If you travel to another state for work, or travel anywhere outside your usual work area, you can typically deduct expenses, including mileage, during your business trip from your taxes. You also can deduct local business travel expenses, such as driving from your office to a client's office or an offsite work location, though you're not allowed to deduct mileage on your commute from work to home. You should keep records for any mileage you intend to claim on your taxes.
Business Travel Expenses
You are allowed to deduct expenses from your income tax incurred while traveling for business, provided they're not reimbursed by your employer. That can include mileage while driving your car as well as costs for necessary lodging and work expenses, such as phone and internet costs.
You're allowed to deduct your vehicle mileage at a per-mile rate published annually by the Internal Revenue Service. For 2017, this rate is 53.5 cents per mile, and for 2018, it's 54.5 cents per mile. If you deduct on a per-mile basis, you're not allowed to separately deduct most individual vehicle-related work expenses such as maintenance, fuel, insurance and state registration costs.
You could choose instead to deduct actual, documented expenses for the use of your car for business. This generally entails keeping more thorough records since you need to actually track those expenses, but it can potentially save you money depending on your fuel, maintenance and other costs. If you do not use the standard mileage rate the first year you use a car for business, you are never allowed to use that rate for that vehicle. However, if you do use that rate in that first year, you can switch back and forth between the two systems in subsequent years.
Read More: Can I Still Get a Tax Write-Off if I've Been Reimbursed for Business Expenses?
Local Travel Expenses
You are also allowed to deduct local travel expenses for work while in your normal work area, but there are some exceptions. The main rule is that you're not allowed to deduct your ordinary commute costs, so you can't deduct the mileage incurred driving from your home to your workplace.
It is allowable, however, to deduct the mileage incurred while traveling between your normal workplace, other work sites, client sites and the like. An exception applies if your normal workplace is in your home. In that case, you generally are allowed to deduct the mileage entailed in driving from your home to other work locations as needed. Your home office must be the place where you do most of your work, or at least where you do the administrative and managerial tasks for your business.
You also often can deduct the mileage involved in traveling from home to a temporary work location, essentially meaning one where you'll be working for less than one year.
Although you can't deduct mileage expenses for your commute to work, even if the office is out of state, you can deduct mileage for business trips away from the office.
- IRS.gov: Topic 514 Employee Business Expenses
- IRS.gov: Topic 510 Business Use of Your Car
- IRS.gov: Publication 529 (2010), Miscellaneous Deductions
- CPA Practice Advisor: 2018 IRS Mileage Rates for Business Travel, Charitable, Medical and Moving Expenses
- IRS: 2018 Standard Mileage Rates
- IRS: Business Travel Expenses
- H&R Block: The Complete Guide to Deducting Business Travel Expenses
- Nolo: Using the Standard Mileage Rate to Deduct Business Driving Expenses
Steven Melendez is an independent journalist with a background in technology and business. He has written for a variety of business publications including Fast Company, the Wall Street Journal, Innovation Leader and Ad Age. He was awarded the Knight Foundation scholarship to Northwestern University's Medill School of Journalism.