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Lessons from the Tax Court: Commuter gets red light

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in Small Business Tax,Small Business Tax Deduction Strategies

The tax law says that you can deduct the cost of traveling between two business locations. For instance, if you have an office and a warehouse, the travel to and from is deductible. But no deduction is generally allowed for “commuting” between your home and workplace.

Accordingly, in a new case, the Tax Court denied a deduction to a taxpayer, even though he traveled a great distance to work each day.

Facts of the case: The taxpayer lived in a suburb west of Philadelphia, but worked as an oral surgeon at a dental office in Elmsford, N.Y., north of New York City. His position at the Elmsford office was his only compensated employment during the tax years in question.

The Tax Court followed the usual route: When a taxpayer travels from a personal home to a non-temporary place of business, the costs of travel aren’t deductible.

Along the same lines, the court disallowed any deduction for lodging costs near the Elmsford office. (Bigdeli, TC Memo 2013-148)

Tip: Special rules apply when you work away from home on a temporary assignment.

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