They don't currently get any stipend or per diem for the travel unfortunately. That's why we're trying to figure out if there's any tax relief available. The union does have some provisions for travel pay, but only for jobs beyond a certain distance (I think it's 75 miles), and most of their assignments fall just under that threshold. Do you know if there's a standard mileage rate they could use instead of tracking actual gas costs?

Yes, using the standard mileage rate is usually much easier than tracking actual gas expenses. For 2024, the standard mileage rate for business travel is 67 cents per mile. This covers gas, wear and tear, depreciation, and insurance. If your partner qualifies to deduct these expenses (based on the temporary work location rules others mentioned), using the standard rate is typically much simpler than keeping all gas receipts. Just make sure they keep a detailed log of dates, locations, business purpose, and miles driven. There are several good mileage tracker apps that can help with this too.

This is the correct answer that everyone else missed. The Tax Cuts and Jobs Act suspended miscellaneous itemized deductions subject to the 2% floor from 2018 through 2025. This includes unreimbursed employee business expenses like mileage to job sites. If they're a W-2 employee, these expenses aren't deductible at the federal level right now. Some states still allow these deductions on state returns though, so check your state tax laws!

What about bank statements? Should I bring those too? I have most of my Amazon expense receipts saved but I'm not sure what else they might want to see related to my finances.

Yes, definitely bring your bank statements, especially ones showing your business expenses. The Revenue Officer will want to understand your complete financial picture. Bank statements help verify both your income sources and your expenses. Having those statements also helps with credibility - it shows you're being transparent and cooperative. Focus on the last 3 months at minimum, but if you have statements going back through the unfiled tax periods, those would be valuable to bring as well.

Valid point! I got a scam IRS letter once that looked super official. Real Revenue Officers will also have a badge and ID they can show you. And they never demand immediate payment during the first meeting.

This is a really important point. My previous employer did this exact thing, and it wasn't an "accident" - it was calculated. When multiple employees filed SS-8 forms, the company ended up getting audited and had to pay massive penalties plus back taxes for everyone they had misclassified. They also had to pay everyone back for the extra self-employment taxes we'd paid.

Exactly. The savings for employers can be substantial - typically around 20-30% of payroll costs. That's why the IRS has been cracking down on this practice. For anyone in this situation, it's worth knowing that the law has protections against retaliation for workers who file SS-8 forms or otherwise challenge their classification status. That doesn't mean it won't create tension, but you do have legal protections if your employer tries to fire you specifically for raising this issue.

If the IRS rules in your favor after filing Form SS-8, they'll typically assess the employer for their share of the FICA taxes (the 7.65% employer portion). You would file Form 8919 with your return to only pay the employee portion rather than the full self-employment tax rate. If you've already filed and paid the full self-employment tax, you can file an amended return to claim a refund for the difference once the determination is made. Just be aware that the SS-8 process can take 6+ months, so you might need to initially pay the higher amount and then amend later.

Thanks for explaining. That makes sense. I'll go ahead and file both forms then since it sounds like I can eventually get back the extra I paid if the determination goes in my favor.

But how does Venmo know which payments are business vs. just friends paying me back for stuff? I use the same account for both.

Great question. Venmo has been rolling out features to distinguish between personal and business transactions. They now have specific "business" profiles/settings, and the way payments are categorized matters. If people are paying you for goods and services (which they can select when sending money), those will be reported. If it's marked as payments between friends, it's treated differently. However, the IRS doesn't care how Venmo categorizes it - if it's income from services you provide, it's supposed to be reported regardless of how it was processed. The smart approach is to set up a separate Venmo account just for your business transactions to keep everything clean and organized.

I did this calculation for my home art studio which is about 350 sq ft. My income was around $11k last year. After deducting my legitimate business expenses (portion of mortgage interest, utilities, supplies, etc.), my taxable business income dropped to about $6,200. That saved me roughly $1,700 in taxes. The key is keeping good records of ALL your expenses. Things people often forget: portion of internet if you use it for business communication, cell phone percentage used for business, mileage driving to get supplies, software subscriptions, insurance, etc. It was definitely worth it for me.

That's a really good point I hadn't considered. My roommate is paying about $200 less than what other similar rooms go for in my neighborhood. Does that mean I can't take any deductions at all? Or would it just reduce the percentage I can claim?

It depends on how significant the discount is compared to fair market value. If it's just slightly below market rate, you're probably fine. But at $200 below market, you might need to adjust your rental percentage. Instead of claiming 50% as rental, you might need to calculate an adjusted percentage. For example, if market rate is $1000 but you charge $800, you could potentially justify 80% of the 50% space as rental (so 40% of your home instead of 50%). The key is having documentation showing comparable market rates to support your position if questioned.

Schedule E has been a lifesaver for my rental property. Just be careful about mixing personal and business expenses. The IRS looks closely at this area!