2007
Sandy - read the tax court case I provided a link for. That will give you an idea. Forget about the buffalo meat, though.

Sandysea (talk|edits) said:

21 January 2007
Thank you Kevin...I have just finished reading it...but I think the bison is interesting...hehe

Anyway, this is the stance I have taken with my clients who drive over a wide area to work at temporary job sites....these homes are being constructed and my main clients are in the "finish" end of the business...cabinets, carpeting, wood flooring, painting, etc. They travel extensively for the contractor...he has custom homes in a tri county area and we are talking daily commutes of sometimes 2 hours each way in order to get to a job site that is 80 to 90 miles away.

The "shop" is in a rural community; most likely would be a metropolitan area of say a town that is about 10 miles away. The address on their employment is the address of the shop...they are required to come pick up p/r checks on Friday or they can have them mailed if they can't make it to the shop, but they will not get the check until the following week when delivered by USPS. They are required "for the benefit of the employer mind you" to provide tools, safety equipment, etc as a condition of employment and must have reliable transportation....I don't think this is commuting and I think they are unreimbursed employee business expenses.

If one of them gets audited, then perhaps I can argue that with the court...very grey area when it comes to Metropolitan area.

Thanks for the insight :)

Death&Taxes (talk|edits) said:

21 January 2007
Metropolitan area is a vague concept: read my post on where my boilermakers live. 80-90 miles is a win every time; 40 plus is deductible for me, mileage under that it is a crapshoot. Of course, tools and equipment are deductible, but did I just see a case where the T/P lost steel-toed boots because they were wearable all the time. Seems to me he wore them to court.


Curiousity gets me here: what kind of dollar wages are we talking about. I realize FL has no income tax, but PA tax is only 3% and most live where real estate tax is not that high, but so many of mine get hit with AMT after computing EBE because 15-25K of miles plus union & field dues of over 4% of gross and my exorbitant fee throws them over. They are all married, wives making 20K, and are over the AMT exemption. If you are hit by AMT, there is a certain margin where adjustments can produce no additional tax.

Deback (talk|edits) said:

January 21, 2007
Sandy - I agree with your method of deducting mileage expenses for construction workers when they travel to different job sites throughout the year.

Sandysea (talk|edits) said:

21 January 2007
Alas D&T; most of my construction clients (1040 individuals and not the corporate sub type) are making wages of 15.00 an hour. That is average; some make only 1/2 that, some make up to about 20.00 an hour, but all in all, they don't have a pot to you know....

One in particular...he is a superintendent and he travels as a project manager...checks on several jobs that are going on. He uses the spreadsheet I provide to all my clients who use their personal vehicle for work and puts his mileage down once he leaves his home. I have let him know that the shop where he goes once or twice a week is commuting and he can't take that mileage...does he anyway? Who knows? But he knows the rules...to now tell him he can't deduct his mileage of 20K miles a year using his personal vehicle for his employer is simply not equitable in my opinion...

T/P wearing his boots to court? Is that a DUHHH or what? hehe

Dennis (talk|edits) said:

21 January 2007
If you guys choose not to make a distinction between a single employer who, rather than providing a fleet of trucks that the employee would pick up and return to the shop each day, instead directs these employees to use their personal vehicles to travel either to the shop or a particular worsite at his discretion and a situation involving multiple employers each of whom has a single job site that the employee travels to each day I think you are nuts.

Sandysea (talk|edits) said:

21 January 2007
Agreed Dennis; maybe we got off topic and each is a case by case basis. I truly agree that if it is discretionary and the employee chooses to go to the jobsite instead of checking in at the shop then this would be commuting :)

Death&Taxes (talk|edits) said:

21 January 2007
My first boss had a contractor who would truck his men to the jobsite. Wage and hour came in and made him pay his men portal to portal as it was termed.....from getting on the truck to getting off at the jobsite. That is Off Topic, but could be one reason contractors don't transport workers.


Your superintendant/project manager sounds like he is driving during the work day from site to site [deductible] and an argument should be made that his place of business is the shop, so that any first drive on days he is away from his place of business would be deductible. I think your 'peons' I think are governed by the metropolitan area concept.

Poorhouse Road (talk|edits) said:

21 January 2007
Sandy I had a client a few years back who came to me as a super on construction sites all over the met DC area. He insisted his mileage was deductible from his house to each job site and that is how he had always been doing it. I disagreed and let him know that some of his mileage should be commuting, but went ahead and did it his way. He was audited for a prior year that I did not do. Ended up owing IRS 1000s back. Next time he came to me he said to only take the additional mileage that was in excess of what a daily commute would be to the office. I agree with Dennis.

Pegoo (talk|edits) said:

22 January 2007
I use the following:

Home to Employer Office X, mileage from X to different jobs are deducted.

Sandysea (talk|edits) said:

22 January 2007
Thank you all...I spoke to this client today at a job site in fact; I told him about this discussion and the revenue ruling for WI, etc. He wants to go ahead and still take the full deduction that he has taken in the past (old habits die hard I guess) but I did tell him that in light of all this information, it would be more prudent to deduct from his mileage chart a daily commute to the shop even if he does not go there. Thank you for the information guys!!

DaveA (talk|edits) said:

26 January 2007
I am in somewhat the same boat. I have a bridge construction client that has no regular job location (may go to the shop a few times a year), does not normally work in his metro area but travels hundreds of miles on temporary work assignments (stays overnight). Since no regular job location and doesn’t normally work in his metro area, his out of metro travel and lodging are non-deductable??

Death&Taxes (talk|edits) said:

26 January 2007
Read the case given by Kevin above; he sounds just like the Boilermakers I do, no matter where they would live they would have many jobs outside their metropolitan area.

Dennis (talk|edits) said:

26 January 2007
Wake me up when you have a citation that addresses a single rather than multiple employers. And forget about construction workers. Think accountant who works for a firm that specializes in audits. Generally goes directly to client rather than office (at employers discretion).

Sandysea (talk|edits) said:

26 January 2007
Touche' Dennis...when I was with Coopers and Lybrand, I went to clients office for audit work...peon I was....I never could deduct the mileage to the audit engagement.....

CATAXES (talk|edits) said:

26 January 2007
Sandy,

That's why we got expense reimbursements for travel to client's office. C&L Class of '74.

Taxaholic (talk|edits) said:

27 January 2007
I think I agree that the Pub 463 statement about having no regular place of work allows us to deduct travel expenses outside the metro area. I do not agree with the comparison with an auditer or salesperson. These individuals can actually perform their work at the office. A bricklayer who goes to the shop is not laying bricks at the shop so he (or she) is not working. Does just showing up at the shop constitute work? I am scrounging around for information on this subject. If I find any, I will share whatever I find.

Sandysea (talk|edits) said:

27 January 2007
I was with the lovely C&L in 1992; thought I had reached the pinnacle...blue suit, white blouse and heels....wow am I ever glad that it was only 2 years with them!!! hehehe

Kevinh5 (talk|edits) said:

27 January 2007
is that what the pinnacle looks like? White blouse and heels?

Will (talk|edits) said:

27 January 2007
oh my, I'm destined to failure...

Glmpllc (talk|edits) said:

27 January 2007
personally, I've never looked good in heels ;)

Sandysea (talk|edits) said:

27 January 2007
I thought so Kevin....I was on top of the highest building in Orlando (nevermind the stinking parking garage 3 blocks away walking in heels) and had a nice little cubby as my "office" along with the other slew of cattle...hehehehe

Now it is flip flops, shorts or jeans and t shirts unless a client comes by, then I have to dress up to at least a pair of real shoes...hehe. NOW I have reached the pinnacle...I work more, get less money but love every minute of my little office in a Bohemian setting...not the high rise, but I can do what I want...even got a refrigerator stocked with rum, coke, ice and an occasional sandwich :)

Glmpllc (talk|edits) said:

27 January 2007
...now that's the good life.

Death&Taxes (talk|edits) said:

27 January 2007
Good lord, Sandy.....I saw the female marketing reps from IBM in their blue suits, white blouse, frilly tie, but wearing sneakers to see me [with heels inside their bag, of course] and they would ask 'can I deduct my clothes?' That may bave been 5-6 years earlier, when the Y-word was in vogue.

Taxaholic (talk|edits) said:

27 January 2007
IRS Rev. Rul. 94-47 states that expenses incurred in going between a taxpayer's residence and a work location are nondeductible commuting expenses except under the following three circumstances:


(1) A taxpayer may deduct daily transportation expenses incurred in going between the taxpayer's residence and a temporary work location outside the metropolitan area where the taxpayer lives and normally works. However, unless paragraph (2) or (3) below applies, daily transportation expenses incurred in going between the taxpayer's residence and a temporary work location within that metropolitan area are nondeductible commuting expenses.

(2) If a taxpayer has one or more regular work locations away from the taxpayer's residence, the taxpayer may deduct daily transportation expenses incurred in going between the taxpayer's residence and a temporary work location in the same trade or business, regardless of the distance.

(3) If a taxpayer's residence is the taxpayer's principal place of business within the meaning of s 280A(c)(1)(A), the taxpayer may deduct daily transportation expenses incurred in going between the residence and another work location in the same trade or business, regardless of whether the other work location is regular or temporary and regardless of the distance.


Based on this it appears that travel outside the metro area is clearly deductible based on (1). Less clear, is deductible travel within the metro area based on (2). There seems to be no clear ruling on what constitutes one or more regular work locations away from the taxpayer's residence. I guess we are back to the shop as regular workplace or not.

In any case, the outside metro miles are the big numbers so it should still produce a significant benefit for the client.

Sandysea (talk|edits) said:

27 January 2007
Funny how times change, no? I would not want to go back to the brutal work I had to do to earn my living...much easier now to just be me and take it or leave it, it is easier than trying to dress up and play nice...hehe

Deback (talk|edits) said:

January 27, 2007
Levi's 550s and white Reebok Freestyle Hi-tops are what I wear every day!

Poorhouse Road (talk|edits) said:

27 January 2007
I left public accounting 33 years ago because they required a coat and tie. Have been a flannel shirt guy ever since.

Death&Taxes (talk|edits) said:

27 January 2007
Sweatshirts, jeans and today some kind of sneakers that were on sale at Sam's....other days my steel-toe Red Wings I bought when I had three acres to cut with the DR Brush Cutter in NY. They are still going strong six years later, but the DR went with the property. Met a big exec of a brokerage for the first time a couple of years ago on a Sunday to do his taxes years ago. He gave a look [he was still in a suit] and I said, "John, you're paying me for my brains, not my Armani. I can't think as well in a uniform like that." He takes the same appointment every year, 4pm on the first Tuesday in April, the last day I go to my downtown office, and in jeans.

Franski (talk|edits) said:

1 March 2007
IRS is contending that for boiler worksrs living in Maine & working in Massachusetts, their metro area is this vast area. The milege from Maine (thir home)to say Boston(their workplace) is about 124 miles and the boilerworkers stay overnight because of this distance. IRS is trying to deny the deduction for meals etc. Death & Taxes reference to the court case is very helpful. I will see if I can succeed with this reference. Thanks. By the way, please add any other info that might be helpful.

Death&Taxes (talk|edits) said:

1 March 2007
Is there any work in Maine? By the way, it was Kevin who cited the Wisconsin case.

Sandysea (talk|edits) said:

1 March 2007
I for one D&T LOVE MAINE...who cares if there is work? I will live off the fat of the land...hehe

Kevinh5 (talk|edits) said:

1 March 2007
Unfortunately it was a Summary Opinion, which carries no weight as precedence, BUT I would still use it to try to get the IRS to back down.

Death&Taxes (talk|edits) said:

12 June 2007
Here is a summary that might help: Metropolitan Area and Commuting

Kevinh5 (talk|edits) said:

12 June 2007
Thank you, DT, you may want to link the recent Tax Court summary opinion that said you can't take the long way around the barn to compute mileage (Marple). We had a discussion on it a week ago. I put it in at the end, but you may want to move it.

Death&Taxes (talk|edits) said:

12 June 2007
"Marple Case" is the link. The article is a work in progress, so that others might add to it as we find new references. Since Marple worked for the same employer, this might be the missing link that Dennis asked for above, but then this is a single employer with one work location.

Kevinh5 (talk|edits) said:

12 June 2007
Duh, I should have read your article instead of just scanning the links and I would have seen it.

A post from a non-taxpro, and related responses, have been moved to a consumer forum discussion (here).

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