Claiming Travel-Related Deductions
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When can you claim transportation expenses in your job and in conducting charity / community work expenses as deductions? And, what considerations determine when to use actual expense or mileage allowance for automobile travel?
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When can you claim transportation expenses in your job and in conducting charity / community work expenses as deductions? And, what considerations determine when to use actual expense or mileage allowance for automobile travel?
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IRS Tax Topic 514 - Employee Business Expenses states that "Although commuting costs are not deductible, some local transportation expenses are. Deductible local transportation expenses include the ordinary and necessary expenses of going from one workplace (away from the residence) to another. If you have an office in your home that you use as your principal place of business for your employer, you may deduct the cost of traveling between your home office and work places associated with your employment. ... You may deduct the cost of going between your residence and a temporary work location outside of the metropolitan area where you live and normally work. If you have one or more regular work locations away from your residence, you may also deduct the cost of going between your residence and a temporary work location within your metropolitan area. ... If your employer reimbursed you or gave you an advance or allowance for your employee business expenses that is treated as paid under an accountable plan, the payment should not be shown on your Form W-2 as pay. You do not include the payment in your income, and you may not deduct any of the reimbursed amounts.
To be an accountable plan, your employer's reimbursement or allowance arrangement must include all three of the following rules: ... You must have paid or incurred expenses that are deductible while performing services as an employee. ... You must adequately account to your employer for these expenses within a reasonable time period, and ... You must return any excess reimbursement or allowance within a reasonable time period. If your employer's reimbursement arrangement does not meet all three requirements, the payments you receive should be included in the wages shown on your Form W-2. You must report the payments as income, and you must complete Form 2106 or Form 2106-EZ and itemize your deductions to deduct your expenses. If you were reimbursed for travel or transportation under an accountable plan, but at a per diem or mileage rate that exceeds the Federal rate, the excess should be included in the wages on your Form W-2. The amount up to the allowance would be reported in box 12 of your Form W-2. If your actual expenses exceed ...
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