How to Deduct Commuting Expenses

You cannot deduct commuting expenses for travel between your home and your regular workplace, no matter how far away from your home it is located. You may deduct commuting expenses to a temporary job location outside of the area where you live and work. If your home office qualifies for a deduction, then your transportation expenses are deductible regardless of whether your other work location is regular or temporary.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• IRS Schedule A
• IRS Forms 1040 and 2106

Deduct Commuting Expenses

1. Keep a record of the total number of miles you drove your vehicle during the tax year and the percentages of your personal and business use.

2. Keep track of all of your commuting receipts and records for gas, oil, auto repairs, auto insurance, parking fees, tolls, airfare, hotels, car rentals, meals and entertainment. You will need them to complete your tax return and to show the IRS if you are audited.

3. Gather your receipts. Total your receipts for gas, oil, repairs and insurance.

4. Pick up IRS Forms 1040 and 2106 and Schedule A from your local IRS office or download them from the IRS website (see Resources below).

5. Fill out IRS Form 2106 (Employee Business Expenses). Figure your vehicle expenses on Part II, section B (Standard Mileage Rate) or C (Actual Expenses). You cannot deduct both.

6. Enter the total from line 22 or line 29 on Form 2106, Part 1, Step 1. Complete Steps 1, 2 and 3 of Part 1 to figure your other commuting expenses.

7. Enter the total from line 10 on IRS Schedule A, line 20. The total of your Miscellaneous Deductions will only be deductible if they exceed 2 percent of your adjusted gross income.

8. Complete Schedule A. Enter the total from Schedule A, line 28 on Form 1040, line 40.

Tips & Warnings

• Expenses incurred while driving in a car pool are not deductible. If you receive money from other passengers, you do not have to report it as income because the IRS considers it reimbursement for your expenses.
• Reimbursement to employees for commuting expenses for travel between their homes and business locations other than their regular workplaces can be excluded from income if the expenses would otherwise be deductible. They must be included in income if they are not.
• If, when commuting between your home and your regular place of work, you are required to haul tools or instruments, you are allowed to deduct the cost of hauling those items. An example would be the cost to rent a trailer.

Resources

• IRS to download forms.