Can self-employed individuals deduct their mileage spent commuting to events?
I looked at Publication 463 (2014), Travel, Entertainment, Gift, and Car Expenses  for examples. I thought this was the mot relevant. No regular place of work.   If you have no regular place of work but   ordinarily work in the metropolitan area where you live, you can   deduct daily transportation costs between home and a temporary work   site outside that metropolitan area. Generally, a metropolitan area includes the area within the city   limits and the suburbs that are considered part of that metropolitan   area. You cannot deduct daily transportation costs between your home and   temporary work sites within your metropolitan area. These are   nondeductible commuting expenses. This only deals with transportation to and from the temporary work site.  Transportation expenses do not include expenses you have while   traveling away from home overnight. Those expenses are travel expenses   discussed in chapter 1 . However, if you use your car while traveling   away from home overnight, use the rules in this chapter to figure your   car expense deduction. See Car Expenses , later. You will also have to consider the cost of tolls of the use of a  trailer if those apply.
The short answer is yes you probably can take the deduction for a home office because the space is used exclusively and you are working there for the convenience of your employer if you don't have a desk at your employers office. The long answer is that it may not be worth it to take the home office deduction as an employee. You're deduction is subject to a 2% AGI floor. You can only deduct a percentage of your rent or the depreciation on your home. A quick and dirty example if you make $75k/year, rent a 1200 sqft 2 bedroom apartment for $1000/month and use one bedroom (120 sqft) regularly and exclusively for your employer. You can deduct 10% (120sqft/1200sqft) of the $12000 ($1000*12 months (assumes your situation didn't change)) in rent or $1200. However because you are an employee you are subject to the 2% AGI floor so you can deduct $1200-$1500 (75000*.02 (salary * 2% floor)) = -300 so in order to deduct the first dollar you need an additional $300 worth of deductible expenses.  Depending on your situation it may or may not be worth it to take the home office deduction even if you qualify for it. The IRS Guidance pertaining to the subject.  In general the best I can say is your business expense may be deductible.  But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related   expenses, including the cost of reaching their destination, the cost   of lodging and meals and other ordinary and necessary expenses.   Taxpayers are considered “traveling away from home” if their duties   require them to be away from home substantially longer than an   ordinary day’s work and they need to sleep or rest to meet the demands   of their work. The actual cost of meals and incidental expenses may be   deducted or the taxpayer may use a standard meal allowance and reduced   record keeping requirements. Regardless of the method used, meal   deductions are generally limited to 50 percent as stated earlier.    Only actual costs for lodging may be claimed as an expense and   receipts must be kept for documentation. Expenses must be reasonable   and appropriate; deductions for extravagant expenses are not   allowable. More information is available in Publication 463, Travel,   Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be   deducted if they are both ordinary and necessary and meet one of the   following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted   during the activity and the taxpayer had more than a general   expectation of getting income or some other specific business benefit   at some future time.   Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly   before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as   well as other limitations and requirements for deducting entertainment   expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the   course of their trade or business. In general, the deduction is   limited to $25 for gifts given directly or indirectly to any one   person during the tax year. More discussion of the rules and   limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance.   The standard meal allowance is   the federal M&IE rate. For travel in 2010, the rate for most small   localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate You can only deduct (with the 2% AGI threshold) expenses that: You've actually incurred. I.e.: you actually paid for equipment or services provided and can show receipts for the payment. At the request of the employer. I.e.: you didn't just decide on your own to buy a new book or take a class, your employer told you to. With business necessity. I.e.: it was in order for you to do your job. And you were not reimbursed by your employer. I.e.: you went somewhere and spent your after tax money on something employer explicitly told you to pay for, and you didn't get reimbursed for that. From your story - these conditions don't hold for you. As I said in the comments - I strongly suggest you talk to a lawyer. Your story just doesn't make any sense, and I suspect your employer is doing something very fishy here. You cannot deduct expenses directly.  However, your employer may participate in programs to allow you to make a pretax deduction capped at $255 per month to pay for certain commuting expenses.  For personal car commuters the main category is to pay for parking.   IRS guidelines Qualified Transportation Benefits This exclusion applies to the following benefits. A ride in a commuter highway vehicle between the employee's home and   work place. A transit pass. Qualified parking. Qualified bicycle commuting reimbursement. You may provide an employee with any one or more of the first three   benefits at the same time. However, the exclusion for qualified   bicycle commuting reimbursement isn't available in any month the   employee receives any of the other qualified transportation benefits. "The piece is a little misguided at best and poor journalism at worst. The problem lies in the difference between what's deductible for individuals and what's deductible for corporations. The short version of the story is that corporations can deduct a hell of a lot more things than individuals can. Individual deductions are spelled out in the Internal Revenue Code. Stuff like medical expenses (above 7.5% of your AGI), certain educational things, etc.  For corporations, the basic rule is that they can deduct any ""ordinary and necessary"" business expenses. That includes operating, travel, interest, employee, etc.  I wish that the article had cited specific sections of the Code if this was some kind of loophole or something, but alas, it appears that they didn't. That leads me to believe that these companies are deducting the portion not paid to the government as a business expense.   ~~For what it's worth, I don't believe that a company can deduct those expenses for tax purposes unless it's to ""protect their business interests."" My assumption (I don't have the time or desire to search case law right now) is that settlements with the US Government are considered to fall under that definition.~~  **EDIT** - See my comment [here](http://www.reddit.com/r/business/comments/11dbzu/federal_regulators_have_lauded_a_series_of/c6ll7ez) for the relevant Treasury Regulation dealing with this." No, it's not possible. Even if you had no deduction or credits, your federal tax on $16,604 would be: $9075 @ 10% = $907.50 +  $7529 @ 15% = $1129.35 = $2036.85 That assumes you are filing as single. There must be more to the story.  Typo in your income numbers?  Also, what do you mean by a self-employment tax deduction? Maybe update your question to include a breakdown of everything you entered? Edit: As noted in Loren's answer, it seems that it is indeed possible in at least one case (self-employment taxes). "Short answer, yes. But this is not done through the deductions on Schedule A. This can happen if the employer creates a Flexible Spending Account (FSA) for its employees. This can be created for certain approved uses like medical and transportation expenses (a separate account for each category). You can contribute amounts within certain limits to these accounts (e.g. $255 a month for transportation), with pre-tax income, deduct the contributions, and then withdraw these funds to cover your transportation or medical expenses. They work like a (deductible) IRA, except that these are ""spending"" and not ""retirement"" accounts. Basically, the employer fulfills the role of ""IRA"" (FSA, actually) trustee, and does the supporting paperwork." The short answer is no you can only deduct actual expenses. The long answer is that it would be impossible for the IRS to determine the value of your time and it would open the tax system to an enormous amount of fraud (think of being able to make up time spent or writing off time spent volunteering at a soup kitchen or any other charity). Now you can write off expenses you have involved in doing the work, equipment and supplies used to do the work along with any wages you paid an employee or contractor to do said work. "I would say similar rules apply in the US.  If you have a net loss from rental property, you certainly can claim that loss against your personal income. There are various rules around this though that make it a bit less clear cut.  If you are a ""real estate professional"", which basicly means you spend at least 750 hours per year working on your rental properties (or related activities), then all losses are deductible against any other ordinary income you have. If you aren't a ""real estate professional"", then your rental income is considered a ""passive activity"" and losses you can count against regular income are limited to $25,000 per year (with a carry-forward provision) and begin to phase out entirely if your income is between $100,000 and $150,000. So, the law here is structured to allow most small-time investors to take rental real estate losses against their ordinary income, but the income phase-out provision is designed to prevent the wealthy from using rental property losses to avoid taxation." Here is a quote from the IRS website on this topic: You may be able to deduct premiums paid for medical and dental   insurance and qualified long-term care insurance for yourself, your   spouse, and your dependents. The insurance can also cover your child   who was under age 27 at the end of 2011, even if the child was not   your dependent. A child includes your son, daughter, stepchild,   adopted child, or foster child. A foster child is any child placed   with you by an authorized placement agency or by judgment, decree, or   other order of any court of competent jurisdiction. One of the following statements must be true. You were self-employed and had a net profit for the year reported on   Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ   (Form 1040), Net Profit From Business; or Schedule F (Form 1040),   Profit or Loss From Farming. You were a partner with net earnings from self-employment for the year   reported on Schedule K-1 (Form 1065), Partner's Share of Income,   Deductions, Credits, etc., box 14, code A. You used one of the optional methods to figure your net earnings from   self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a   more-than-2% shareholder. Health insurance premiums paid or reimbursed   by the S corporation are shown as wages on Form W-2, Wage and Tax   Statement. The insurance plan must be established, or considered to be   established as discussed in the following bullets, under your   business. For self-employed individuals filing a Schedule C, C-EZ, or F, a   policy can be either in the name of the business or in the name of the   individual. For partners, a policy can be either in the name of the partnership or   in the name of the partner. You can either pay the premiums yourself   or your partnership can pay them and report the premium amounts on   Schedule K-1 (Form 1065) as guaranteed payments to be included in your   gross income. However, if the policy is in your name and you pay the   premiums yourself, the partnership must reimburse you and report the   premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to   be included in your gross income. Otherwise, the insurance plan will   not be considered to be established under your business. For more-than-2% shareholders, a policy can be either in the name of   the S corporation or in the name of the shareholder. You can either   pay the premiums yourself or your S corporation can pay them and   report the premium amounts on Form W-2 as wages to be included in your   gross income. However, if the policy is in your name and you pay the   premiums yourself, the S corporation must reimburse you and report the   premium amounts on Form W-2 as wages to be included in your gross   income. Otherwise, the insurance plan will not be considered to be   established under your business. Medicare premiums you voluntarily pay to obtain insurance in your name   that is similar to qualifying private health insurance can be used to   figure the deduction. If you previously filed returns without using   Medicare premiums to figure the deduction, you can file timely amended   returns to refigure the deduction. For more information, see Form   1040X, Amended U.S. Individual Income Tax Return. Amounts paid for health insurance coverage from retirement plan   distributions that were nontaxable because you are a retired public   safety officer cannot be used to figure the deduction. Take the deduction on Form 1040, line 29. In some circumstances losses from self-employment can be offset against total income and/or capital gains. If this applies to you may be able to claim back some of the tax taken by PAYE from your day job.  You can also to some extent carry the loss backwards into previous tax years or forward into the next one if you can't use it fully this year. HMRC have some information available on the current rules: When you can claim losses  You can claim: But You can’t claim: Per IRS regulations, if your stipend is not paying you for qualified expenses (primarily, tuition and books; explicitly not room and board or travel), it is taxable.  It doesn't require self-employment taxes (which are Medicare and FICA, normally paid in part by an employer), but it is taxable income from an income tax perspective.  You can generally deduct your books and such if you have your receipts - expenses 'required' by the institution for the coursework.  Do verify that the amount on the 1099-MISC reflects what you actually received in cash above and beyond the tuition waiver - don't assume the college did this the way you expect, or even properly.  Your bank statements should match the amount on the form. You should definitely include it in your gross income and pay taxes on it.  If you received alternate instruction, you should clarify that with the people doing the filing, and follow up with a supervisor perhaps (it's possible the volunteers helping at an event like this aren't familiar with this part of tax preparation). (Source, in addition to IRS regulations - I was my wife's tax preparer many of the years she was in her Ph.D. program.) When you take the self employed health care deduction on on Line 29 of form 1040 for 2010 it also will lower your self employment tax.  See line 3 of Schedule SE.  You report your net earnings from self employment less line 29 from 1040. "I'm not a tax professional, but as I understand it, you are not expected to commute from San Francisco to Boston.  :) If your employer has not provided you with an external office, then yes, you have very likely met the ""convenience of the employer"" test. However, to take the home office deduction, there are many requirements that have to be met. You can read more at the Nolo article Can You Deduct Your Home Office When You're an Employee? (Thanks, keshlam) The home office deduction has many nuances and is enough of an IRS red flag that you would be well-advised to talk to an accountant about it.  You need to be able to show that it is exclusively and necessarily used for your job. Another thing to remember: as an employee, the home office deduction, if you take it, will be deducted on Schedule A, line 21 (unreimbursed employee expenses), among other Miscellaneous Deductions.  Deductions in this section need to exceed 2% of your adjusted gross income before you can start to deduct.  So it will not be worth it to pursue the deduction if your income is too high, or your housing expenses are too low, or your office is too small compared to the rest of your house, or you don't itemize deductions." Since your child is 2, he has a long time horizon for investment.  Assuming the savings will be used at age 19, that's 17 years.  So, I think your best bet is to invest primarily in equities (i.e. stock-based funds) and inside an RESP. Why equities?  Historically, equities have outperformed debt and cash over longer time periods.  But, equities can be volatile in the short term. So, do purchase some fixed-income investments (e.g. 30% government bonds and money market funds), and do also spread your equity money around as well -- e.g. buy some international funds in addition to Canadian funds.  Rebalance every year, and as your child gets closer to university age, start shifting some assets out of equities and into fixed-income, to reduce risk.  You don't want the portfolio torpedoed by an economic crisis the year before the money is required! Next, why inside an RESP? Finally... what if your kid doesn't attend post-secondary education?  First, you should probably get a Family RESP, not a Group RESP.  Group RESPs have strict rules and may forfeit contributions if your kid doesn't attend.  Have a look at Choosing the Right RESP and Canadian Capitalist's post The Pros and Cons of Group RESP Plans. In a Family plan, if none of your kids end up attending post-secondary education, then you forfeit the government match money -- the feds get it back through a 20% surtax on withdrawals.  But,  you'll have the option of rolling over remaining funds into your RRSP, if you have room.