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Posted by Arthur Kamlet on June 22, 2008, 9:44 pm
Please log in for more thread options >> "tompaulko" wrote:
>> > My wife and I have a consulting business that is officed in our home.
>> > My wife is consulting as a receptionist for a salon about 18 miles
>> > away from our home. The salon is invoiced by our company and pays our
>> > company. Is the mileage deductible?
>>
>> You two need to get a real accountant and throw away whatever scam
>> literature you got suckered into before the IRS catches up with you. This
>> is the silliest thing I've ever heard of, and I've been around a while.
>> Your wife is working as an employee at the salon, and the salon owner needs
>> to wise up also. As we say on the farm, pigs get fat, hogs get slaughtered
>
>Please elaborate. Where is the scam? My wife is NOT an employee of the
>salon. She is an employee of our consulting company, and our company
>withholds state, federal and FICA and pays the company portion of
>FICA, unemployment, etcetra. The salon is happy with the arrangement,
>our company is happy with the arrangement, the IRS gets paid. Where's
>the problem?
>
>I have a full time job as well. However, the company at which I work
>all day long is not my official employer for tax purposes. The
>official arrangement is that I work for another company B which
>handles all the payroll for company A (along with hundreds of other
>companies). Company B does all my withholding, FICA, unemployment
>insurance, 401k, and benefits which the smaller company A does not
>have the resources or the economy of scale to offer. This seems like
>the same deal, except on a much larger scale.
>
>When I was working as a consultant for my own company, I did the same
>thing my wife now does, travel to different companies, sometimes
>spending a couple of months, and sometimes spending years. I was never
>"employed" by any of these companies. My consulting company handled
>all the payroll and benefits, just as it does now for my wife. So
>where exactly does the problem lie?
Tell us what sort of entity you own that issues you a W-2 form and
issues your wife a W-2 form?
For example, it could be a general partnership, an S Corporation,
a C Corporation, a Sole Proprietorship, ... At the state level
it could be organized as an LLC.
And please explain to us if your wife works as a receptionist
for a business why the employer requires that she maintain
an office in the home and how she performs her receiptinist
duties while in this home office. Ditto for your work.
Phil Marti is undoubtedly aware that the IRS has finally discoverd
that many taxpayers are claiming office in the home when they
do not meet important requirements of having an office, including
the convenience of the employer rquirements, and the regularly
and exclusively requirement. Which is a nice way to say many
taxpayers are improperly claiming such a deduction, especially
in an attempt to convert nondeductible commuting miles into
supposedly business-related mileage.
But perhaps you have a legitimate OIH here and just haven't told
us anything to demonstrate that.
So 1) what entity is your employer leasing arrangement, 2) do you
meet the convenience of employer rule, 3) do you meet the regularly
and exclusively rule, and 4) just how is the home office used and
needed in her work and in your work?
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
--
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