Owarwick posted a typical question about commute expenses in the tax forum. The reader travels about 800 miles a month for work.
The IRS allows a deduction if the taxpayer is "traveling away from home" for business or a job. However, "away from home" means traveling away from the general location of the taxpayer's work area. "Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located," explains the IRS in Publication 463, Travel, Entertainment, Gift, and Car Expenses.
In Owarwick's scenario, he (or she) travels 800 miles each month to an offshore oil rig, and the location of the rig changes a few times per year. The rig is his regular place of employment, and is his "tax home," based on the IRS definition. Owarwick's commuting expense would be a non-deductible personal expense based. However, the IRS does allow taxpayers to deduct the cost of travel to a temporary work place. "A temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for one year or less," also from Publication 463). Since Owarwick's work location changes several times a year, his travel expenses may be deductible as an itemized deduction for employee business expenses using Form 2106. To claim the deduction, the taxpayer would need to have unreimbursed business expenses in excess of 2% of his adjusted gross income, and be able to itemize his deductions rather than take the standard deduction.
There is an entirely new Web tool to track deductible business mileage which actually GIVES the QUANTITY of miles for each trip. http://WWW.BizMile.com is actually a state of the art Internet mapping navigation engine behind an easy to use spread sheet.
And it is free for 2006.
It is unfortunate that many people who can take these deductions, do not because they add up quick. You can deduct $12.00 per business gallon of gas. e.g. almost .50 per mile X 25 mpg = $12 per gallon deduction.
Please let your readers know how easy it is to recreate accurate, IRS compliant logs AT TAX TIME (when you do all your other tax backup.)
thanks.
Mileage Tracker for the iPhone is cheaper AND more convenient!
If I am being transferred to another branch of my business for what I m being told will be “6 months to a year” and will now be commuting 130 miles a day, is that going to be tax deductible? I believe so, but just double checking…
it’s actually unfortunate that I cannot deduct my 102 mile round trip every day I travel to work. I was out of work for 4 months and finally found this job. meanwhile, some folks are collecting unemployment or on welfare.
If I’m being paid to cover the costs of my normal work commute (.50/mile), is that pay taxable?
My husband works in construction. The company office is located in City-A and he usually has to travel to another city to get to his current job site. More often than not, the job-site has been located 30-50 miles away from the company office.
Is there any of this that he can claim? Mileage? Gas? Maintenance on the vehicle? Logging miles and saving receipts isn’t a problem. I just need to find out if it is even worth the effort.
He does have a car that he uses just for driving back and forth to work and the various job sites where he is assigned and it would be easy for us to simply use that car for work only and not use it to visit friends and family or to run errands during the weekends.
Sometimes for out-of-town work you are able get Per Diem. Do not forget this part of deductions. I am contract labor working in Kansas. i travel everyday, stay the night and when I do I get 120 per day of tax free money.
Can a worker for a temp agency deduct commuting milege. 82 miles a day