Temporary Work Location Commuting Expenses Tax Deductions
“I’m a freelancer and I use my personal car to travel from location to location to do my work. At the end of the year I am never completely sure what mileage is tax deductible and what is not tax deductible.”
Temporary work location tax deductions can be complicated. For example, an employee’s or contractor’s commute between their home and a regular place of work typically is not a deductible business expense. However, if the place of work is a temporary location, meaning the location is expected to last for one year or less, than the daily round-trip commute expenses are tax deductible, regardless of the distance.
Factors Determining Indefinite or Temporary Work Location
If the employment at the work location is initially expected to last more than one year and ends up lasting less than a year, then the employment is not temporary and 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, however, as a later time is expected to last more than a year, then at the time of realizing that the employment will last more than a year, the work location is no longer considered a temporary work location.
Two Work Locations
If the employee works between two or more work locations, even if for different employer’s, the commuting expenses between the two work locations can be deducted. In the event that the commuter does not go directly from one location to the other, only the amount of the commuting expense can be deducted.
No Ordinary Place of Work
If the duties of the taxpayer’s job require them to travel to different places of work, with no ordinary place of work, in and about the metropolitan area where they live, then the commuting expenses cannot be deducted. However, if the commuting requires the taxpayer to travel outside of their metropolitan area, then these commuting expenses can be deducted. For more information about what qualifies as “Away From Home”, please review the Falcon Expenses resources post, IRS Business Travel Definition for “Away From Home”.
Temporary Work Location vs Travel
If the temporary work location is outside of the general location of the place of work and the taxpayer stays overnight, this is considered a travel expense, not a temporary work location commuting expense. In this case, the expenses would be deducted as travel. For more information on business travel expenses please review the Falcon Expenses resources post, What Qualifies as Tax Deductible Business Travel Expenses.
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.