What Is Commuting?
Commuting is considered getting to and from your place of work. Commuting is a daily thing, different from business travel, which may be overnight. You may drive to work, as many people do. The cost of driving from your home to your main work location or regular place of work is a commuting expense. Commuting also may be done by bus, trolley, subway, taxi, bike, electric scooter, or another mode of transportation. Ride-sharing services like Uber may also be commuting expenses if you take them to and from work. The costs of taking public transportation, riding a bicycle to work, or parking at your business location are also considered commuting expenses.
Commuting Expenses Are Not Deductible
Just to clarify, commuting expenses are not deductible. The time you spend traveling back and forth between your home and office is considered commuting, and the expenses associated with commuting (standard mileage or actual expenses) are not deductible. These come out of your own personal budget and can’t be written off your taxes. You cannot deduct commuting expenses no matter how far your home is from your place of work. Consider it like this: Everyone needs to get to work, employees and business owners alike.
Most Business Expenses While Commuting Aren’t Tax-Deductible
Even if you use your car for business purposes while you are commuting, you cannot deduct the car expenses for your business. Here are three examples:
If you use your personal car to transport business materials, supplies, or equipment back and forth from home to the office, the IRS says this doesn’t make the car expenses deductible.If you use commuting time to talk on your cell phone about business matters, these commuting costs are still not deductible. Of course, the charge for the cell phone minutes and any additional charges may be deductible, if you are using your phone for business or if your business provides the phone. If you have to pay to park your car at your business location, this expense is most likely not deductible, but check with your tax professional about special circumstances.
Commuting Without a Regular Office Location
Some business people work remotely (think: sitting in Starbucks), with no fixed office location (home or at an office building). In this case, your “office” is the location of your first business contact inside your metropolitan area. Travel to this location is considered commuting, and contact between your last business contact and your home is also considered commuting—which is not tax-deductible. But, travel in between, as you go from one client location to another, is deductible as a business expense. Here’s an example, assuming your home isn’t your principal place of business: You drive from home to meet your first client. That trip is commuting and it isn’t deductible. Then you visit four more clients during the day, each at a different location, ending up at client number five. All of these trips between clients are business-related and can be deducted on your taxes. Then you head home. This last trip, the “heading home” part, is not deductible.
Exceptions: These Commuting Expenses May Be Deductible
There are always exceptions. In this case, the courts have allowed commuting expenses to be deductions in these circumstances:
Home Office as Principal Place of Business
Expenses for travel between your home and other work locations are deductible if your residence is your principal place of business. First, you must establish that your home is your principal place of business. This is pretty easy if your home is your only place of business, but if you have other places where you work, you must show that:
You use it exclusively and regularly for administrative or management activities of your trade or businessYou have no other fixed location where you conduct substantial administrative or management activities of your trade or business.
Whether or not you claim a home office deduction does not have any relationship to the designation of your home as your principal place of business. Then, if you can establish that your home is your principal place of business, you can deduct travel expenses if you work at other locations. For example, a contractor could deduct travel expenses from his home office to a house where he is doing repairs in order to sell the property for a profit.
Traveling Between Workplaces
If you are traveling between two job sites or work locations, these trips are considered work-related travel, not commuting. For example, if you travel between your day job and a night job, you can claim these expenses as travel, not commuting. However, you can’t go from your day job to home and then to your second job and try to get a deduction for that. Since you went home in between jobs, the travel is not tax-deductible anymore.
Temporary Distant Worksite
Expenses for travel from your home and a temporary work site outside the metropolitan area where you live and normally work. The reason for this exception is that it is not reasonable for a business owner to move permanently to a worksite for a job that is only temporary.
