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I have an office in my home which is my only base of business operations. However, it's not exclusively used for business purposes. (As a freelance software developer, the line between work and play is iffy, and I've been advised not to risk claiming it as a home office.)

I've heard that this means I can't claim mileage to and from a client or other work-related driving. Is that true?

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I'd recommend figuring out how to make that line much clearer to eventually take the deduction. For example, the computers in my office have no games installed. My whiteboards, calendar, office supplies, professional library, etc are in that room and that room alone. Don't sit at your desk and close the door if you're not working.. bring your laptop to another room. – CaseySoftware Jan 9 at 0:43
That's not really practical. Most of my activities when I'm not working for a client are not clearly defined as work or play. If I'm contributing to an open source project, is that just for fun, or professional development? What about making jokes on Twitter? Jokes on Twitter are me goofing off and a crucial part of my marketing strategy at the same time. – Peeja Jan 9 at 14:57

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You should ask a EA/CPA for a proper tax advice, but to the best of my understanding it may be true.

Transportation expenses include the ordinary and necessary costs of all of the following.

  • Getting from one workplace to another in the course of your business or profession when you are traveling within the city or general area that is your tax home. Tax home is defined in chapter 1.

  • Visiting clients or customers.

  • Going to a business meeting away from your regular workplace.

  • Getting from your home to a temporary workplace when you have one or more regular places of work. These temporary workplaces can be either within the area of your tax home or outside that area.

You can claim mileage on travel that is not a regular commute. If you work at your clients' - that's a regular commute. What's not is, for example, going to a meeting elsewhere while you generally work for that client in a specific office.

Consider you have this situation:

You live in San Jose, CA.
Your client is in Mountain View, CA.

You work either at home (San Jose, non-deductible
since not exclusively used for business), and once
or twice a week you come to Mountain View
(non-deductible as commute).

You're required to go to the Moscone center for a
meeting with the clients' client on behalf of your
client for a day.

You can deduct the mileage from Mountain View to San Francisco.

If, on the other hand you only go to clients' sites for occasional meetings, and regularly only work from home, then you can deduct the trips to your clients even though you can't get the deduction for the home office. The fact that its non-deductible doesn't make it less of an office.

This is my understanding, but I may be wrong. Consult with a tax professional.

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