The IRS has some strict rules on mileage deduction when it comes to driving to work. Whether your commuting miles can be written off on your taxes is dependent on many factors and specific instances of your work-related trips.
Let’s review the rules on what the IRS considers commuting miles, what is tax deductible, and what mileage cannot be taken as a deduction, known as the IRS Commuting Rule.
What is the IRS Commuting Rule? Definition of IRS Commuting Rule
The definition of the IRS Commuter Rule is “transportation between your home and your main or regular place of work.” If you've been working at the same job site for one year or more, that is considered your main or regular place of work. Those drives are considered personal, which means they are not eligible for any deductions according to IRS mileage rules.
When can you deduct mileage to & from work (commuting)?
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.
IRS Commuting Rule: When can you not deduct business mileage between locations?
We’ve already covered that driving between your home to your regular job is not a deductible expense, as it’s considered personal commuting. Let’s go over additional driving scenarios where this mileage cannot be deducted.
Drives that are not deductible:
- If you drive to your second job from your home, on a day off from your primary job.
- If you drive from your home to your regular workplace and are carrying business supplies, products, etc.
- If you drive from work to your home in a company car with advertising or branding.
- If you take a business call while you are driving from between your workplace and home.
How do you claim a mileage deduction?
It’s important to note that many companies offer reimbursements to employees directly for mileage expenses; therefore, those employees cannot deduct business mileage from their taxes.
If your business drives are not reimbursed by your employer, then you may deduct this mileage using the IRS Standard Mileage Rate or the Actual Expenses Method. You can choose one of these options, but not both.
Also, be sure to record your business miles accurately. The IRS commuter rule clearly states it will reject your mileage log if it isn’t recorded correctly. This where a mileage tracker app such as Everlance can help. Simply swipe left or right for business or personal trips each time you get behind the wheel, and it will automatically record all your mileage driven for deductible work-related trips.
Be sure to stay on top of tracking and recording your mileage so that you’re able to successfully claim this huge money-saving tax deduction, without raising any doubts from the IRS.