Commuting is one deduction which causes taxpayers confusion every year and is often contested by taxpayers with the Internal Revenue Service (IRS). Commuting is defined by the IRS as the time you spend driving back and forth between your home and your business. According to the IRS any expenses associated with your commute are not deductible as business expenses no matter how far your home is from your place of work.
The IRS states commuting expenses are personal expenses and everyone needs to get to work, employees and business owners alike. In the IRS’s viewpoint where you live in relation to your business is your personal choice and travel is not an ‘ordinary and necessary” expense of business.
One of the latest cases to be tested before the IRS involved an engineer who drove more than 150 miles a day to and from his job in the Nevada desert. The site was not accessible by public transit. Nevertheless, since the job assignment was not temporary, he cannot deduct his driving expenses. This ruling is based on the regulation that commuting to a permanent work site is not deductible no matter how long the driving time is or how far.
There are some exceptions to the commuting rule such as expenses for travel from your home and a temporary worksite outside the metropolitan area where you live and normally work. The IRS reasoning for this exception is that it is not reasonable to expect a business owner to move permanently to a work site for a job that is only temporary. As can be deduced from this information the main factor dictating whether the mileage can be deducted is based on whether the job location is permanent or temporary.
As the commuting deduction is based on a temporary work site versus a permanent work site, how the IRS defines temporary needs to be examined. According to the IRS, a temporary work location is defined as any location at which the taxpayer performs services on an irregular or short-term (i.e., generally a matter of days or weeks) basis. To further define the length of time used to determine temporary as opposed to permanent, the IRS provides a 1-year standard to determine whether a work location is temporary. Therefore, if you expect to be commuting to a job site outside your usual metropolitan area less than a year the mileage might be deductible.
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