When is Mileage Deductible?

Mileage is a popular business deduction, but is your mileage actually deductible? There is a great deal of misunderstanding about mileage deductions, and in recent years the IRS has become increasingly picky about evidence.

Your daily commute to your permanent work location is not deductible, even if your workplace is far away or you are hauling tools or equipment during your commute. The only time you can claim commuting expenses is when you are commuting to a temporary work location outside of your metropolitan area, or to a temporary work site. This may include a second company location such as a branch office, or travel to an off-site meeting or conference.

In order to have any deductible mileage, you must have a fixed place of work. If you have no main place of business and there is no place where you regularly live, you are considered a transient worker and not eligible to deduct travel or mileage expenses.

The tax home, meaning your fixed place of work, includes the general area where you regularly work and conduct business. Only expenses for mileage to a temporary workplace (when you have a fixed work location), mileage between multiple job sites during the same work day, and mileage between two jobs (if you commute directly from your day job to your evening job) are deductible.

To deduct business driving, the IRS requires you to keep complete and accurate records of all mileage. You'll need to record the date, the miles driven, and the business purpose in order to claim a deduction at tax time, and you will need to supply firm evidence to support the total miles driven on your vehicle, such as odometer readings from repair or maintenance invoices.

If you have a lot of business mileage, you should be meeting with a tax professional who understands the process and asks the right questions. That's where we come in—contact us today if you need assistance with mileage deductions.