Every year without fail new clients ask me how many of the miles they put on their vehicles can be deducted as a business expense. Many are under the impression that all business miles are deductible. This is not necessarily the case.
Some of the miles you drive can be considered personal commuting miles while others are actually considered business mileage.
Determining what your actual business miles are is not complicated once you define a few key terms.
Home — this is where you reside (house or apartment.)
Regular/Main job — this is your principal place of business.
Temporary work location — a place where a work assignment lasts for one year or less. Remember this, unless you have a regular place of business, you can only deduct your miles to a temporary work location outside of the area in which you live.
Second job — if you work at two or more places in one day, regardless of the employer, you can deduct mileage from one job to another. If you go home between jobs, you can’t deduct the miles.
Now that we have defined the key terms we can look at when business miles are deductible.
• From Home to Regular/Main job and vice versa.
• From Home to Second job and vice versa.
• From Home to Temporary work location (if you do not have a regular/main job at another location.)
• From Regular/Main job to Temporary work location and vice versa.
• From Regular/Main job to Second job and vice versa.
• From Second job to Temporary work location and vice versa.
• From Home to Temporary work location (if you have a regular/main job at another location.)
The above-mentioned should be a useful guide in determining what miles are deductible so you will be ready when you file your tax return.
One final thought about mileage, keep a good record of the miles you incur. My records list the date, reason for the trip, location and mileage incurred.
If you would like to find out more about my firm check out my website at www.amazzoaccounting.com.