Q. I own a pet sitting business and see between five to eight clients a day. On the way to a client's house, to walk their dog, I often stop to buy a coffee or sandwich. I might sit at one of these stops for twenty minutes then continue on to the job. A mileage tracking app might log these coffee stops as trips. What will be the impact of these trips on my dog walking business taxes?
- Samantha L.
A. I assume you run your dog walking business from your home, not an outside office. If this is the case, the total amount of your mileage deduction depends on whether you have a tax deductible office in your home that qualifies as a principal place of business for your dog walking business. You can have such a home office if you perform administrative work for your business in a space in your home used exclusively for that purpose and you don't perform these tasks at another fixed location.
If you have a tax deductible home office, all the driving you do to your clients' homes to pick up and drop off dogs, as well as other places like dog parks, will be deductible. The IRS says that you can keep one single record of the total miles you drive for your business during the day so long as you use your car for uninterrupted business use.
Moreover, de minimis personal use (such as a stop for lunch on the way between two business stops) is not an interruption of business use (IRS Reg. 1.274-5T(c)(6)(i)(C). You can stop for meals or other minor personal uses during the day and still do this. There is no need to have a log of each unique drive over the course of your dog walking day.
If you don't have a tax deductible home office, everything is the same except you can't deduct your first trip of the day from home to a client's home or your last trip from a client's home back to your own home. These trips would be personal commuting, which is never deductible.
Having a home office eliminates such commuting because you're driving from an office to another place of business. Read Home Office Deduction 101 for more information on how to have a qualifying home office and how that impacts your taxes.
