Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes
What mileage is deductible for a real estate investor who practices the BRRRR strategy, works from home, and travels back and forth to the properties. During the renovation stage, I drive back and forth between home and property a few times a day; are those miles deductible?
Your commute to work is not deductible, IRS has interpreted this in your type business to mean you first trip to the job sit, or "business activity" and trip home is not deductsble. But once at that first business activity, then any trips to the bank, hardware store, post office other job sites, are deductible soyou can be creative. I knew a business owner who had to take cash to night deposit box at bank after work every night, he passed 3 branches closer to go to a branch near his house. This way he could writ off his miles to the bank evey night, but not the milage from the bank to home, he would do the same in reverse to the post office business PO box every morning.
I've spoken to other investors and they all stated the IRS cracked down on the mileage one can write off, plus it's not as much. Best bet is to speak to your accountant.
Your commute to work is not deductible, IRS has interpreted this in your type business to mean you first trip to the job sit, or "business activity" and trip home is not deductsble. But once at that first business activity, then any trips to the bank, hardware store, post office other job sites, are deductible soyou can be creative. I knew a business owner who had to take cash to night deposit box at bank after work every night, he passed 3 branches closer to go to a branch near his house. This way he could writ off his miles to the bank evey night, but not the milage from the bank to home, he would do the same in reverse to the post office business PO box every morning.
Your commute to work is not deductible, IRS has interpreted this in your type business to mean you first trip to the job sit, or "business activity" and trip home is not deductsble. But once at that first business activity, then any trips to the bank, hardware store, post office other job sites, are deductible soyou can be creative. I knew a business owner who had to take cash to night deposit box at bank after work every night, he passed 3 branches closer to go to a branch near his house. This way he could writ off his miles to the bank evey night, but not the milage from the bank to home, he would do the same in reverse to the post office business PO box every morning.
Hope this helps, good luck
Thanks Cameron . That is what I was wondering, whether or not driving to the job site is considered a commute. So you have answered that, thank you. I'm also wondering how creative "First Business Activity" can be; there is a little coffee shop around the corner from where I live. Could I go to the coffee shop, use my laptop there to do work, or alternatively pick up a newspaper there, every morning, and call that my first business activity? Also, how does the IRS deem additional trips throughout the day between home and job site, after the first trip? Thanks again.
I use an app called MileIQ - it documents all your miles and calculates how much you make for each trip. You just swipe right for personal use and left for business use. Each stop you make is reported. It also generates a monthly report. I love it.
I use an app called MileIQ - it documents all your miles and calculates how much you make for each trip. You just swipe right for personal use and left for business use. Each stop you make is reported. It also generates a monthly report. I love it.
I agree, MileIQ is a great app. I'm using the paid version, it's very efficient. I'm asking these questions about allowable mileage because each trip needs to be classified, so I want to know the classification rules.