Ever have a job where you work in an office and have to drive to get to clients?
That travel is tax deductible, if not reimbursed. If it's reimbursed, then that reimbursement comes off your adjusted gross income. Same rules for you as for the self-employed.
Where it seems unfair is that they get to work at home while you don't--but that's a condition you accept when you take the job. On the other hand, you also get to decide how far away from work you live, whether to car pool, how to get to work. I knew somebody who lived within walking distance of work. If it rained, she was 3 blocks by car. Another colleague at the same place of business drives his SUV by himself 40 miles one way each day. Another lived in an apt. 1-2 miles away and biked every day. I live 12 miles from work, but carpool in a compact car with another employee there.
That place of business (so to speak) is a school. A number of years ago I had to visit a student several times a week to help her. I was reimbursed for mileage to and from the school. Even if I went on a Sunday and drove 15-16 miles one way, since she lived 2-3 miles from the school I was reimbursed for the 2-3 miles. The reasoning? I could have chosen to go after school, not on a Sunday. My choice.
For a previous job my employer said to work at home. There wasn't room for me at the office--which was in his garage--and what I did I could do at home. If I needed to head to the office, that wasn't deductible. But I still had to run errands and use my own car--and those expenses were deductible--mileage from my home address, since that was my designated work space. Moreover, I had to take up part of my living space and dedicate it to my job. I was paying rent for this so my employer didn't have to pay rent for business space. If I had wanted to, I could have deducted that part of my rent, utilities, etc. Either way, my workspace is paid for and deductible as a cost of doing business. It's not like I profited from this. I just didn't have to subsidize my employer.
My boss worked at home. He had no garage. He had taken it and made it into a home office. Downstairs, secretary and her workspace, filing space, bathroom. Upstairs, his office. He deducted the expense, as he should have. Cheaper than renting space. But he lost his 2-car garage, kept the space heated, lit, and cleaned. As a result he had to build--at his own expense--a large shed behind his garage and a carport for his car and visitors.
For a while I was a freelancer. When I started, my ancient computer wouldn't cope with the new software I needed. No new computer = no work. So I got a new computer and software. It was mostly used for my work, so it was tax deductible (to that extent). Had I worked in an office, this would have been provided to me by my employer. Same for paper, printer, toner, mailing/shipping and even some reference materials. I incurred expenses that would have been deductible by the business I was contracting for as business expenses, and so I could deduct them as business expenses. If I were employed at an office (subsequently I was) I wouldn't have had those expenses. The tax deduction is because my freelancer revenues weren't income. They were gross revenue. The federal code taxes profits. In a sense they also tax your "profits", too, and not your gross revenues. That's why you get a standard deduction for income and a personal deduction for taxes. To make sure that you're not taxed on all the basic necessities required for you to be an economic unit. (Businesses get no such deductions.)
It looks like when I was a freelancer I employed no one. That's false. I employed me. I paid the employer-side Social Security and Medicare taxes for my employer; as an employee I paid my own portion of the SS and Medicare taxes. I spent time collecting on debts, filing paperwork, and rousting up new contracts. And when I did a lousy job and "let myself go" I didn't get unemployment. (Nice perk, that.) Then, after handling all the employer-side deductions anything left was my unadjusted income, which got all the standard deductions.
Now that I'm not a freelancer, no longer self-employed, though, I have a perk. I can deduct daycare expenses (up to a certain limit). When I was self-employed I couldn't. Used to be able to deduct up to a certain amount for classroom supplies as a teacher (not when I taught at the college level--only at the K-12 level), but now I can't. Wasn't in the budget that was passed in December '13. State law says even if the school doesn't provide certain things to the students the teachers have to, so it's a condition of my employment and not an unreimbursed employee expense that would be deductible. Just like my travel expenses to work.
And keep in mind--all those deductions weren't from my taxes. They're not "tax deductions." They're really "income deductions." So when I paid my 8% FICA as the employer that was mostly real money I paid; only a small portion would be offset by reduced taxes. My computer + software when I was a freelancer? $3k. Since my tax rate that year was something like 15%, only $450 at most would have been "paid for" by the state and federal government. The rest was out of my pocket--which is something you'd object to if your employer imposed on you. ("Okay, Dogs, you buy a $3k computer for your office here at work--it's yours, of course, but I'm only going to reimburse you $450--at the end of the year, if you don't use it for anything but work." Sound like a deal? Want the same perks as the self-employed?)
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