I work for a great many companies and am somewhat confused by the fact that, while most companies send me a 1099, there are a few who send a W-2 and deduct bits of taxes, etc.

The mileage log in my car covers *all* business miles I drive (I also note an odometer reading on the first workday of each month to substantiate business usage from personal usage) - for mystery shopping, auditing, retail events and merchandising. So...

Do I need to do anything special for the mileage for jobs for the companies that send me a W-2 and confuse the issue of my being a self-employed contractor?

The ones that send you a 1099, to them you are an independent contractor. The ones that send a w-2 you are an actual employee. Since your "job" requires you to travel, all miles that you drive for your "job", whether as an independent contractor or as a employee, you can deduct on your taxes. I have a log book that everytime I go to complete an assignment I log the date, the beginning odometer reading and then the ending odomerter reading in the log book. I do not record any personal mileage in the log book. As an independent contractor you are allowed to deduct your mileage and you can also deduct depreciation on your vehicle. Depending on the tax program you use, most of them will calculate the amount of depreciation you can take. You do need to right down the beginning mileage from the beginning of the year, or whenever you started tracking your mileage. But I would suggest that you only right down your business mileage, then you can just add up the miles.

There are two choices you have for claiming your car expense. You can either claim "actual expense" or you can take the "per mile" amount.

With "actual expense" you list the deprecation, repairs, gas, insurance, tags and maintenance costs. As an example, lets say that for 2008 you drive 20,000 miles. Lets say your vehicle expenses (including depreciation, gas etc.) are $8,000. Your mystery shopping miles of those 20,000 are 10,000. You would get a deduction of about half of your expenses. Since many of us get our maintenance (oil changes) on shops and are reimbursed that expense, we need to be careful and not "double dip" by also claiming it as part of our "actual expense". Similarly the gas we pick up on shops as a requirement we need to be careful not to "double dip" with.

With the "per mile" amount, IRS has set up 50.5 cents per mile for 2008. This number is supposed to cover the usual costs of insurance, tags, depreciation, gas and repairs etc. With this method there is no question about how you accomplished the task--whether your oil changes and gas were shop reimbursements.

While it may be that with a new car the "actual expense" method may be more beneficial to you, it is important also to think about how you use a car. If you drive a car for only two or three years and trade it in, "actual expense" may work for you over the long haul. If, on the other hand, you drive a car for 6-10 years it probably is better to use the "per mile" method because depreciation under "actual use" is highest in the first couple of years.

Once you decide on a method you are not allowed to change methods in subsequent years.

Parking expenses and tolls are a separate line item so are not included as part of either of the methods mentioned above.

Thanx for the clarification. I really appreciate the input.

It looks like the records I'm keeping will continue to do what they need to do. And Quicken H&B continues to tell me how much of my income is offset by the 50.5 cents/mile (which really seems a lot simpler to me than the alternative, given that I'm accustomed to keeping my mileage notebook on the passenger seat). And with the amount of driving I do - although I'm trying to do less now with $4/gal gas - why, I don't really make much money at all!

Jeanne