8745 / Can a taxpayer deduct business-related transportation expenses incurred when the taxpayer is not travelling away from home on business?
A taxpayer who is not considered to be “away from home” for purposes of deducting business-related travel expenses (see Q 8738 to Q 8744) may still be entitled to claim a deduction for business-related transportation expenses. A taxpayer is generally not entitled to deduct the cost of commuting from the taxpayer’s residence to the taxpayer’s primary place of business. However, business-related transportation costs other than commuting costs may be deducted as business expenses. Examples of such expenses include the following:
(1) Travelling from one business place to another business place within the general area that is considered a taxpayer’s “tax home” (see Q 8739 and Q 8738);
(2) Visiting clients and customers;
(3) Travelling to a business meeting outside of the taxpayer’s principal place of business;
(4) Travel from the taxpayer’s residence to a temporary workplace if the taxpayer has one or more regular workplaces. A work location is considered temporary if it is realistically expected to last (and does last) for one year or less, unless the circumstances indicate otherwise.1
If a taxpayer’s residence is also the taxpayer’s principal place of business, that taxpayer may deduct the costs of commuting between the residence and another place of business, whether or not that second place of business is considered “regular” or “temporary.”2
Example: Brent is a representative for a cheese manufacturing company and works out of his home. He has no permanent office, but regularly must drive to visit clients who have questions about his company’s cheese products. Brent may deduct the cost of driving between his home and client sites, even though these visits occur on a regular basis. If Brent were required to travel outside of his regular area of business on an overnight trip, those costs would be deductible as travel expenses, not transportation expenses. Because Brent travels by car, he can either deduct the actual costs of his car or the standard mileage rate for the year (58 cents in the first half of 2022 and 62.5 cents in the second half of 2022, 65.5 cents in 2023, and 67 cents in 2024).3
Planning Point: Because all miscellaneous itemized deductions were suspended for 2018025, taxpayers who previously deducted business mileage expenses as a miscellaneous itemized deduction will no longer be entitled to do so. However, for taxpayers who were eligible to claim the deduction as an above-the-line deduction, the business standard mileage rate remains relevant.
As stated above, expenses incurred for commuting from the taxpayer’s residence to place of business are generally nondeductible. This is the case even though the taxpayer works during the commute—for example, by taking work-related calls or discussing business while carpooling with a business associate.