commuting vs travel expenses

IRS Commuting Rule: Keep Your Mileage Deduction Compliant in 2024

Navigate the complexities of the irs commuting rule and ensure your mileage deductions meet the latest tax guidelines for 2024.

As 2024 begins, taxpayers must be aware of the IRS Commuting Rule, which governs the eligibility for mileage deductions . Understanding this rule is crucial to ensure compliance and avoid potential penalties. In this article, we will delve into the basics of the IRS Commuting Rule, discuss the importance of compliance, and provide valuable tips to stay on the right side of the law. ‍ ‍

Understanding the IRS Commuting Rule

The basics of the irs commuting rule.

Before we delve into any updates for 2024, let's review the fundamentals of the IRS Commuting Rule. As you probably know, you can take a tax deduction for your vehicle expenses as a business owner. This is great! Business owners have a decision to make, do you take the standard mileage rate or deduct your actual expenses ? If you choose to take the standard mileage rate , it's important to know how the IRS handles commuting. According to the IRS, any expenses related to commuting between your home and regular workplace are generally considered personal and nondeductible.

Commuting is an everyday activity that is not considered a business expense. Commuting expenses typically include the cost of gas, public transportation fares, or any other expenses incurred while traveling to and from your regular place of work. These costs are considered personal expenses because they are necessary for you to get to work, which is seen as a personal choice and not a direct business expense.

Commuting expenses. You can’t deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You can’t deduct commuting expenses no matter how far your home is from your regular place of work. You can’t deduct commuting expenses even if you work during the commuting trip. IRS Publication 463, Travel, Gift, and Car Expenses

This includes your miles. Commuting mileage is any mileage between your home and a regular place of work, even if you only work there part-time. You cannot deduct commuting mileage from your taxes, even if: 

• You work there only part-time
• You stop somewhere on the way to work (i.e. say home → Staples for office supplies → office) 
• You work as an independent contractor and not a full-time employee (if the place you’re driving to is a regular place of business. )
• You take a phone call or work during your commuting trip

If you have multiple locations or job sites that you work at regularly, and drive between multiple locations each day, only the first and last trip of the day count as commuting mileage. For example: 

In this case, the first trip of the day and the last trip of the day (25 miles) are not eligible for deductions.  The other mileage throughout the day is considered business mileage and would be tax-deductible. 

Commute mileage is NOT tax-deductible. However, all other business-related mileage throughout the day IS tax-deductible.

Related:  IRS Mileage Rates 2024: What Drivers Need to Know

When can you deduct mileage to & from work (commuting)?

With any rule, comes exceptions. There are circumstances when you're eligible to take a deduction on your commuter mileage. However, this mileage expense must be purely for work purposes and unrelated to personal travel. As there can be overlap at times between business and personal driving, it's essential to be able to distinguish between the two.

For instance, if you are an independent contractor who works out of your home office and you drive to meet with a client, then return directly home, this trip is business-related and therefore deductible. However, if you drive to meet a client, then stop to pick up your dry cleaning, that’s where it can get complicated.

If you’re self-employed and operate your business from somewhere other than your home, then you can't deduct the miles driven to that location – that’s considered commuting miles. However, you can deduct driving costs from your business location to work-related activities, such as dropping packages off at the post office.

Commuting IRS Mileage Rules: Temporary Work Locations, Deductible Home Office & More

These are the specific types of business drives that are eligible for a mileage deduction according to the IRS Commuter Rule.

• If you are required for work to travel to another location, which isn’t your regular workplace or home.
• If you travel between your home and a temporary job, which you expect to work at for less than one year.
• If you travel between your main job and a second job.
• If you travel between your home and a temporary work location if your main job is at another site.
• If you travel from your regular workplace to a temporary job site.
• If you travel between a temporary work location and your second job.
• If you have a deductible home office, and you travel to your main job, this is considered as driving between workplaces.

Having a qualifying home office, which means it’s your main place of business and where you earn the majority of your income or perform most of your work tasks, allows you to bypass the IRS commuting mileage rule. For instance, you may deduct the cost of any trips you make from your home office to another business location. This is because your home office qualifies as your regular workplace.

Commuting between Job Sites & Job Site Definition

Job site is defined as a site at which the Work shall be performed under this subcontract. If you travel between your home and a temporary job site, which you expect to work at for less than one year or if you travel between your main job site and a second job site, then you can use those trips as a tax deduction .

Importance of Mileage Deduction Compliance

Why compliance matters.

Compliance with the IRS Commuting Rule is crucial for several reasons. Firstly, it ensures that you are filing your taxes correctly, reducing the risk of an audit or penalties. Additionally, maintaining compliance builds trust with the IRS and demonstrates your commitment to following tax regulations. By adhering to the rules, you can protect your financial interests and maintain a positive standing with the IRS.

Moreover, compliance with mileage deduction regulations is not just about avoiding penalties; it also impacts your overall financial health. By accurately tracking and reporting your mileage , you can maximize your tax deductions and potentially save a significant amount of money. This can lead to improved cash flow and better financial planning for your business or personal finances.

Potential Consequences of Non-Compliance

Failure to comply with the IRS Commuting Rule can have serious consequences. If you inaccurately claim commuting expenses as deductible business expenses, you may face penalties, interest, and potential legal actions. It's important to understand that the IRS has sophisticated tools and methods for detecting inconsistencies and potential abuses. Non-compliance not only harms your finances but also damages your reputation.

Furthermore, non-compliance with mileage deduction regulations can result in more than just financial repercussions. It can also lead to increased stress and anxiety as you navigate audits, appeals, and potential legal proceedings. The time and resources required to rectify non-compliance issues can be substantial, taking away from your focus on growing your business or managing your personal affairs effectively.

How to Keep Your Mileage Deduction Compliant

Keeping your mileage deduction compliant with IRS regulations is crucial for avoiding potential audits or penalties. In addition to accurately tracking your mileage and reporting it correctly, there are a few additional steps you can take to ensure full compliance.

Tracking Your Mileage Accurately

Accurate mileage tracking is essential to maintain compliance with the IRS Commuting Rule. Use a reliable mileage tracking method, such as a smartphone app or a mileage logbook, to record your business-related travels. Make sure to distinguish between personal and business miles by tracking the purpose of each trip. This level of detail will help you accurately calculate deductible mileage.

Moreover, it's beneficial to periodically review and reconcile your mileage records to ensure they align with your business activities. This proactive approach can help identify any discrepancies or inaccuracies early on, allowing you to make corrections promptly.

Reporting Your Mileage Correctly

When reporting your mileage deductions, it is crucial to be diligent in your documentation and reporting. Keep thorough records of your business-related mileage, including the date, purpose of the trip, and distance traveled. Report the deductions correctly on your tax return, following the IRS guidelines. By being meticulous in your reporting, you can confidently demonstrate compliance with the IRS Commuting Rule.

Furthermore, consider implementing a review process where a tax professional or financial advisor examines your mileage documentation before submission. This additional layer of scrutiny can provide peace of mind and assurance that your deductions are accurately reported and compliant with the latest tax laws.

Common Misconceptions about Mileage Deductions

Misconception 1: All Miles Driven are Deductible

A common misconception is that all miles driven can be deducted on your taxes. However, this is not the case. Only mileage directly related to your business activities, such as traveling to client meetings or running work-related errands, is deductible. Commuting from your home to your regular workplace does not qualify for deduction.

It's important to keep detailed records of your business-related mileage to substantiate your deduction claims. This includes maintaining a mileage log that documents the date, purpose, and number of miles driven for each business trip. Without proper documentation, your mileage deduction could be disallowed during an IRS audit.

Misconception 2: Commuting Miles are Always Non-Deductible

While it is generally true that commuting miles are not deductible, there are certain circumstances where they may be eligible. For example, if you have a home office and regularly conduct business activities there, the commuting miles from your home office to a client's location may qualify for a deduction. However, it is crucial to consult the IRS guidelines or a tax professional to ensure compliance.

Moreover, if you are self-employed and have multiple business locations, such as a main office and a satellite office, the mileage between these locations may be deductible as it is considered business travel. Understanding the nuances of mileage deductions can help you maximize your tax savings while staying within the bounds of the law.

Tips for Staying Compliant with the IRS Commuting Rule

Regularly reviewing irs guidelines.

IRS guidelines regarding commuting expenses and mileage deductions may change over time. It is essential to stay up-to-date with the latest rules and regulations to ensure your compliance. Regularly review the IRS publications and consult reputable tax resources to stay informed about any updates or modifications.

Additionally, subscribing to IRS newsletters or joining tax-related forums can provide valuable insights into any upcoming changes or interpretations of the commuting rule. By actively engaging with the tax community, you can stay ahead of the curve and adjust your practices accordingly to maintain compliance.

Seeking Professional Tax Advice

When in doubt or facing complex scenarios related to mileage deductions, seeking professional tax advice is highly recommended. Tax professionals can provide tailored guidance based on your specific situation, ensuring that you make informed decisions and remain compliant with the IRS Commuting Rule. Their expertise can help you maximize legitimate deductions while avoiding potential pitfalls.

Furthermore, establishing a long-term relationship with a tax advisor can offer ongoing support and proactive strategies to optimize your tax situation. These professionals can conduct regular reviews of your commuting expenses and deductions, identifying areas for improvement or potential risks to address, ultimately safeguarding your compliance and financial well-being.

Preparing for Future Changes to the IRS Commuting Rule

Staying Informed About Tax Law Changes

Tax laws and regulations, including those related to commuting expenses, are subject to change. To stay compliant in the long term, it is crucial to remain vigilant and keep track of any potential changes that may affect your deductible mileage. Regularly monitor updates from the IRS and reputable tax news sources to ensure you are always aware of the latest developments.

Changes in tax laws can have a significant impact on your financial planning and obligations. Being proactive in staying informed can help you anticipate adjustments that may be necessary to your commuting expense management. It is also advisable to consult with a tax professional who can provide guidance tailored to your specific situation.

Adapting Your Record-Keeping Practices

As the IRS Commuting Rule evolves, it is essential to adapt your record-keeping practices accordingly. Consider utilizing digital tools or apps specifically designed for mileage tracking and expense management. These tools can streamline the process, making it easier to regulate your mileage deductions and provide accurate records when needed.

Efficient record-keeping not only ensures compliance with tax regulations but also simplifies the process of preparing for audits or inquiries. By maintaining organized and detailed records of your commuting expenses, you can navigate potential changes to the IRS Commuting Rule with confidence and ease.

By understanding the IRS Commuting Rule, complying with its requirements, and staying informed about potential changes, you can keep your mileage deduction compliant in 2024 and beyond. Maintaining accurate records, learning from common misconceptions, and seeking professional advice will all contribute to a successful and hassle-free tax filing experience.

Brad Thibeau

Brad Thibeau is the Head of Partnerships at Everlance, and has held that role since 2021, with a focus on helping self employed people save time and money on their taxes.

• How does Everlance work?

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Everything You Need to Know About IRS Commuting Mileage Rules

Does your line of work require you to spend plenty of time at the wheel? If so, then you should definitely look into getting a driving logbook and leveraging the vehicle logbook method . This method allows you to  claim all car expenses  you incur while on duty.

The IRS has prescribed what needs to be deducted against the taxes upon filing returns. However, many people do not understand the laid down procedures of deducting tax.

Many drivers know that this goose can lay the golden egg but they still don’t use it. “It’s mind-numbingly tedious”  and  “it’s too time-consuming”  are both stock answers you may hear.

IRS commuting mileage rules may be confusing, but we’re ready to help you learn what you need to know about them.

For starters, there’s nothing like a commuting tax deduction. However, there are situations when your drives from home to work and back can become tax deductible.

Before you deduct the mileage from the taxes , you must have sufficient evidence of the mileage log as prescribed by the IRS.

GOFAR offers the best way to log your mileage using a smart mileage tracker application .

This app not only logs your mileage but also finds your car engine’s sweet spot to help you drive efficiently so that you save fuel and reduce wear and tear on your brakes.

Other things that this free and easy-to-install app will help you do include:

• Finding your car’s faults and alerting you in plain English
• Reminding you of the maintenance schedule and insurance premium payments
• Connecting you with the best mechanics and parts supplier in your area (currently available only for Australian users)
• Helping you to drive smarter and spend up to 30% less on fuel

What You’ll Learn

What Is Commuting According to the IRS?

According to the IRS, commuting (p.25) is the transportation between your home and your regular place of work.

Your home, in this case, is the place you live, and your regular place of work is where you earn the majority of your income.

Can You Deduct Mileage to and from the Office?

As a general rule, commuting is not tax deductible . However, you can get around this by turning your home into an office .

Your home will only be regarded as your office by the IRS if you prove that you are a large percentage of your income or you do a majority of your administrative tasks from there.

Note that even if the IRS allows you to log mileage from home to your office, it will only allow you to claim the mileage incurred for business purposes and NOT for personal purposes.

What Is Commuting Deduction?

There is nothing in the IRS tax deduction rules that is called commuting that allows you to ask for a deduction.

You can only deduct mileage for charity, moving or medical purposes or expenses incurred during driving for business purposes .

What Are the Rules that Apply on Commute to Work Mileage?

The following rules have been prescribed by the IRS in regards to the commuting to work mileage deductions .

• The mileage between your home and your primary job location is NOT an allowable deduction.
• If you have a temporary job and its location is different from your principal place of work, the mileage between the home and your temporary job location is tax-deductible. According to the IRS, any job that you engage in for less than one year is temporary.
• If you are out on an off day from your main job, the trip between your home and the second job is not tax deductible.
• Any mileage incurred between your temporary job and your main job is tax deductible.
• The trip between your second job and your main job is an allowable deduction.
• If you have several temporary jobs, and a second job, any trip covered in-between these two locations is an allowable deduction.
• If you turn your home into an office, you can turn your commute drives into business drives which are tax deductible.

Joanne is a marketing professional who lives in downtown Manhattan. If she commutes from her downtown Manhattan apartment to her office, this will NOT be tax deductible.

Also, if she drives from her house to her client’s to make a presentation, she may NOT claim this mileage as a tax deduction as the IRS still considers this as commuting.

But, if she travels from her office to her client’s office to make a speech, she CAN claim this mileage as a tax deduction. For Joanne to make the claims, she must log her mileage properly.

How Can You Tell If a Drive from Home Is Tax Deductible?

The table below from the IRS Publication 463 – Travel, Gift, and Car Expenses outlines the deductible travel expenses: 

Now, let’s get more specific.

Where You Live Is Your Personal Choice.

The IRS considers where you live a personal preference and therefore if you live far from your office, this will be your own expense and it is not an allowable deduction.

When Does Commuting Occur?

According to the IRS commuting mileage rules, commuting occurs when you drive from where you live to your principal place of work which can be either your office or your work site.

Commuting can also occur when you drive from home to a place where you’ve worked before or to a place where you expect to work for more than one year.

Don’t Be Cheeky! It’s Still a Commute.

Even if you drive from home to go and conduct a business, the IRS will still consider this a commute and not a business trip.

How Does the IRS View Haulage of Goods from Home to Office?

If you haul or carry some goods from your home to your office, the IRS might be persuaded to consider this a business drive.

In such a situation, the mileage deduction will include the cost of renting the trailer and all the other expenses relating to the haulage of goods.

How Does IRS View Working During a Commute?

Even if you make business calls or listen to work-related seminars or reply to emails during your commute to work, the IRS will still consider this a commute and NOT a business drive.

How Does the IRS View Advertising on Your Car?

Just because you have some advertising on your car, it doesn’t convert the mileage you take from home to your office into a business drive. The IRS will still consider this a commute, and hence it is NOT tax deductible.

Watch Out for Inaccurate Mileage Logging

A word of advice any accountant would give you is to do your best to keep a current, accurate, and valid logbook. Know the IRS rules when claiming your car expenses. You’ll be doing yourself a huge favour .

Otherwise, you’re making yourself  an easy target for the authorities . They have raised the bar when it comes to tax return auditing . Sophisticated new methods have made spotting a fraudulent claim a no-brainer.

You don’t even need the worst-case scenario.  Enough damage is done if your claim is rejected .

Below are some cases of irregular or fraudulent logbooks , so you know what to steer clear of:

• A taxpayer completed the logbook on the same day using different colour pens.
• The logbook wasn’t representative of the usual business/private percentage.
• A taxpayer claimed business mileage for private trips.

What Are the General Rules about Commuting?

Although it is tough for you to determine which drive from home to office is tax deductible, there are some general rules that you can use to determine whether your trip will be an allowable deduction .

• Commuting is NOT considered an allowable tax deduction.
• Working during your commute to work will NOT turn your trip into a business drive, hence it is not tax deductible.
• If you create a home office and can prove that you earn the majority of your income and do most of your administrative work from there, you can nullify the IRS commuting rule .
• Any drive between your home and a temporary place of work IS tax deductible.

To make sure you  log all your mileage correctly and stay away from trouble with the IRS tax authorities , consider getting a mileage tracking device .

Paired with a free app, it will keep your records impeccable and help you avoid confusion and hassle around the tricky IRS commuting mileage rules.

Danny Adams

Co-founder of GOFAR and with a Computer Science background from Harvard University, and a Bachelor of Aerospace, Aeronautical & Astronautical Engineering (Honours), UNSW. I want to transform data from cars into useful services so -> drivers save time & money -> emissions fall -> Australian roads are safer. So we built an ATO-compliant logbook app called GOFAR . I write to help you understand how to use GOFAR to maximise business travel . Reach out via [email protected] .

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What Are Transportation Expenses?

• How They Work

Special Considerations

• Supply Chain

Transportation Expenses: Definition, How They Work, and Taxation

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas' experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.

The term transportation expense refers to specific costs incurred by an employee or self-employed taxpayer who travels for business purposes. Transportation expenses are a subset of travel expenses, which include all of the costs associated with business travel such as taxi fare, fuel, parking fees, lodging, meals, tips, cleaning, shipping, and telephone charges that employees may incur and claim for reimbursement from their employers. Some transportation expenses may be eligible for a tax deduction on an employee's tax return .

Key Takeaways

• Transportation expenses are a subset of travel expenses that refer specifically to the cost of business transportation by car, plane, train, etc.
• Expenses such as fuel, parking fees, lodging, meals, and telephone charges incurred by employees can be claimed as transportation expenses.
• These expenses may be deducted for tax purposes subject to the appropriate restrictions and guidelines.

How Transportation Expenses Work

Transportation expenses are any costs related to business travel by company employees. An employee who travels for a business trip is generally able to claim the cost of travel, hotel, food, and any other related expense as a transportation expense. These costs may also include those associated with traveling to a temporary workplace from home under some circumstances. For instance, an employee whose travel area is not limited to their tax home can generally claim that travel as a transportation expense.

These expenses, though, are narrower in scope. They only refer to the use of or cost of maintaining a car used for business or transport by rail, air, bus, taxi, or any other means of conveyance for business purposes. These expenses may also refer to deductions for businesses and self-employed individuals when filing tax returns . Commuting to and from the office, however, does not count as a transportation expense.

The cost of commuting is not considered a deductible transportation expense.

Transportation expenses may only qualify for tax deductions if they are directly related to the primary business for which an individual works. For example, if a traveler works in the same business or trade at one or more regular work locations that are away from home such as a construction worker, it is considered a transportation expense.

Similarly, if a traveler has no set workplace but mostly works in the same metropolitan area they live in, they may claim a travel expense if they travel to a worksite outside of their metro area. On the other hand, claiming transportation costs when you have not actually done any traveling for the business is not allowed and can be viewed as a form of tax fraud .

Taxpayers must keep good records in order to claim travel expenses. Receipts and other evidence must be submitted when claiming travel-related reimbursable or tax-deductible expenses.

According to the Internal Revenue Service (IRS) travel or transportation expenses are defined as being: "...the ordinary and necessary expenses of traveling away from home for your business, profession, or job." And it further defines "traveling away from home" as duties that "...require you to be away from the general area of your tax home substantially longer than an ordinary day's work, and you need to sleep or rest to meet the demands of your work while away from home."

The IRS provides guidelines for transportation expenses, deductibility, depreciation, conditions, exceptions , reimbursement rates, and more in Publication 463 . The publication sets the per-mile reimbursement rate for operating your personal car for business. Travelers who use their vehicles for work can claim 58.5 cents per mile for the 2022 tax year , increasing to 62.5 cents for the remaining six months. That's up from 56 cents eligible for 2021. The IRS' determined rate treated as  depreciation  for the business standard mileage is 26 cents as of Jan. 1, 2021.

Internal Revenue Service. " Topic No. 511 Business Travel Expenses ."

Internal Revenue Service. " 2022 Standard Mileage Rates ," Pages 3-4.

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Temporary Work Locations & Commuting Expenses Tax Deductions

by Team Falcon · Published · Updated

Table of Contents

What does the IRS consider a temporary work location and how does this impact commuting expenses write offs? Read to find out.

Many people, particularly self-employed individuals, and independent contractors take jobs that last only a short period of time. These jobs could also be called temporary work. In addition, for some of these temporary jobs, the worker is required to commute to a temporary work location. And the expenses of this work commute can add up. Therefore, many tempory workers wonder, are commuting expenses a tax write-off?

Read this article to learn how the IRS defines a temporary work location, and how to determine if your temporary work location commuting expenses are a tax write-off.

How does the IRS define a temporary work location?

The IRS defines a temporary work location as a work location expected to last for less than a year. For example, an employee’s or contractor’s commute between their home and regular work location is not a deductible business expense.

Daily round-trip commute expenses are tax-deductible, regardless of the distance, if the work location is temporary then the

Factors that Determine a Temporary Work Location

Temporary employment isn’t considered temporary for work locations if it’s expected to last longer than one year. Also, temporary employment is not considered temporary if it was initially planned to last less than a year but ended up lasting longer than a year. Therefore, in this case, the commuting expenses are not deductible. For example, an individual accepts an offer for a new full-time job but resigns within the first year of employment.

Also, a work location is not considered temporary if the employment was initially expected to last less than a year and at a later date was expected to last more than a year. Further, once it is realized that the employment will last longer than a year the work location is no longer considered temporary.

What does the IRS consider commuting expenses?

The IRS defines a commute as ‘transportation between your home and your regular place of work’. Please review this article for more detailed information on commuting expenses, How Does the IRS Define Commuting? .

What if I have more than one work location?

If the employee works between two or more work locations the commuting expenses between the two work locations are deductible. Also true for someone employed by two different employers. In the event that the commuter does not go directly from one location to the other, only the amount of the commuting expense is deduct ible.

No Ordinary Place of Work

Many workers have no ordinary place to work. Meaning, they don’t have a regular office that they go to on a daily basis, Monday through Friday. Instead, these workers are traveling around to different work locations throughout the day and throughout the week.

What commuting expenses are tax-deductible if you travel to different work locations for work? Commuting expenses aren’t deductible if the job requires you to travel to different workplaces around the city where you live. However, if the commuting requires the taxpayer to travel outside of their metropolitan area, then these commuting expenses are deductible. For information about what qualifies as “Away From Home”, review the post, IRS Business Travel Definition for “Away From Home” .

Temporary Work Location vs Travel

Transportation is a travel expense if the temporary work location is outside of the area where the taxpayer lives and it involves overnight stay. A travel expense is not a temporary work location commuting expense.

Therefore, expenses, in this case, deductible business travel expenses instead of commute expenses. For more information on business travel expenses please review the following post, What Qualifies as Tax Deductible Business Travel Expenses .

How do I track of mileage expense write offs?

• Odometer Log Enter the start and end odometer readings of your business transportation, Falcon Expenses calculates miles driven and expense reimbursement amount using the custom reimbursement rate set in the app. Check out this article for more information, Falcon Expenses Odometer Log Feature .
• Start and End Trip Addresses Enter start and end address for a tax deductible commute or transportation, Falcon Expenses calculates the number of miles driven and the expense reimbursement amount. Check out this article for more information, Falcon Expenses Addresses Feature .
• GPS Mileage Tracker Use an integrated GPS tracker to track tax deductible business transportation miles while you are driving. Falcon Expenses will calculate the deductible mileage expense amount for your when the trip is complete. Check out this article for more information, Falcon Expenses GPS Tracker .

About Falcon Expenses

Falcon Expenses is a top-rated mobile application for self-employed and small businesses to track expenses and tax deductions. Falcon customers record $6,600, on average, in annual tax deductions. Start today. The longer you wait the more tax deductions you miss out on.

Automatically track mileage expenses and expenses, keep an odometer log, receipt vault and log billable hours. Quickly organize expenses by time period, project, or client. Easily prepare reports to email to anyone in PDF or spreadsheet formats, all from your phone. Use for keeping track of tax deductions, reimbursements, taxes, record keeping, and more. Falcon Expenses is great for self-employed, freelancers, realtors, business travelers, truckers, and more.

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Tags: Away From Home Business Expenses Business Tax Deductions Business Transportation Expenses Contractor Expenses Freelancer Independent Contractor Self Employed Temporary Work Location

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Irs commuting rule: mileage rules & commute definition.

If you drive your car for work, you can take a mileage deduction on your taxes. Yet, many people don’t know the IRS has some strict rules on what is deductible business driving. There’s no such thing as a “commuting to work tax deduction.” But there are circumstances where your drive from home could be tax deductible. Learn about the IRS commuting rule.

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IRS Commuting Rule: Commute Definition

The IRS defines your commute as “transportation between your home and your main or regular place of work.” Your “home” is the place where you reside.

Your trip between your home and your regular or main job is never deductible. A trip between your home and temporary work location is deductible if your main job is at another location. Your commute between home and second job is never deductible on a day off from your main job. Your trip between your regular job and temporary job is always deductible. Likewise, so are trips between your main and second job. You can always deduct drives between temporary work locations and a second job.

Example: Ryan is a real estate agent in the Denver area. When he drives from his house to his office, those trips are not deductible. But he can deduct trips from his house to open houses or drives from his office to meet clients. Of course, Ryan must keep track of his miles in order to back up his deduction.

How To Know If Driving From Home is Tax Deductible

The basic rule that the IRS follows is that commuting is a personal expense that is never deductible. Commuting occurs when you go from home to a permanent work location—either your:

• office or other principal place of business, or
• another place where you have worked or expect to work for more than one year.

Example: Kim runs her business from an office in a downtown office building. Every day, she drives 20 miles from her suburban home to her office and back. None of this commuting mileage is deductible.

It is still considered commuting even if a trip from home has a specific business purpose. If you need to haul inventory or supplies from your home, some of those costs are deductible. This could include the costs of renting a trailer or other equipment.

You can’t deduct a commuting trip because you work during the trip. Making business calls or listening to work-related tapes won’t cut it. Having advertising on your vehicle won’t convert a commute into a business trip either.

The Commuting to Work Tax Deduction

The IRS commuting rule makes it tougher to figure out which drives from home are deductible. Here are some of the opportunities for small business owners to maximize their tax deductions:

• Commuting is never deductible
• Working during your commute doesn’t make your trip deductible
• A qualifying home office can nullify the commuting rule
• Travel between home and a temporary work location is deductible.

Commuting to Work Tax Deduction: Made Possible with a Home Office

One way to avoid the harsh IRS commuting rule is to have a qualifying home office. In this event, you can deduct the cost of any trips you make from your home office to another business location. The commuting rule doesn’t apply if you work at home because you never commute to work. With a qualifying home office, you’re already at your work.

Your home office will qualify as your principal place of business
 if it is the place where you earn most of your income or perform the administrative or management tasks for your practice. You can increase your deductions for business trips with a qualifying home office.

Example: Kim maintains a home office where she does the administrative work for her business. She also has an outside office where she does her other work. She can deduct all her business trips from her home office. This includes the 20-mile daily trip to her outside office. Thanks to her home office, she can now deduct 100 miles per week as a business trip expense. This was a nondeductible commuting expense before she established her home office.

How About a Temporary Work Location?

The IRS commuting rule also doesn’t apply when you travel between your home and a temporary work location. A temporary work location is any place where you realistically expect to work less than one year. It can be inside or outside of the metropolitan area where you live.

Example: Sally has an office in a downtown office building; she does not have a home office. Acme Corp. hired her to perform consulting work. This requires that she drive to Acme’s offices, 10 miles away from her home. The project is expected to last three months. Sally may deduct the cost of driving from home to Acme Corporation’s offices.

Temporary work locations are not limited to clients’ offices. Any place where you perform business-related tasks for less than one year is a temporary work location. Stopping at a temporary work location converts the entire trip into a deductible travel expense.

Example: Eleanor’s business office is in a downtown building. She has no home office. One morning, she leaves home, stops at a client’s office to drop off some work, and then goes to her office. The entire trip is deductible because she stopped at a temporary work location on her way to her office.

Once you’re sure your drives from home are deductible, be sure to track all your miles. Without an accurate mileage log, the IRS can reject your mileage deduction—even if you have the right to take a commuting to work tax deduction.

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3 comments on “ IRS Commuting Rule: Mileage Rules & Commute Definition ”

My husband and I claim our 18 year-old daughter as our dependent because she is a full-time student. She has a part-time job as a nanny. She has all the appropriate withholding taxes taken out of her paycheck. However, part of her responsibilities is driving the kids to and from various places in her car. Is there any way for her (or us) to deduct her mileage?

I forwarded your question to our tax experts and this is the response I received.

“Your daughter will remain a dependent on your return as long as she is a full time student in the tax year you are filing and under 24 years old. You receive your daughters exemption on your tax return. Your daughter will file a tax return checking the box on Form 1040EZ “someone can claim you as a dependent “. The instructions will allow your daughter a standard deduction but no exemption deduction for your daughter on her tax return. Because your daughter has an intact standard deduction the employee business expense for driving as a nanny will most likely not exceed the standard deduction. Your daughter may want to ask her employer for a tax free reimbursement for her car expenses. Standard mileage can be reimbursement up to 53.5 in 2017 tax free to your daughter and with no employer taxes to her employer. You also may want to check with your insurance agent about your daughters extra driving and passengers to make sure no extra coverage is needed.”

https://www.taxconnections.com/taxQuestions/My-husband-and-I-claim-our-18-year-old-daughter-as-our-dependent-because-she-is-/1514

If you have any further questions, feel free to visit our website and ask questions to our tax experts at https://www.taxconnections.com/taxQuestions

GrEAt post. Thank you! #EnrolledAgent

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7 Rules You Should Know About Deducting Business Travel Expenses

• What Is Your "Tax Home"?

Charges on Your Hotel Bill

The 50% rule for meals, the cost of bringing a spouse, friend or employee.

• Using Per Diems To Calculate Employee Travel Costs

Combined Business/Personal Trips

International business travel.

• The Cost of a Cruise (Within Limits)

Frequently Asked Questions (FAQs)

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The IRS has a specific definition for business travel when it comes to determining whether these expenses are tax deductible. The agency says business travel is travel that takes you away from your tax home and is "substantially longer than an ordinary day's work." It requires that you sleep or rest while you're away from home, and that you do so. The travel must be "temporary." This means it can't last a year or more.

Key Takeaways

• You can deduct expenses that take you away from your tax home for a period of time that would require you to spend the night.
• Your tax home is the city or area where your regular place of business is located.
• You’re limited to 50% of the cost of your meals.
• Your trip must be entirely business-related for costs to be deductible, but special rules apply if you travel outside the U.S.

What Is Your "Tax Home"?

Your tax home is a concept set by the IRS to help determine whether a trip is tax deductible. It's defined by the IRS as the entire city or general area where your regular place of business is located. It's not necessarily the area where you live. 

Your tax home can be used to determine whether your business travel expenses are deductible after you've determined where it's located. You can probably count your expenses during travel as business deductions if you have to leave your tax home overnight or if you otherwise need time to rest and sleep while you're away.

Check with a tax professional to make sure you're accurately identifying the location of your tax home.

Charges for your room and associated tax are deductible, as are laundry expenses and charges for phone calls or for use of a fax machine. Tips are deductible as well. But additional personal charges, such as gym fees or fees for movies or games aren't deductible.

You can deduct the cost of meals while you're traveling, but entertainment expenses are no longer deductible and you can't deduct "lavish or extravagant" meals. 

Meal costs are deductible at 50%. The 50% limit also applies to taxes and tips. You can use either your actual costs or a standard meal allowance to take a meal cost deduction, as long as it doesn't exceed the 50% limit.

The cost of bringing a spouse, child, or anyone else along on a business trip is considered a personal expense and isn't deductible. But you may be able to deduct travel expenses for the individual if:

• The person is an employee
• They have a bona fide business purpose for traveling with you
• They would otherwise be allowed to deduct travel expenses

You may be able to deduct the cost of a companion's travel if you can prove that the other person is employed by the business and is performing substantial business-related tasks while on the trip. This may include taking minutes at meetings or meeting with business clients.

Using Per Diems To Calculate Employee Travel Costs 

The term "per diem" means "per day." Per diems are amounts that are considered reasonable for daily meals and miscellaneous expenses while traveling. 

Per diem rates are set for U.S. and overseas travel, and the rates differ depending on the area. They're higher in larger U.S. cities than for sections of the country outside larger metropolitan areas. Companies can set their own per diem rates, but most businesses use the rates set by the U.S. government.

Per diem reimbursements aren't taxable unless they're greater than the maximum rate set by the General Service Administration. The excess is taxable to the employee.

If you don't spend all your time on business activities during an international trip, you can only deduct the business portion of getting to and from the destination. You must allocate costs between business and personal activities.

Your trip must be entirely business-related for you to take deductions for travel costs if you remain in the U.S., but some "incidental" personal time is okay. It would be incidental to the main purpose of your trip if you travel to Dallas for business and you spend an evening with family in the area while you're there. 

But attempting to turn a personal trip into a business trip won't work unless the trip is substantially for business purposes. The IRS indicates that “the scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip."

The rules are different if part or all of your trip takes you outside the U.S. Your international travel may be considered business-related if you were outside the U.S. for more than a week and less than 25% of the time was spent on personal activities. 

You can deduct the costs of your entire trip if it takes you outside the U.S. and you spend the entire time on business activities, but you must have "substantial control" over the itinerary. An employee traveling with you wouldn't have control over the trip, but you would as the business owner would.

 The trip may be considered entirely for business if you spend less than 25% of the time on personal activities if your trip takes you outside the U.S. for more than a week.

You can only deduct the business portion of getting to and from the destination if you don't spend all your time on business activities during an international trip. You must allocate costs between your business and personal activities.

The Cost of a Cruise (Within Limits) 

The cost of a cruise may be deductible up to the specified limit determined by the IRS, which is $2,000 per year as of 2022.  You must be able to show that the cruise was directly related to a business event, such as a business meeting or board of directors meeting.

The IRS imposes specific additional strict requirements for deducting cruise travel as a business expense.

How do you write off business travel expenses?

Business travel expenses are entered on Schedule C if you're self-employed . The schedule is filed along with your Form 1040 tax return. It lists all your business income, then you can subtract the cost of your business travel and other business deductions you qualify for to arrive at your taxable income.

What are standard business travel expenses?

Standard business travel expenses include lodging, food, transportation costs , shipping of baggage and/or work items, laundry and dry cleaning, communication costs, and tips. But numerous rules apply so check with a tax professional before you claim them.

The Bottom Line

These tax deduction regulations are complicated, and there are many qualifications and exceptions. Consult with your tax and legal professionals before taking actions that could affect your business. 

IRS. " Topic No. 511: Business Travel Expenses ."

IRS. " Publication 463 (2021), Travel, Gift, and Car Expenses ."

IRS. " Here’s What Taxpayers Need To Know About Business-Related Travel Deductions ."

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Employee Tax Deduction of Travel Expenses for Commuting

Published: March 10, 2020

Last Updated: October 21, 2022

As a general rule, you may not deduct expenses from employment income except for certain employment – related expenses that are specifically allowed. One example of such an allowable deduction is the motor vehicle travel expense in a limited number of situations. An employee who is ordinarily required to perform their work away from the employer’s place of business or who is “on the road” for work at all times and is required to use a vehicle can use the travel expenses incurred as a deduction against employment income. The employer must complete Form T2200 “Declaration of Conditions of Employment” in order for the employee to be able to deduct employment expenses from his/her income.

In general, motor vehicle expenses can only be claimed as expenses related to “on the job” travel. If you drive from your home to your place of employment and then back home, you may not claim the travel costs associated with that commute. This is because Canada Revenue Agency (“CRA”) regards this use as a personal use of your motor vehicle. However, if you are required by your employer to take your motor vehicle to work and would have taken a less expensive means of transport to work had it not been for your employer’s requirement, you may be eligible to claim the costs associated with your commute to work as a deduction on your income tax return.

In the Tax Court of Canada decision of Tolson v. HMQ [2007TCC661], the taxpayer was required to travel for employment related purposes and his employer gave him two vehicle allowances – a per kilometre allowance and a fixed allowance. When claiming motor vehicle expenses, the taxpayer included the expenses associated with his daily 30-kilometre drive between his residence and his office. The taxpayer justified this by stating that the only reason he took his motor vehicle to work was because his employer required him to do so. If it had not been for his employer’s requirement, he would have carpooled or taken public transportation. The Minister denied the deduction on the basis that traveling to and from work was personal use of a motor vehicle. In addition, although the taxpayer was entitled to claim a per kilometre allowance, he did not do so. Therefore the Minister presumed that the taxpayer did not use the vehicle for employment-related purposes and denied all motor vehicle expenses.

Justice Sheridan found that the taxpayer was required to have his motor vehicle available at the office and that the only way that requirement could be satisfied was to drive it to work each day. Although counsel for the Crown suggested that the taxpayer should have left his vehicle permanently parked at the office, the judge stated that this would have deprived the taxpayer of all personal use of his vehicle and that such deprivation would be unreasonable. Therefore, the taxpayer was allowed to claim the deduction for the travel expenses associated with his commute to and from work. The taxpayer was also permitted to claim his “on the job” travel expenses despite the fact that he did not claim the per kilometre travel allowance.

Related Post

Disclaimer:.

"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."

About the Author

David j. rotfleisch.

David J. Rotfleisch, a leading Canadian tax lawyer, is not only a certified specialist in taxation but also a chartered professional accountant. Most recently, David is a pioneer in Canadian crypto taxation.

As of April 2020, he was one of 12 Ontario Certified Specialists In Taxation™.

Frequently Asked Questions

How much can i claim for travel expenses without receipts.

You cannot claim any expenses without receipts. If you have receipts then you can claim business-related travel expenses except for regular commuting to and from your place of employment. You can also potentially claim for 50% of the cost of some of the meals you eat while travelling for business. Your tax lawyer or accountant will explain which ones you can claim for.

What if I get audited and don't have receipts?

If you get audited by the CRA and don’t have receipts, you will lose your deductions. There are no exceptions to this. No receipt means no deduction. Unfortunately, credit card and bank statements are not accepted as proof of expenditure. However, certain taxpayers may be able to claim some of their vehicle and meal expenses by using the simplified method.

What is the maximum I can claim on tax without receipts?

The maximum you can claim on tax without receipts is zero. The CRA only accepts deductions if you produce the original receipts or invoices. If you have lost some, you could try contacting the seller and asking for a duplicate. You need to hang onto your receipts for a minimum of 6 years because you could be audited at any time during that period.

One exception to this is work-from-home expenses during the 2020, 2021, and 2022 tax years which can be claimed using a temporary flat-rate. The flat rate is $2 for each day you worked at home due to COVID-19 to a maximum of $500 or 250 working days.

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The rules on travel and subsistence: a long and winding road

Employment tax.

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As our working patterns shift and more of us move to hybrid working, what impact will this have on claiming tax relief for travel and subsistence expenses?

What is the issue?

While travel and subsistence is an area of compliance that seems straightforward on the face of it, it can actually be extremely complex for employers to understand and get right.

What does it mean for me?

Key considerations include rules concerning permanent and temporary workplaces, ordinary commuting and working from home. Make sure your policies are clear on what travel and subsistence expenses employees can claim.

What can I take away?

With the move to widespread hybrid working, we expect to see HMRC increasing its focus on these types of travel and subsistence expenses.

The coronavirus pandemic has significantly changed the way we work. Homeworking has become the norm for many more employees who previously spent all or almost all of their time in offices. Millions of us are now working from home for two or three days each week and spending the rest of the working week in the office. Homeworking and hybrid working appear to be here to stay.

That all sounds familiar and straightforward but the nub of the problem is that, for travel and subsistence expenses, even though more employees work remotely and/or are much more mobile than they used to be, the current tax rules covering employee travel and subsistence have not changed substantively since April 1998.

It was widely hoped back in 2016, when the last review of the travel and subsistence rules took place, that some of the shortcomings in the rules might be addressed. But the fact they were not should come as no real surprise, as the 1998 amendment itself aimed to change rules that had dated back some 140 years.

While travel and subsistence is an area of compliance that seems straightforward on the face of it, it can actually be extremely complex for employers to understand and get right. It is no coincidence that HMRC has issued a guidance booklet with over 70 pages to help explain the rules, and that it focuses on travel and subsistence during its reviews of employer records. 

In the past, HMRC has undertaken detailed reviews of situations where employees have a workplace at home but also another elsewhere (such as their employer’s headquarters) and the employer meets the cost of journeys between their home and the other workplace; or where the employer is paying travel and subsistence expenses for what they believe is a move covered under the ‘detached duty’ rules allowing for the amounts to be paid tax free. With the move to widespread hybrid working, we expect to see HMRC increasing its focus on these types of travel and subsistence expenses.

Within the current system, there are two main things to bear in mind relating to travel and subsistence.

The first (under the Income Tax (Earnings and Pensions) Act (ITEPA) 2003 s 337) is that tax relief is provided for ‘travel in the performance of the duties of the employment’. In other words, relief is given for travel that is an intrinsic part of an employee’s job and may include journeys between two workplaces. This rule is generally well understood by employers and often applied correctly in practice, but this could change going forward as more employees work from home and employers incorrectly conclude that their employees’ homes are workplaces for tax purposes.

However, it is in relation to the second rule (under ITEPA 2003 s 338) – which provides tax relief for necessary journeys to workplaces that employees must attend for work purposes, apart from those amounting to ‘ordinary commuting’ – that problems most often arise.

Key terms and considerations

The key terms and considerations needed to understand the rules are summarised below. Note that the rules for subsistence are similar to those for travel. If a business journey is allowable for tax purposes, the subsistence cost attributable to that journey generally is also allowable, unless there are issues around excessive expenditure, dual-purpose trips, and round sum or benchmark allowances.

Travel and subsistence expenses which attract tax relief and satisfy the exemption for paid or reimbursed expenses (ITEPA 2003 s 289A) do not need to be reported to HMRC.

Any travel expenses paid by the employer which do not attract tax relief, and which are not exempted by ITEPA 2003 s 289A, will (depending on the circumstances and subject to a PAYE Settlement Agreement being in place to cover such costs) either need to be:

• reported and dealt with at the tax year-end on forms P11D and P11D(b);
• reported and subjected to tax and Class 1 National Insurance Contributions (NIC) under PAYE at the time of payment; or
• reported and dealt with at the tax year-end on forms P11D for tax purposes and subjected to Class 1 NIC under PAYE at the time of payment.

HMRC penalties for non-compliance can be costly. For example, if incorrect P11Ds are filed negligently, a penalty of up to £3,000 per form can be levied by HMRC (although normally only in the most serious cases).

It could also mean that employers are liable for any tax and NIC that has been underpaid, potentially on a grossed-up basis, plus late payment interest. This can get expensive and large settlements have been seen on HMRC compliance reviews covering travel and subsistence expenses, particularly for large businesses. Settlements are often in relation to homeworkers having another permanent workplace and being paid for their travel expenses between their homes and those permanent workplaces; and travel from home to places which are not considered to be a temporary workplace.

1. Permanent workplace

A ‘permanent workplace’ is considered to be somewhere that an employee works regularly to perform their duties of employment. In many instances, it can be clear whether or not somewhere is an employee’s permanent workplace and, therefore, whether a journey to it can be deemed ordinary commuting. It is also possible for an employee to have more than one permanent workplace at the same time.

Travel to or from a permanent workplace and an employee’s home is generally treated as private rather than business travel, and so tax relief is not due on any related costs that are paid or reimbursed by an individual’s employer.

Necessary travel which takes place between one permanent workplace and another while an employee performs their duties of employment during the working day is treated as business travel and attracts tax relief.

2. Temporary workplace

A ‘temporary workplace’ is somewhere the employee attends to perform a task of limited duration or for a temporary purpose. So even if they attend it regularly, it may still not be classed as a permanent workplace.

There is, however, a special rule which treats a workplace that would otherwise be a temporary workplace as a permanent workplace, where an employee spends or is likely to spend more than 40% of their working time at that workplace over a period that lasts or is likely to last more than 24 months (known as the ‘24 month/40% rule’).  

Bear in mind that the 24 month/40% rule treats locations that would otherwise be ‘temporary workplaces’ as ‘permanent workplaces’. If the workplace is not temporary in the first place (as it does not meet the definition laid out in the Employment Income Manual at EIM32075), the workplace would already be treated as a permanent workplace.

Travel to or from a temporary workplace and an employee’s home is generally treated as business rather than private travel; and so tax relief is due on any related costs that are paid or reimbursed by an individual’s employer, unless it is substantially the same journey in which case no deduction is allowable (ITEPA 2003 s 338(2)). This is not often considered by employers and very few expenses policies ever have this covered.

Such distinctions can be confusing – and as highlighted above, this is one of the areas of travel and subsistence on which HMRC focuses its attention. Employers often fail to consider the task involved or the purpose for working at a given location, which is what the legislation requires.

The employee’s attendance is not in question; the issue is whether the task itself will be undertaken for a limited duration or whether it is performed for a temporary purpose. The trouble is that many employers fail to look too deeply at the matter and simply consider the ‘24 month/40%’ rule, without first considering whether the workplace is capable of being a temporary workplace.

HMRC may ask for contracts, diaries and job descriptions in order to determine whether the locations visited meet the definition of a ‘temporary workplace’. Covid-19 has also presented a particular issue in that HMRC’s view is that the clock remained ticking even when government gave instructions to work from home where possible, so many employers are likely to find the 24 month period has expired during the last few years while employees have been working from their homes.

It should also be remembered that the word ‘task’ is not defined in the legislation. As a result, the normal dictionary definition applies. Here a ‘task’ is something specific; for example, a piece of work, rather than a group of things to do, which is the nature of a job more generally.

3. Ordinary commuting

For most employees, ‘ordinary commuting’ is the journey they make most days between their home and permanent workplace. Travel and subsistence expenses would normally be taxable here if the costs of ordinary commuting were paid for or reimbursed by their employer, or if travel facilities were provided.

But for some staff, the situation is more complicated. For example, if the journey to a temporary location is broadly the same as an employee’s ordinary commute to their permanent workplace, tax relief would be denied on the basis that the journey is normally treated as private travel.

This rule applies generally if the journey is in the same direction or on the same route, and amounts to less than 10 miles extra each way than the normal commute. This area is rarely explained in most employers’ travel and expenses policies but is again something that HMRC is increasingly focusing its energy on, particularly in major towns and cities.

4. Working from home

A key consideration when moving to a homeworking arrangement is whether the employer will meet the cost of the employee’s travel between their home and the office when they do travel into the office. This is of particular relevance to hybrid working arrangements.

The tax and NIC treatment of employees’ travel expenses can be complex and is particularly difficult to apply practically to modern working practices, such as hybrid working.

HMRC recently updated its guidance covering employees who work from home (EIM01471) to cover hybrid working. It now includes ‘Travel in the performance of the duties: travel to and from home where it is a place of work’ at EIM32370. The clear challenge with hybrid working is that when employees do travel into the office, often the statutory conditions in ITEPA 2003 s 337 will not be met for home to be a workplace for tax purposes, and under ITEPA 2003 s 338 the office will remain a permanent workplace.

Employers must therefore be clear when agreeing hybrid or homeworking arrangements which travel and subsistence expenses can be paid tax and NIC free and which cannot. EIM32174 covers ‘Travel for necessary attendance: employees who work at home: a hybrid working: example’.

In rare cases, ITEPA 2003 s 337 may apply, allowing for tax relief between the home (as a workplace) and another permanent workplace, as covered in EIM32370. The problem with applying ITEPA 2003 s 337 to hybrid working is that in many cases the location of the home isn’t dictated by the requirements of the job. HMRC notes: ‘For most people, the place where they live is a matter of personal choice. So the expense of travelling from home to any other place is a consequence of that personal choice, not an objective requirement of their job.’ The relief in ITEPA 2003 s 337 is therefore unlikely to apply to the majority of homeworking and hybrid working arrangements. It is worth noting that HMRC’s guidance says:

‘Most employers provide all the facilities necessary for work to be carried out at their business premises. So where employees work at home, they usually do so because it is convenient rather than because the nature of the job actually requires them to carry out the duties of their employment there. However, where it is an objective requirement of an employee’s duties to carry out substantive duties at the home address, then his or her home is a workplace for tax purposes.’

ITEPA 2003 s 338 then needs to be considered. This allows tax relief for travel expenses for the necessary attendance at any place in the performance of the duties of employment. To determine whether tax relief is due under s 338 for journeys between an employee’s home and their employer’s business premises, we need to consider whether the employee is travelling to a permanent or temporary workplace (see definitions above).

HMRC often quotes the case of Kirkwood v Evans [2002] EWHC 30 when looking at a ‘working from home’ situation. It concluded that although Mr Evans went to the Leeds office for only one day a week, it was a permanent and continuing part of his duties to do so. The judgment dealt with the situation briefly in a single paragraph, also stating that Mr Evans had conceded that the Leeds office was not his temporary workplace, even though the General Commissioners had concluded it was. The judge justified this view by saying: ‘This attendance was both regular and was not for the purpose of performing a task of limited duration or for some other temporary purpose.’

Perhaps Mr Evans was ill-advised to admit that Leeds was a permanent workplace. It could be argued that he undertook certain specific tasks each time he went there that were of limited duration; namely, delivering work he had performed since his last visit, taking new work with him, and downloading information from a database. On the other hand, HMRC seemed to argue that the word ‘task’ refers to doing these things each week on a continual basis.

There are, of course, also other special rules to consider on top of the above that cover areas relating to international trips, area-based and depot-based employees together with emergency call-outs.

Business Miles vs. Commuting Miles: What's the Difference?

When not hanging out with his high profile friends like Gandhi or Batman, Robby enjoys spending time with his wife and children. He can sneeze with his eyes open, has won two lifetime achievement awards, and has visited every country; three of which haven't been discovered yet. He is also a Certified Public Accountant and assists clients with a wide variety of accounting and tax issues.

If you're a freelancer or independent contractor who sometimes drives for work, the miles you log can help you save a lot on your taxes.

That's right — when you're driving and blaring music out of your stereo (or listening to the latest true crime podcast), you're doing something that can bring your tax bill way down.

There's just one thing to keep in mind: not every mile you drive is tax-deductible. Business miles count, while commuting miles don't. Let's get into the difference between the two.

What are business miles?

The IRS lets self-employed people claim car-related tax write-offs based on the business miles they drive every year.

What counts as a business mile? The definition is more expansive than most people realize. It doesn't just cover rideshare and delivery drivers carrying passengers or takeout, for example.

In simple terms, any time you drive from one place of work to another, that's a business mile. 

You can be traveling between worksites and meeting locations, of course. But it also counts if you head out for a business lunch, or make a run to the post office to send or receive a package for work. 

What are commuting miles?

Unlike business miles, what the IRS considers "commuting miles" aren't tax-deductible. 

If a business mile takes you from one workplace to another, a commuting mile takes you between your home and a workplace. Driving between your house and an office building, for example, would be considered commuting.

How commuting miles work with a home office

Now you're probably thinking, "What if my place of work is a home office ?"

If we followed the IRS rules in this instance, then your commute from the bed to the laptop would be your first trip to work. And then, your first trip of the day — to McDonald's for the 20-nugget combo — would count as a business trip, right?

Wrong. If you're a home-based independent contractor, then applying the rules as they are to you would be unfair to people who work out of separate business offices. After all, they don't get a mileage reimbursement when they leave home.

So if you want to get some business mileage out of a trip from home, go to a temporary work location first — like a client meeting site. Then you can go grab some nuggets with Szechuan sauce.

How business vs. commuting miles work

Let's use an easy example to get a base understanding of how these two types of mileage work.

Say that you have your own small business office two miles away from your home. You drive to and from this office every day. Then, once a week, you leave this office and drive five miles away to meet with a client.

On the day you have your client meeting, you'll have driven fourteen total miles: two miles to the office, five miles to meet your client, five miles back to the office, and then two miles home.

According to the IRS mileage rules, your drive to the office and back home from your office are commuting miles, so they're not tax-deductible. 

Now, what about your client meeting? Those miles would be considered a business trip, and would be tax-deductible. Since you had to leave your primary business location to meet with your client, those miles qualify as business miles. 

The two ways to deduct business mileage

Once you've figured out how many business miles you're driving, the IRS gives you two ways to expense the business use of your vehicle. You can deduct a standard mileage rate, or write off your actual vehicle expenses. 

The standard mileage rate

This method tends to work best for independent contractors who rack up a lot of business miles in a tax year, like Uber and Lyft drivers and DoorDashers.

Each year, the IRS lets you write off a standard amount for each business mile you drive. In 2023, the standard mileage allowance is $0.655. For 2024, it will increase to $0.67.

Car write-offs you can take on top of mileage

This standard rate includes car-related costs you'd otherwise be able to write off separately, like gas and vehicle depreciation. However, there are some driving expenses you can write off on top of the standard mileage rate, including:

• 🅿️ Parking fees
• 🧽 Car washes

That means you won't be entirely off the hook when it comes to tracking expenses. An app like Keeper can help: it'll scan all your purchases for those purchases, so you won't have to manually keep track of your write-offs.

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The IRS has some additional restrictions on using the standard mileage rate:

• You can't operate five or more cars at the same time (a fleet operation)
• If you want to use it for a car, you have to choose the method in the first year you use your car for work. (In future years, you can switch to the actual expense method if you like)
• If you lease the car , you'll have to keep using the standard mileage method for the entire period of the lease, including any renewals

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The actual expenses method

This method tends to result in a bigger tax break for freelancers who do a light or moderate amount of driving for work. (Take a look here at the math comparing it to the standard mileage method !)

If you use the actual expenses method, you keep track of what you actually spend on your car for the year, then multiply that total spend by the percentage of driving you did for work. (If you use your car 60% of the time for work errands and 40% of the time for personal trips, for example, you'd multiply your total car expenses by 60%.)

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Under the actual expenses method, you can claim any expenses you incur on your car. Gas, oil, insurance, and maintenance — each of these is a qualified business expense. With this method, you also can take a deduction for vehicle depreciation if you own your car. If you lease, then you'll be able to deduct lease payments. 

The actual expenses method is heavier on the recordkeeping side than taking the standard mileage rate — even if it can lead to bigger tax savings for most freelancers. To streamline your recordkeeping, use Keeper. The app automatically scans your purchases for car-related expenses, at gas stations, auto repair shops, and more. That way, it's easier to save on taxes with the actual expense method.

How to track your miles

If you drive a lot and decide that the standard mileage method is best for you, you'll have to track how many business miles you drive every year. 

This is most commonly done with a mileage tracking app , or by keeping a mileage log and consulting your car's odometer. (If you're a rideshare driver, Lyft and Uber will track some of your miles for you.)

Combine this with Keeper to track any other deductible expenses, like tolls, parking fees, and car washes. Then you'll be prepared to take the biggest possible tax deduction on your business miles.

Robby Nelson, CPA

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At Keeper, we’re on a mission to help people overcome the complexity of taxes. We’ve provided this information for educational purposes, and it does not constitute tax, legal, or accounting advice. If you would like a tax expert to clarify it for you, feel free to sign up for Keeper. You may also email [email protected] with your questions.

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Topic no. 511, Business travel expenses

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Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes.

You're traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.

Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that's your tax home. Your travel on weekends to your family home in Chicago isn't for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.

In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location.

You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you can't deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you'll work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes.

Travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.

Deductible travel expenses while away from home include, but aren't limited to, the costs of:

• Travel by airplane, train, bus or car between your home and your business destination. (If you're provided with a ticket or you're riding free as a result of a frequent traveler or similar program, your cost is zero.)
• The airport or train station and your hotel,
• The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location.
• Shipping of baggage, and sample or display material between your regular and temporary work locations.
• Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.
• Lodging and non-entertainment-related meals.
• Dry cleaning and laundry.
• Business calls while on your business trip. (This includes business communications by fax machine or other communication devices.)
• Tips you pay for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to your business travel. (These expenses might include transportation to and from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer.)

Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel. The deduction for business meals is generally limited to 50% of the unreimbursed cost.

If you're self-employed, you can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) , or if you're a farmer, on Schedule F (Form 1040), Profit or Loss From Farming .

If you're a member of the National Guard or military reserve, you may be able to claim a deduction for unreimbursed travel expenses paid in connection with the performance of services as a reservist that reduces your adjusted gross income. This travel must be overnight and more than 100 miles from your home. Expenses must be ordinary and necessary. This deduction is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Claim these expenses on Form 2106, Employee Business Expenses and report them on Form 1040 , Form 1040-SR , or Form 1040-NR as an adjustment to income.

Good records are essential. Refer to Topic no. 305 for information on recordkeeping. For more information on these and other travel expenses, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses .

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Is Driving Cheaper Than An Amtrak Commuter Train?

• Amtrak offers commuter lines that compete with city trains and driving can save money upfront, but parking costs can add up.
• Driving is normally cheaper than Amtrak trains upfront, but commuting on trains can be more relaxing and productive.
• Commuting with Amtrak can provide a more relaxing and productive environment compared to driving, especially in busy city traffic.

Amtrak is not intended as a commuter service but instead as America's national inter-city rail service; it serves 46 states and three Canadian provinces. Notwithstanding being a long-distance train service, a number of its sections are used as commuter rails. So, on these routes, is it cheaper to take an Amtrak commuter train or to drive?

The answer is somewhat complicated, but it can be argued that commuting on the Amtrak train is either cheaper or just overall more beneficial. These commuter routes are some of the busiest Amtrak routes and there is much to know about riding with Amtrak for the first time whether you're hoping to cut costs or streamline your commute.

Amtrak Offers Lines Suitable For Commuting Can Compete With Commuter Lines

Amtrak is primarily an inter-city service, but some lines can be used for commuting within a city and between nearby cities.

Amtrak can often be price competitive in areas where Amtrak offers similar services to city trains. For example, in the Los Angeles region, Amtrak's trains are more or less price-competitive with MetroLink (Los Angeles's dedicated commuter train network).

Where Amtrak overlaps with commuter trains, one benefit is that it can often offer increased services. For example, an onboard cafe and the option to upgrade to Business Class comes with Amtrak (along with a host of other benefits).

Passengers can also save themselves some time by making sure the trains are on time by using the Amtrak tracker map .

10 California Cities That Are Worth Visiting Along The MetroLink Train Line

Driving is normally cheaper than taking amtrak trains, amtrak fares are typically much more than the cost of gasoline, but there are other costs when driving.

The cons and pros of Amtrak over driving vary from place to place and from time to time. For example, cars get stuck in peak-hour traffic while trains do not. A train station within walking distance can save on parking fees, whereas parking downtown can be very expensive.

Benefits Of Commuting With Amtrak:

• More Relaxing
• Potentially Eliminating Parking Fees
• By Passing Peak Hour Traffic
• Potential to Productively Utilize Time
• Environmentally Friendly

The cost of an Amtrak ride from Los Angeles Union Station to Santa Fe Depot in San Diego is approximately $36 for Coach Class and $55 for Business Class. By road, that is a distance of 120 miles.

A car can be expected to get around 25 miles per gallon and in March 2024, the cost of gasoline in California was $4.87. To drive the same route (and only for gasoline) it will cost around $23, meaning it is cheaper to drive.

• Monthly Parking: $65 to Over $300 in Los Angeles

But one of the hidden costs is parking (assuming commuters can get to the train station without parking their car). It costs anywhere from $0.50 to $6 per hour for metered street parking in Los Angeles and daily rates can reach as high as $40 to $60.

Cost LAX to Santa Fe Deport, San Diego:

• Amtrak: From $36 Coach Class
• Driving: Approx. $22 (gasoline only)

As a rule of thumb, if the roads are clear, then it is likely to be faster to drive than take the train (especially considering passengers need to transfer from their homes to the train station). For example, from Los Angeles Union Station to Santa Fe Depot by Amtrax's scenic Pacific Surfliner takes 2 hours and 54 minutes and to drive it takes about 2 hours (assuming no traffic).

Los Angeles To New York City: How Much This 17-Day Train Journey Through The South Will Cost

Time on trains is more relaxing & productive than driving, it is easier to make time spent on trains more productive than driving.

Trains (especially Amtrak's comfortable long-distance designed trains) are typically more relaxing than driving. Those driving need to be awake and concentrate on driving. Drivers can't do anything other than drive (and listen to music or podcasts and take Bluetooth phone calls).

Productive Use Of Time On Trains:

• Answering Work Calls
• Laptop Work / Emails

The time spent on trains can be productive. Passengers can have the option of catching a needed nap on the train. Sleep can be viewed as a productive use of time, with travelers arriving at work refreshed after getting up early in the morning being very beneficial.

Alternatively, passengers can work, take calls, and read on the train. Depending on their job, passengers on Amtrak trains can answer emails and catch up with the day's work before even getting to the office.

How useful or relevant this is, varies widely from person to person (and may not exist at all for many people). But it is possible for someone commuting from San Diego to Los Angeles to gain a couple of potentially productive hours a day by taking the train. And the cost can be similar once parking is accounted for.