Are Your Travel Expenses Deductible?

deducting travel expenses

Stop! Just because you’re driving to work doesn’t mean you can deduct the expense.

In a recent Tax Court case, the court found that a taxpayer’s attempt to deduct travel expenses to his temporary worksites was not valid. Because the taxpayer’s worksites were temporary, he felt his permanent worksite was his home and, therefore, deducted his travel expenses to the temporary sites. However, the evidence did not show that there was any place where the taxpayer normally worked during the year from which the travel to the temporary sites would then be deductible.

Deducting Travel Expenses

Determine your tax home

  • Tax Home: Your tax home is typically your regular place of business or post of duty, regardless of where you live.
  • If you regularly work in more than one place, then you must determine your main place of business or work by asking yourself: (1) How much total time do you ordinarily spend in each place? (2) What is the level of business activity in each place? (3) Is your income from each place significant?

Decide whether you want to deduct standard mileage rate or actual car expenses

  • If you qualify to deduct car expenses, you may be able to use the standard mileage rate to figure the deductible costs of using your car for work. Remember, if you use the standard mileage rate for the year, you may not deduct actual car expenses for that year (maintenance, repairs, etc.)
  • Alternatively, you may be able to deduct actual car expenses which include the following: depreciation, licenses, gas, insurance, garage rent, parking fees, registration fees, repairs, etc.

For more information read, Publication 463, Travel, Entertainment, Gift, and Car Expenses. Questions? Contact H&S.