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5 ways to deduct commuting costs

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in Small Business Tax,Small Business Tax Deduction Strategies

Although you technically can’t deduct the cost of commuting back and forth from work, you can write off certain out-of-the-ordinary vehicle expenses.

Strategy: Squeeze every last deductible dime out of your business travel. Keep detailed records to back up your claims.

For instance, here are five ways you may be able to deduct “commuting” expenses.

1. Short stops. It may be convenient for you to visit a client on the way into work or on the way home. As a result, you can deduct the cost attributable to the travel between your regular place of business and the client’s business location.

2. Separate offices. If your company has several different branches, you might drive between two or more business locations during the day. As with other business travel, you can deduct the costs between the different business locations.

3. Long-distance commuting. Suppose you spend a couple of weeks visiting a client’s office outside your local geographic area. You never go to your regular workplace. In this case, you can deduct the cost of your daily commute, even though it’s long-distance travel.

4. Temporary assignments. It may be necessary for work at a distant business site for a few weeks or months. Instead of commuting daily, you stay near the work site and come home on weekends. Assuming that the job lasts no more than a year, it qualifies as a temporary assignment. Therefore, you can deduct lodging and meal expenses (within certain limits) plus the cost of the weekend trips to home and back.

5. Night school. If you’re taking courses at a local college to improve your job skills, you may go straight to school after work. The cost of travel between work and the school is deductible.

Tip: Currently, unreimbursed employee travel expenses are deducted as miscellaneous expenses, subject to a 2% floor. Tax reform legislation could affect deductions for 2018 and beyond.

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