If you’re self-employed, your miles can be worth a lot of money when it comes to the mileage tax deduction. But don’t forget that the IRS only lets you write off certain trips. So let’s go over when a drive to work is and isn’t tax deductible.
Is My Commute Deductible?
It’s important to understand that your commute is never deductible, even if you have one of those mega-commutes. This means you can’t deduct your first trip from home to an office or the last trip back home. This also applies to drives from your home to other business-related locations like the post office or to visit clients.
The IRS considers where you live a personal choice, and thus, your commute is a personal expense. You can only deduct business, medical, and charity mileage.
What If I Do Business-Related Things During My Commute?
Even if you perform business-related activities during your commute, you cannot write off a commuting drive to work on your taxes. This includes taking business calls, listening to work-related materials, or even having your car wrapped in advertising.
What If I Don’t Have a Fixed Commute?
Let’s say you’re a real estate agent, and you don’t drive to the same fixed location every day. For the millions of taxpayers like you, there is no standard commute. The IRS has some slightly different rules for people driving to temporary work locations.
A temporary work location is any place you realistically expect to (and do) work at for less than a year. So, this could include construction sites for construction workers, new homes for real estate agents, and many other locations. As long as you have a main business office, you can deduct trips from your home to these temporary work locations.
What If I Don’t Have an Office?
If you don’t have a regular work location, things get a little bit trickier. You can still deduct trips from your home to temporary work locations but only if these are outside your metropolitan area.
How Can a Home Office Help My Mileage Deduction?
There are many reasons to set up a qualifying home office deduction, but one of the major ones is that it can greatly increase your mileage deduction. If you are self-employed and routinely drive to work at an office 15 miles away, that’s 30 miles a day in commutes you can’t deduct. Each business mile is worth 53.5 cents in 2017, which in our example adds up to more than $80 a week in potential deductions.
But with a home office, that drive to work is technically a trip between offices, which is always deductible. In a way, you’re turning your “commute” into more money in your pocket thanks to the write-off. Just be sure you’re tracking your mileage so you have proper tax documentation.
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