Generally, the cost of commuting between a taxpayer’s home and work location is a nondeductible expense. A recent tax court memo (TC Memo. 2013-240) said this is true no matter how long the drive is. In that case, an engineer drove more than 150 miles a day to and from his job in the Nevada desert. The site wasn’t accessible by public transport. The court ruled that the job wasn’t temporary and so he could not deduct his driving expenses.
Expenses incurred commuting between a taxpayer’s home and work location are allowed if (Revenue Ruling 99-7):
- The expense is for going between the taxpayer’s home and a temporary work location outside the metropolitan area where the taxpayer lives and normally works.
- The taxpayer has one or more regular work locations away from home, and the expenses are for going between home and a temporary work location in the same trade or business, regardless of distance.
- The taxpayer’s home is the taxpayer’s principal place of business, and the expenses are for going between home and another work location in the same trade or business, regardless of whether the work location is regular or temporary, and regardless of the distance.
- A work location is considered temporary if employment is expected to last and actually does last for one year or less.
Check with your tax advisor if you are commuting to a location out of town or if your home is your main place of business.