Lewes CPA
officeProgar & Company, P.A.
Certified Public Accounting services for businesses and individuals
Local transportation costs (MS Word)
Local transportation costs (.pdf)
Local transportation costs
Dear Reader:
You recently inquired about the deductibility of local
transportation costs incurred in your business. Local transportation
refers to travel in which you aren't away from your tax home (the
city or general area in which your main place of business is
located) long enough to require sleep or rest. Different rules apply
if you are away from your tax home for significantly more than an
ordinary work day and need sleep or rest in order to do your work.
The most important feature of the local transportation rules is that
your commuting costs are not deductible. That is, the fare
you pay or the miles you drive simply to get to work and home again
are personal and not business miles and no deduction is available.
This is the case even if you work during the commute, e.g., via a
cell phone, or by performing business-related tasks while on the
train. An exception applies for commuting to a temporary work
location that is outside of the metropolitan area in which you live
and normally work. “Temporary,” for this purpose, means a location
where your work is realistically expected to last (and does in fact
last) for no more than a year.
On the other hand, once you get to work, the cost of any local trips
you take for business purposes is a deductible business expense. So,
for example, the cost of travel from your office to visit a client,
pick up supplies, etc., is deductible. Similarly, if you have two
business locations, the costs of travel between them is deductible.
Recordkeeping.
If your deductible trip is by taxi or public transportation, save a
receipt if possible or make a notation of the expense in a logbook,
and record the date, amount spent, destination, and business
purpose. If you use your car, note miles driven instead of amount
spent. Note also any tolls paid or parking fees (with receipts).