What Qualifies as Tax Deductible Business Transportation Expenses
Whether the transportation is by train, taxi, bus, air, rail, or the taxpayer’s car, this post clarifies what is a
tax deductible transportation expense.
Often many taxpayers are concerned about what qualifies as a tax-deductible business transportation expense.
Tax-deductible business transportation expenses include:
- Temporary Workplace: Getting from your home to a temporary workplace when you have one or more regular places of work.
- Client Visits: Getting to and from client and customers for business-related visits.
- Between Offices: Use of your car to get from one place of business to another place of business.
- Meetings: Going to a business meeting away from your regular place of work.
- Errands: Trips to the bank, post office, office supply store, etc., for business-related activities.
For example, if the taxpayer’s job requires them to travel and visit clients on a daily basis, these transportation expenses are tax deductible on as business expenses on the individual taxpayer’s income tax return.
Tolls, parking fees and other transportation expenses incurred during these trip are also tax deductible and business transportation expenses.
Business transportation expenses that are not tax deductible:
- Overnight Travel: Taxpayer travel away from their home, overnight for work, would fall under travel expenses. More details on the IRS requirements for tax-deductible travel expenses can be found in the Falcon Expenses resources post, What Qualifies as Tax Deductible Business Travel Expenses.
- Between Home and Office: Traveling in your car to and from your home to your ordinary place of work.
- Daily transportation expenses taxpayers incur while traveling from home to one more regular places of business are generally not deductible.
For example, if the taxpayer uses a bus, subway, or taxi to commute between their home and office, these costs would qualify as personal expenses. Even if the taxpayer does work during the commute trip, they cannot deduct these commuting expenses. Also, parking fees and/or tolls that the taxpayer incurs during their daily commute are also not tax deductible transportation expenses.
When qualified tax-deductible transportation expenses are completed using the taxpayers’ car, the taxpayer has two options available for calculating the deduction amount. These methods are the Standard Mileage Rate method and the Actual Car Expenses method. More details on these methods can be found in the post, How to Maximize Business Use Car Tax Deductions.
About Falcon Expenses, Inc.
Falcon Expenses is an iOS solution for expense tracking and management. Scan receipts, we type merchant, date and amount, auto-track mileage expenses via GPS and log billable hours with an integrated timer. Quickly organize expenses by time period, project or client and easily prepare reports for email to anyone in PDF or spreadsheet formats, all from your phone. Use for reimbursements, taxes, record keeping or invoicing. Falcon Expenses is great for professionals, freelancers, realtors, business travelers, truckers and more. Find out more, here.