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I have an office in my home – can I deduct commuting expenses?

By: Amanda Domitrowich

If you maintain your office in your home and your home is your principal place of business, you may be entitled to a special tax break on your commuting costs. Taxpayers can deduct daily costs of travel between their home and another work location in the same business, regardless of whether the other location is regular or temporary. Simply remember to keep adequate records, via a diary or log, of your expenses and mileage during the year and you will be eligible to deduct one or the other at the end of the year.

If you’re an employee and your employer reimburses your travel expenses under an “accountable plan,” you needn’t report the reimbursements as income. An accountable plan is one that reimburses only deductible business expenses, and requires you to substantiate your expenses and return amounts in excess of your substantiated expenses. If it is not an accountable plan, the reimbursement must be reported as income and your deductible expenses claimed as employee business expenses.

If you’re office at home is NOT your principal place of business, the costs of travel between your home and the first and last stops of the day are nondeductible commuting expenses.





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