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Commuting vs. Tax Deductible Transportation Expenses 
 
by kmhagen July 26, 2005

Commuting expenses from home to work and back are generally not tax deductible expenses. But you may be able to take a deduction for transportation expenses if you have more than one work location, such as a second job; if your work requires you to go to different locations; if you are working at a temporary location; or if your home is your principal place of business.

Transportation expenses include the costs of getting from your home to a temporary workplace, going to business meetings away from your regular workplace, visiting customers and clients, and getting from one workplace to another in the general area of your tax home. Travel expenses while you are away from home are treated as a separate topic for tax purposes.

Transportation expenses include air, train, bus, and taxi fares, and also include the expenses of using your own vehicle.

Brief Summary

For most employees and self-employed persons, transportation expenses are treated as follows:

  • Between your home and your regular or main workplace - personal commuting expenses and not deductible.
  • Between your home and a temporary work location - deductible if your regular or main job is at another location.
  • Between your regular job location and a temporary work location - always deductible.
  • Going from your regular or main job to a second job - always deductible.
  • Between a temporary work location and a second job – always deductible.
  • Between your home and a second job – not deductible on your days off from your regular or main job. These are commuting expenses.

Commuting Expenses

The transportation cost for getting from your home to your regular place of work and back home again, whether by train, bus, underground train, taxi, or by driving your own car, are personal commuting expenses and are not deductible. Commuting expenses are not deductible no matter how far your home is from your work, and fact that you may be doing work along the way, does not change the commuting expense from a personal expense to a business expense.

Parking At Work and Advertising on Your Vehicle

Parking fees at your regular place of work are considered part of your commuting expense, and are also not deductible. Also, placing display material on your vehicle that advertises your business does not change your vehicle from personal use to business use, and the transportation expenses from your home to your regular workplace would still be nondeductible commuting expenses.

Hauling Tools in Your Vehicle

Hauling tools in your vehicle from your home to work does not change the fact that these are still commuting expenses. But if you have to incur additional expenses, such as renting a trailer to haul tools and equipment, this additional cost would be a deductible expense.

If you haul tools because you are going to a jobsite other than your regular place of work, your transportation expenses are deductible if the jobsite is considered a temporary workplace.

Union Hall

Union members who get their work assignments from a union hall and then go to a worksite cannot deduct transportation expenses in getting from the union hall to the worksite. The union hall is not considered a regular place of work, even though you have to go there to get your work assignment, and transportation expenses from your home to the union hall, and then to the worksite, are considered commuting expenses.

Car Pools

Using your vehicle in a non-profit car pool is still a nondeductible commuting expense. The amounts you receive from other passengers are a reimbursement of your expenses. You do not include them in your income and cannot deduct your expenses.

But, if you operate a car pool for profit, you would include the payments you receive in your income and could deduct your expenses.

Temporary Work Location

A temporary work location is defined as a place you work, in addition to your regular or main place of work, for a period that is expected to last less than one year. In this case, you can deduct your round-trip transportation expense from your home to the temporary work location, regardless of the distance.

Change in Expected Length of Work Assignment

Whether a work location is temporary will depend on the circumstances. If it is reasonably expected at the outset that the work assignment at that location will last longer than one year, it is not considered a temporary work location and your transportation expenses would be nondeductible commuting expenses. If a work assignment is initially expected to last less than one year, but it is later determined that it will be expected to last more than one year, the work location will cease to be temporary, and transportation expenses will no longer be deductible. But up until that time, when the expectation changes, you can deduct the expenses.

No Regular Place of Work

If you work in different locations but have no regular place of work, you can deduct transportation expenses from your home to a temporary work location, but only if it is outside the metropolitan area where you normally work. Transportation expenses to work locations within the metropolitan area are not deductible. However, if you visit different locations the same day, see the following.

Visiting Different Customers and Clients

If you do not have a regular place of work, do not have a home-based business, and you visit different customers or clients, your transportation expenses from your home to your first business contact, and from your last business contact to your home, are nondeductible commuting expenses. But your transportation expenses in getting from one customer or client location to another are deductible.

Going From One Work Location to Another

If you work at two (or more) different locations in the same day, whether or not for the same employer, you can deduct transportation expenses in going from one work location to another. If you do not go directly from one work location to another, the amount of expense you can deduct is what it would cost to go by the most direct route.

Going to a Second Job on Your Day Off

Going from your home to a second job on your day off from your regular, or main job, is a commuting expense and is not deductible.

Armed Forces Reservists

If a meeting of your Armed Forces Reserve unit is held on a day that you work at your regular job, you can deduct your transportation expenses. If the meeting is on your day off, normally you could not deduct your expenses. But if the meeting of your Reserve unit is held at a temporary location, and you have one or more regular places of work, you can deduct the transportation expenses, even if the meeting is on a day off.

If you work in a metropolitan area but do not have a regular place of work, and the Reserve meeting is held outside that metropolitan area, you can deduct your transportation expenses.

Travel Overnight or More than 100 Miles

If you have to travel away from home overnight to attend the Reserve unit meeting, you can deduct your expenses as travel expenses. And, if you have to travel more than 100 miles from home, you may be able to deduct your travel expenses as an adjustment to income rather than as an itemized deduction.

Home as Your Principal Place of Business

If your home qualifies as your principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. In this case, you may be able to claim your transportation expenses as business expenses.

Rural Mail Carriers

If you received a qualified reimbursement for U.S. Postal Service employees, you can use this reimbursement amount as your deduction for transportation expenses. If your actual expenses are more than your allowance, you will need to complete Form 2106 and take an itemized deduction for your expenses. If you received a qualified reimbursement, you will have to keep track of your actual expenses – you cannot use the standard mileage rate.


 




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