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 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.

Example:

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.

These are:

• 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.