How to Deduct Travel Expenses for Driving From One Job to Another

Everyone's looking for that hidden tax deduction. I may have one for you that you never even knew about. It's a deduction for the expenses of driving from one job to another in the same day. Although you cannot normally deduct commuting expenses, you can deduct the cost of traveling from your day job to a part-time evening job! Read on to find out more.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Your mind in action
• 2 jobs that you work at on the same day
• Travel expenses to and from those jobs
• Federal Tax Publication 463 (optional)
• Federal Tax Form 2106
• Calculator or mathematically genius mind
• Form 1040
• Form 1040 Schedule A--Itemized Deductions
• Form 2106

How to See if You Qualify for the Deduction

1. The first thing you need to realize is that you only will be able to deduct this expense if you itemize deductions and use Federal Form 1040.
2. You've gotta be kidding me! You must have 2 jobs that you work at on the same day. You will be able to deduct expenses of traveling from one job to another during the same day. If you work 9 to 5 at the office, and then waitress in the evening 20 miles away, you can deduct the cost of traveling to the second job!
3. Look at Tax Publication 463, the section on Transportation. For 2007, this starts on page 14, where there is a nice chart that demonstrates the deduction. An online version of the Publication is available on the IRS website, listed in the resources.

How to Figure Out Your Deduction

4. Start out by figuring the amount of your deduction. To do this, you will need Federal Tax Form 2106.
5. I don't think I like all this work- let's quit! Part II of Form 2106 is Vehicle Expense. You figure out the total amount of miles you drove your car during the year. Then, you determine how many of those miles were business miles (driving from one job to another). That number goes on line 13.
6. Mutiply Line 13 (the amount of business miles) times the standard mileage rate. For 2007 Tax year, it's 44.5 cents per mile. This goes on line 22.
7. Now go to Part I of the Employee Business Expenses, Form 2106. Put the amount from Line 22 onto Line 1 on Part I.
8. This amount is the amount of your deduction for traveling from one job to another. It could end up being reduced when you fill out the rest of 2106 if your employer reimbursed you for this expense, which is not likely since you have two different employers.

How to Fill Out Taxes with the Deduction

9. Complete Form 2106. Your total mileage deduction from one job to another goes on line 22, and then onto line 1 on the front.
10. Finish the rest of Form 2106 with other employee business expenses. You'll get a total deduction that goes on line 10 of 2106.
11. Get out Schedule A of the Federal Tax return for Form 1040. Go to line 21, or the line which is called "Unreimbursed employee expenses." Put in the amount from Line 10 of Form 2106.
12. Does anyone else have a headache? Add together all of your miscellaneous expenses (of which this is one) to get a total. Then, get your adjusted gross income amount from Form 1040. (This year, you'll find it on line 38).
13. Multiply the AGI by 2 percent. Then, subtract this amount from the total miscellaneous expenses. You will get your allowed miscellaneous expense deduction.(For example, if you have $5,000 in miscellaneous, and the AGI's 2 percent is $2,000, then $5,000 minus $2,000, for a $3,000 deduction).

Tips & Warnings

• You may only deduct the expenses of traveling from one job to another on the same day. The deduction doesn't apply if you work M-F at your full time job, and then work part time on the weekends Saturday and Sunday.
• Generally, you can't take a tax deduction for the costs of commuting.
• If your two jobs happen to be far apart, your deduction will be bigger!
• To take this kind of deduction, you are required to keep excellent written records over the year of the expenses each day for traveling from one job to another. You need receipts and documentation in the event that you are audited!
• A link to the instructions for Form 2106 is listed in the resource section if you need help.
• For different years, some of the line numbers may change on the Federal Tax forms. You'll generally always use Form 2106, with a total deduction on the last line of the first page. This amount goes to Schedule A's Unreimbursed Employee expenses.
• All of your miscellaneous expenses, including the unreimbursed employee expenses (your expense of one job to another) as well as tax preparation fees and other expenses, have to be more than 2 percent of your adjusted gross income. You only get to deduct the miscellaneous expenses over the 2 percent.