Temporary Work Locations & Commuting Expenses Tax Deductions

“I’m an independent contractor and I use my personal car to travel to different work locations. At the end of the year, what commuting mileage is tax deductible and what isn’t?”

The IRS defines a temporary work location as a work location expected to last for less than a year. For example, an employee’s or contractor’s commute between their home and regular work location is not a deductible business expense. However, if the work location is temporary than the daily round-trip commute expenses are tax deductible, regardless of the distance.

Factors that Determine a Temporary Work Location

The employment isn’t temporary if the employment at the work location is expected to last more than one year. The employment is still not considered temporary even if it ends up lasting less than a year. Therefore, in this case the commuting expenses are not deductible. For example, an individual accepts an offer for a new full-time job but resigns within the first year of employment. Also, if the employment is initially expected to last less than a year and later is expected to last more than a year, the work location is no longer considered temporary. The work location is no longer considered temporary at the time of realizing the employment will last longer than a year.

What if I Have More than One Work Location?

If the employee works between two or more work locations the commuting expenses between the two work locations are deductible. This is true even if the employee is employed by two different empoyers. In the event that the commuter does not go directly from one location to the other, only the amount of the commuting expense is deductible.

No Ordinary Place of Work

Many workers have no ordinary place to work. Meaning, they don’t have a regular office that they go to on a daily basis, Monday through Friday. Instead, these workers are traveling around to different work locations throughout the day and throughout the week.

What commuting expenses are tax deductible if you travel to different work locations for work?

Commuting expenses aren’t deductible if the job requires you to travel to different workplaces around the city where you live. However, if the commuting requires the taxpayer to travel outside of their metropolitan area, then these commuting expenses are deductible. For information about what qualifies as “Away From Home”, review the post, IRS Business Travel Definition for “Away From Home”.

Temporary Work Location vs Travel

If the temporary work location is outside of the area where the taxpayer lives and it involves overnight stay, it’s considered a travel expense. A travel expense is not a temporary work location commuting expense. Therefore, instead of deducting the expenses as commuting expenses the expenses are deducted as business travel expenses. For more information on business travel expenses please review the following post, What Qualifies as Tax Deductible Business Travel Expenses.

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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.

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