When can you deduct commuting expenses?
Many people might travel to different job locations in order to work in today’s economy. The IRS understands that and allows several tax breaks for people who find themselves in these situations.
Deducting Commuting Expenses to Temporary Job Location
As a starting point, daily transportation costs between a taxpayers home and a regular work location are always nondeductible commuting expenses.The situation will change when a taxpayer is commuting between their home and a temporary job location. Under certain situations, you may be able to deduct costs of going to and from your home and a temporary (not regular) job location. Accurate mileage estimates must be provided to deduct any type of commuting expense on a tax return with the IRS.
You must meet the following requirements to deduct commuting expenses to a temporary job location:
- You have regular places of business outside your home, but sometimes travel to temporary work locations in the same trade or business.
- You travel to a temporary work location outside the metropolitan area in which you live and normally work. Usually 20-30 miles away, but this could depend on the city.
To meet this criteria, the work must be temporary. Employment at a work location is considered temporary if it is realistically expected to last (and does in fact last) for no more than a year. This would mean having to go to another work location for about 5 months would qualify. If you were working somewhere special for 5 months, you would be able to deduct your commuting expenses.
Temporary Job Turns into Permanent Job
If you are working at a temporary work location, and it evolves into your permanent work location, you will have to stop deducting your commuting expenses to the job location. You will have to stop right away when you realize that the working location is no longer temporary and is now your regular place of work.
In order to take the tax deduction, you must substantiate the auto expenses that you claim through adequate records, such as a log or diary. You can either use the standard mileage rate or deduct your actual expenses to arrive at the amount that is eligible for the deduction. You may always benefit by substantiating your IRS mileage deduction for commuting by printing out directions from online maps that show the miles the taxpayer actually drove. This will help clarify any issues that the IRS could possible raise on an audit of the taxpayer.