Commuting deductions oftentimes confuse taxpayers. Some of them assume that the commuting expenses made from their home to their workplace are deductible. But let’s clear this thing once and for all. Commuting expenses are deductible if a taxpayer has to go from one job location to another, travel from his home or regular workplace to his temporary workplace, travel from his home or main work to another job, meets clients in places other than his regular workplace, and maintains a qualified home office. Deductible commuting expenses include expenses accumulated from taking public transportation and driving one’s own car.
Now that this is clear, let’s talk about how you can withhold commuting expenses from your tax. Here is a guide.
- Determine if your place(s) of work qualify. As mentioned, the place(s) of work is a subject of confusion for most taxpayers. So before you prepare for the filing of your tax return, make sure that you understand well which and how a place of work can qualify you for tax deductions. A simple rule to remember, which, if you understand full well, can save you from confusion: No matter the distance and even if you have to work during the travel, transportation from your house to your job location and back is not tax-deductible.
But if you work from home, which means, your house is your main place of work where administrative and main functions are carried out, you can deduct your expenses if you travel to other locations to meet clients and do business-related functions. Your commuting expenses then will be treated as business expenses.
- Create a mileage record. If you drive, make sure to record your mileage when you travel from workplace to workplace and from your house to a specific work location (for a self-employed and work-at-home people). You won’t qualify for tax deductions if you can’t present a substantial record of your mileage to the IRS agent. Although keeping a record is a daunting task, it will earn for you thousands of dollars worth of deductions.
- Keep receipts and records. Other than your mileage record, you also have to gather receipts and document all expenses related to keeping a car for work functions. These include gas, repairs, and maintenance. If you use public transportation, on the other hand, receipts and records of your fares must be kept. If you use car rentals, you must record your tolls and parking fees.
- Complete the appropriate forms. After you have totaled the commuting expenses, you can now accomplish the forms that correspond to your case. Visit the official website of the IRS to download the needed forms.
Once you understand the limitations on commuting expenses deductions, there will be no room for confusion. In any case, you can contact the IRS if you have any more questions about commuting expenses. Or if you prefer, you can also consider consulting a tax professional. The second option, however, requires a fee. So this only applies if you have other and more serious tax concerns when filing your tax return.