Deducting business mileage

April 02, 2014 by Dave Du Val, EA
Man and Woman riding in a red car

Hey Dave,

I use my car in my business. How much of it is tax deductible, and what type of travel is deductible? Are my trips going back and forth to work deductible?

Cassandra

 

Hi Cassandra,

Your vehicle deduction depends on how many miles you traveled for business purposes, not counting regular “commuting miles.” You would enter your business miles and personal miles into the tax program and it would calculate your deduction for you based on the business use percentage and standard mileage rate. (Note that you can use the standard mileage rate or your actual expenses, but in order to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then, in later years, you can choose to use the standard mileage rate or actual expenses.)

Generally, miles traveled from home to work and from work to home are considered personal and nondeductible; these miles are known as commute. Miles traveled from your main work location to another location during the day, or from one job to another, would be deductible, as would miles traveled to complete work-related errands for the convenience of your employer. Keep in mind that if your first work place is a qualified home office and you start work there, then the drive from the home to the next work place consists of business miles and not commute miles.

If you do site visits or sales, the miles traveled from home to your first appointment location and from your last appointment location to home would be considered personal, nondeductible commuting miles. If you have a primary office location that you commute to regularly the deductible miles would be the difference between the distance from your home to your main office and the distance from your home to your first appointment location, and likewise for the return trip. For documentation purposes you should be keeping a contemporaneous anecdotal log of your mileage.

Deductibly Yours,

Dave

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David E. Du Val, EA
Chief Compliance Officer for TRI Holdco

 

Dave Du Val, EA, is Chief Compliance Officer for TRI Holdco. Inc., the parent company of TaxAudit, and Centenal Tax Group. A nationally recognized speaker and educator, Dave is well known for his high energy and dynamic presentation style. He is a frequent and popular guest speaker for the California Society of Tax Consultants, the California Society of Enrolled Agents and the National Association of Tax Professionals. Dave frequently contributes tax tips and information to news publications, including US News and World Report, USA Today, and CPA Practice Advisor. Dave is an Enrolled Agent who has prepared thousands of returns during his career and has trained and mentored hundreds of tax professionals. He is a member of the National Association of Tax Professionals, the National Association of Enrolled Agents and the California Society of Enrolled Agents. Dave also holds a Master of Arts in Education and has been educating people since 1972. 


 

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