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Are Commuting Expenses Tax Deductible?

by | May 2, 2022 | Federal Taxation |


Driving back and forth from home to work everyday can be very time-consuming and expensive, especially if several hours per day are spent on the road.  Are the expenses of commuting to and from work (e.g. mileage, gasoline, wear-and-tear on your vehicle) tax deductible for business owners, employees or independent contractors?

Generally, the answer is no.  It is true that you are allowed to deduct “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including… traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business.”  26 U.S.C. §162(a)(2).  However, no tax deduction is “allowed for personal, living, or family expenses.”  26 U.S.C. §262(a).  “The taxpayer’s costs of commuting to his place of business or employment are personal expenses and do not qualify as deductible expenses.”  26 CFR §1.262-1(b)(5).  Although the law is hostile towards commuter deductions, there are limited circumstances where these costs may be allowed.



In Commissioner v. Flowers, 326 U.S. 465 (1946), the taxpayer (a lawyer) was residing at his home in Jackson, Mississippi and was commuting to an office in Mobile, Alabama to represent Gulf, Mobile & Ohio Railroad in their legal affairs.  He went back and forth regularly between the cities, but the railroad paid none of these costs so the taxpayer deducted his travel, meal and hotel expenses from his tax return.  The IRS disallowed the deductions because these were not deductible travel expenses but rather “commuters’ fares” that are not considered business expenses and, therefore, not deductible.  The U.S. Supreme Court agreed with the IRS, holding:

“The facts demonstrate clearly that the expenses were not incurred in the pursuit of the business of the taxpayer’s employer, the railroad. Jackson was his regular home. Had his post of duty been in that city, the cost of maintaining his home there and of commuting or driving to work concededly would be nondeductible living and personal expenses lacking the necessary direct relation to the prosecution of the business. The character of such expenses is unaltered by the circumstance that the taxpayer’s post of duty was in Mobile, thereby increasing the costs of transportation, food, and lodging. Whether he maintained one abode or two, whether he traveled three blocks or three hundred miles to work, the nature of these expenditures remained the same.”

“The added costs in issue, moreover, were as unnecessary and inappropriate to the development of the railroad’s business as were his personal and living costs in Jackson. They were incurred solely as the result of the taxpayer’s desire to maintain a home in Jackson while working in Mobile, a factor irrelevant to the maintenance and prosecution of the railroad’s legal business. The railroad did not require him to travel on business from Jackson to Mobile, or to maintain living quarters in both cities. Nor did it compel him, save in one instance, to perform tasks for it in Jackson. It simply asked him to be at his principal post in Mobile as business demanded and as his personal convenience was served, allowing him to divide his business time between Mobile and Jackson as he saw fit. Except for the federal court litigation, all of the taxpayer’s work in Jackson would normally have been performed in the headquarters at Mobile. The fact that he traveled frequently between the two cities and incurred extra living expenses in Mobile, while doing much of his work in Jackson, was occasioned solely by his personal propensities. The railroad gained nothing from this arrangement except the personal satisfaction of the taxpayer.”

“Travel expenses in pursuit of business… could arise only when the railroad’s business forced the taxpayer to travel and to live temporarily at some place other than Mobile, thereby advancing the interests of the railroad. Business trips are to be identified in relation to business demands and the traveler’s business headquarters. The exigencies of business rather than the personal conveniences and necessities of the traveler must be the motivating factors. Such was not the case here.” 326 U.S. at 473-474.



Expenses incurred on trips between two places of business, however, may be deductible.  In Steinhort v. Commissioner, 335 F.2d 496, 503-504 (5th Cir. 1964), the taxpayer (a boat captain) maintained a home in Houston, Texas but when he was on call he would have to make several intermediate trips between several docks, piers and facilities on the same shift.  The IRS challenged his commuting deductions between several places of business, but the U.S. Supreme Court determined that, while he could not deduct the trips between his home and his first and last place of business during his shift, the various trips between places of business were deductible.

“From the viewpoint of logic, the place of work is not really at these dock facilities. The place of work is the navigating bridge of a ship being conned. In that sense, it is just as logical to say the “place of work” is alongside a vessel six miles out in the Gulf at the sea buoy as it is to fix it at the first or last of these pier-side facilities, see note 11, supra. For that matter, as a proposition of logic alone, one could argue persuasively that a worker having places A, B, and C as regular destinations for the day’s work, is going from home to B and then to C even though it is done after first stopping at A and B Yet the law neither is, nor permits itself to be, carried away by such logic. It recognizes, first, that where there are two or more established places of business, all costs of transportation between them is an ordinary and necessary business expense. Thus all inter-facility movements occurring after arrival at the first, until departure for home from the last facility within the Houston Port area, are deductible.”  335 F.2d at 504-505.



If a taxpayer is working at a home office and had local transportation costs between his office in residence and his other business sites (e.g. rental properties), then those costs could be deductible as ordinary and necessary business expenses.  In Curphey v Comm’r, 73 T.C. 766 (1980), the U.S. Tax Court found that these local travel expenses for a taxpayer using his home as his principal place of business was allowable:

“Petitioner made his trips from his home office (which we have held to be the principal place of business with respect to his rental activities) to his rental properties for a business purpose, i.e., to carry out management duties at those properties. We see no reason why the rule that local transportation expenses incurred in travel between one business location and another are deductible should not be equally applicable where the taxpayer’s principal place of business with respect to the activities involved is his residence. The fact that, under such circumstances, a taxpayer has no commuting expenses because his office is in his home, should not render nondeductible transportation costs which are otherwise ordinary and necessary expenses incurred in pursuit of his business… [T]he petitioner herein was motivated by purely business reasons to travel locally between his principal place of business to another business location in carrying on his rental activities. We think that in such a situation the trips should not be equated with commuting. Accordingly, we hold that petitioner’s automobile expenses incurred in traveling from his residence to his rental properties are deductible under section 162.” 73 T.C. at 777-778.

The Tax Court made it clear in Curphy that the deductibility of these daily transportation expenses related to a home office will be permitted.



Generally, a taxpayer who lives and works in the same metropolitan area but does not have a principal place of business cannot deduct commuting expenses while going between home and work sites.  However, there is a limited exception for deductible commuting expenses at work locations outside of the taxpayer’s usual metropolitan area.

The Internal Revenue Service released Revenue Ruling 90-23 which clarified the previous Revenue Ruling 190 regarding rules for deducting commuting expenses between the taxpayer’s residence and work locations inside the metropolitan area and temporary work locations outside of the same metropolitan area:

  • “Rev. Rul. 190, 1953-2 C.B. 303, provides a limited exception to the general rule of commuting expense nondeductibility. It holds that, for a taxpayer who ordinarily works in a particular metropolitan area but who is not regularly employed at any specific work location, daily transportation expenses are deductible business expenses when paid or incurred by the taxpayer in going between the taxpayer’s residence and a temporary work site outside that metropolitan area. However, such expenses are not deductible when paid or incurred in going between the taxpayer’s residence and a temporary work site within such metropolitan area because that area is considered the taxpayer’s regular place of business.”
  • “A taxpayer who pays or incurs daily transportation expenses on trips between the taxpayer’s residence and one or more regular places of business is like the taxpayer described in Rev. Rul. 190 who pays or incurs daily transportation expenses on trips between the taxpayer’s residence and temporary work sites within the metropolitan area that is considered the taxpayer’s regular place of business. Such daily transportation expenses are nondeductible commuting expenses. On the other hand, a taxpayer who has one or more regular places of business and who pays or incurs daily transportation expenses for trips between the taxpayer’s residence and temporary work locations is like the taxpayer described in Rev. Rul. 190 who pays or incurs deductible daily transportation expenses for trips, between the taxpayer’s residence and temporary work sites outside the metropolitan area that is considered the taxpayer’s regular place of business. Thus, for a taxpayer who has one or more regular places of business, daily transportation expenses paid or incurred in going between the taxpayer’s residence and temporary work locations are deductible business expenses under section 162 (a) of the Code regardless of the distance.”

The reason for this exception is that it is not reasonable for an employee or business owner to move permanently to a worksite for a job outside the regular work area that is only temporary.  Therefore, the taxpayer won’t be punished on commuting expenses if a temporary assignment out of the area is accepted.

In Walker v. Comm’r [101 T.C. 537 (1993)], the taxpayer (a logger) drove daily from his residence to several job sites.  He worked approximately six to seven hours per day cutting trees and worked approximately seven hours per week at his residence making tool repairs, performing maintenance, store equipment and taking calls.  The IRS disallowed his transportation expenses between job sites and his residence, reasoning that these expenses were nondeductible commuting expenses because Walker’s residence was not established as his principal place of business.  The U.S. Tax Court found that the standards used in establishing a residence as a regular place of business were not the same as those for determining a principal place of business, so the taxpayer’s residence was considered a regular place of business with his job sites being temporary work locations so, therefore, all of his transportation expenses were deductible.

The Internal Revenue Service announced it was not going to follow the Walker ruling and released Revenue Ruling 94-47 which amplified and clarified the rules regarding commuting deductions with respect to temporary work sites up to that point.  The condensed rules allow such expenses to be deductible under the following three circumstances:

  • “A taxpayer may deduct daily transportation expenses incurred in going between the taxpayer’s residence and a temporary work location outside the metropolitan area where the taxpayer lives and normally works.”
  • “If a taxpayer has one or more regular work locations away from the taxpayer’s residence, the taxpayer may deduct daily transportation expenses incurred in going between the taxpayer’s residence and a temporary work location in the same trade or business, regardless of the distance.”
  • “If a taxpayer’s residence is the taxpayer’s principal place of business within the meaning of Section 280A(c)(1)(A)”, known as the home office rules, then “the taxpayer may deduct daily transportation expenses incurred in going between the residence and another work location in the same trade or business, regardless of whether the other work location is regular or temporary and regardless of the distance.”



If your commuting expenses meet the narrow exceptions to qualify, the taxpayer can deduct the following:

  • Fees paid to travel by airplane, train, taxi, bus or other vehicle belonging to someone else between your home and the business destination (e.g. face value of tickets and fares).
  • If the taxpayer is using his or her own motor vehicle, he or she can choose to deduct the actual expenses or the standard mileage rate, as well as business-related tolls and parking fees.
  • If the taxpayer is renting a motor vehicle, he or she can only deduct the business-use portion of the expenses.

Unsure if your commuting expenses qualify for a deduction on your federal tax obligations?  Get the right answer from a tax professional before waiting for the IRS to examine and disallow your deductions at the risk of penalties and interest.  If you have further questions about federal taxation, then do not hesitate to contact the tax attorneys at Kershaw, Vititoe & Jedinak PLC for assistance today.


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