Article about Local Transportation Deductions

[Lee B]

Five Ways to Get Tax Deductions for Local Transportation Uses

by Ken Berry, CPA, Practice Advisor Tax Correspondent for

CPA Practice Advisor publication

 

http://www.cpapracticeadvisor.com/news/11656241/5-ways-to-get-tax-deductions-for-local-transportation-uses

 

Frequently, the IRS challenges deductions for business-related driving expenses,  especially when they involve local travel. Start with this basic premise: To qualify for transportation deductions, you must be traveling away from your tax home to a business location. For this purpose, your tax home is generally your principal place of business, not the place where you live, eat and sleep.

 

Therefore, you can’t deduct the cost of commuting back and forth from work, no matter how much your clients believe they should be able to. The IRS views this as a purely personal expense even though you’re going to work for business reasons. And it doesn’t matter if you’re driving or if you travel by bus, rail or taxi or if you do work during the commute. Period.

But that doesn’t mean a client can’t deduct some transportation expenses that are in the nature of commuting, but fall outside the technical definition. Here are five prime examples:

 

1. Working from home: If your home office is your principal place of business -- for example, you’re self-employed or your employer requires you to work from home -- your tax home is the same as your home. In this case,  you can deduct the cost of visiting a client or customer across town as long as you keep the proper records. But if you stop for a carton of milk on your way home, the portion of the trip representing personal travel is nondeductible.

 

2. Multiple business locations: Suppose that you’re based at one of several local job locations and travel between them. For instance, you might be a dermatologist with countywide offices or an officer at a bank operating multiple branches. The cost of the travel between the two business locations, regardless of the method, is deductible. However, if you don’t go directly from one place to the other, your deduction is limited to what it would have cost you for direct travel.

 

3. Short business stops: It may be advantageous for you to stop off and visit a client or customer on the way into work or on the way home. Accordingly, you may deduct the cost attributable to the travel between your regular place of business and the client or customer’s place of business. But the rest of your commuting remains a nondeductible personal expense.

 

4. Temporary assignments: Your business may require you to work at a distant job site for a short period of time. Instead of making a long commute each day, you might decide to stay close to the work site and come home weekends. Assuming that the job lasts no more than a year, it qualifies as a temporary assignment. This means you can deduct your lodging and meal expenses, within certain limits, plus the travel  between the distant work site and home.

 

5. Business education: If you’re taking courses at a local college to improve your job skills, you may usually go straight to school after work on weekdays. The cost of the travel between work and the school is deductible (or between school and work if you’re taking a morning class).  

Naturally, you can only deduct those T&E expenses that are properly documented. (We’ll have more on this in a future article). Also, if you’re a company employee, you must claim these expenses as miscellaneous itemized expenses, subject to the usual limits

Edited September 3, 2014 by jklcpa
added direct link, title of the article, author, publication

[SCL]

the irs does not "frequently" challenge anything...1.5%? of all (150 million?) returns...

and weighted toward high? (1 million+ gross income?) returns = .5%? of all returns.

[kcjenkins]

the irs does not "frequently" challenge anything...1.5%? of all (150 million?) returns...

and weighted toward high? (1 million+ gross income?) returns = .5%? of all returns.

And just HOW does this snarky post add anything to the discussion?  Perhaps you should remember what I'm sure your mother told you...."If you can't say something nice, or helpful, don't say  anything at all."

 

And, yes, of those items they do challenge, business-related driving expenses,  especially when they involve local travel, are very high on the list.  

[Catherine]

the irs does not "frequently" challenge anything...1.5%? of all (150 million?) returns...

and weighted toward high? (1 million+ gross income?) returns = .5%? of all returns.

 

Absolutely INCORRECT.

 

Of all the items the IRS looks at carefully, business deductions involving the frequently-misunderstood rules on what are - and are NOT - deductible expenses are VERY high on that list.

 

This is completely and utterly separate from the overall percentage of returns selected (randomly or by flag) for further examination or audit.

 

cbslee was correct in stating that these deductions are a FREQUENT source of IRS challenge.  He is referring to items challenged and NOT to overall challenges.

 

Might I recommend that you spend a bit of our seasonal "down" time after October 15 at this excellent site?  

http://lessons.englishgrammar101.com/

 

I have used it myself to review portions that were not correctly taught in my school.  It starts very simply but increases in complexity quickly.

[Jack from Ohio]

the irs does not "frequently" challenge anything...1.5%? of all (150 million?) returns...

and weighted toward high? (1 million+ gross income?) returns = .5%? of all returns.

Your numbers are outdated and simply inaccurate.

[jklcpa]

cbslee was correct in stating that these deductions are a FREQUENT source of IRS challenge.  He is referring to items challenged and NOT to overall challenges.

 

To be clear, these weren't cbslee's assertions. His post was a direct cut and paste of an Aug 21st article by Ken Berry, CPA that was published in the CPA Practice Advisor entitled "5 Ways to Get Tax Deductions for Local Transportation Uses". I've added the title and given the author proper credit in the OP above.

[Jack from Ohio]

the irs does not "frequently" challenge anything...1.5%? of all (150 million?) returns...

and weighted toward high? (1 million+ gross income?) returns = .5%? of all returns.

 

Your numbers are outdated and simply inaccurate.

Last year, the IRS audited less than 1 percent of all returns from individuals, the lowest rate since 2005. This year, Koskinen said, "The numbers will go down."

Koskinen was confirmed as IRS commissioner in December. He took over an agency under siege on several fronts.

Last year, the IRS acknowledged agents improperly singled out conservative groups for extra scrutiny when they applied for tax-exempt status from 2010 to 2012. The revelation has led to five ongoing investigations, including three by congressional committees, and outraged lawmakers who control the agency's budget

[Catherine]

To be clear, these weren't cbslee's assertions. His post was a direct cut and paste of an Aug 21st article by Ken Berry, CPA that was published in the CPA Practice Advisor entitled "5 Ways to Get Tax Deductions for Local Transportation Uses". I've added the title and given the author proper credit in the OP above.

 

I had been wondering if the post was a test run of an article, pre-submission.  Thanks!

[jklcpa]

I had been wondering if the post was a test run of an article, pre-submission.  Thanks!

 

You're welcome.  I didn't see the actual article until I searched for it from here. The source was easy to find by highlighting the first sentence, right clicking, and choosing the option to search for that sentence or phrase.

[SCL]

And just HOW does this snarky post add anything to the discussion?  Perhaps you should remember what I'm sure your mother told you...."If you can't say something nice, or helpful, don't say  anything at all."

 

And, yes, of those items they do challenge, business-related driving expenses,  especially when they involve local travel, are very high on the list.  

i did not object to the content of the article or cbslee's posting it. it is a good article about local transportation deductions, especially after whatever jklcpa did to edit/clarify the article.

 

my "snarkyness" was directed at the very first word of the article from the author..."frequently"...and nothing else.

 

and no, you are desperately wrong (and snarky to boot, if you had a boot)..."of those items they do challenge, business-related driving expenses, especially when they involve local travel, are very high on the list."

 

of 1% or less of items challenged by the irs, driving expenses are not very high on the list.

perhaps your mother should have told you "if you can't say anything that is correct, then don't say anything at all." 

[SCL]

the irs does not "frequently" challenge anything...1.5%? of all (150 million?) returns...

and weighted toward high? (1 million+ gross income?) returns = .5%? of all returns.

 

Your numbers are outdated and simply inaccurate.

 

Last year, the IRS audited less than 1 percent of all returns from individuals, the lowest rate since 2005. This year, Koskinen said, "The numbers will go down."

Koskinen was confirmed as IRS commissioner in December. He took over an agency under siege on several fronts.

Last year, the IRS acknowledged agents improperly singled out conservative groups for extra scrutiny when they applied for tax-exempt status from 2010 to 2012. The revelation has led to five ongoing investigations, including three by congressional committees, and outraged lawmakers who control the agency's budget

i love it when normally reasonable and logical folk get dazed, confused, and their panties in a bunch that their desperate, so called argument against me proves my point.

 

i offered/allowed/said "1.5%?"....implying less. thanks jack!

[Jack from Ohio]

i did not object to the content of the article or cbslee's posting it. it is a good article about local transportation deductions, especially after whatever jklcpa did to edit/clarify the article.

 

my "snarkyness" was directed at the very first word of the article from the author..."frequently"...and nothing else.

 

and no, you are desperately wrong (and snarky to boot, if you had a boot)..."of those items they do challenge, business-related driving expenses, especially when they involve local travel, are very high on the list."

 

of 1% or less of items challenged by the irs, driving expenses are not very high on the list.

perhaps your mother should have told you "if you can't say anything that is correct, then don't say anything at all." Please cite the source of the information you are using to say>>> "...you are desperately wrong..."<<<

Your information lacks far more credibility.

[Jack from Ohio]

i love it when normally reasonable and logical folk get dazed, confused, and their panties in a bunch that their desperate, so called argument against me proves my point.

 

i offered/allowed/said "1.5%?"....implying less. thanks jack!

I was simply pointing out that your information, as posted, was desperately wrong.

[Catherine]

Whatever "raw numbers" are cited from the IRS in terms of overall queries or audits (and we professionals all know those have been going down for some years due in part to lack of staff) do not matter at all.  The audit percentage could be 0.00001% for all I care.

 

For those returns that ARE audited, business mileage is FREQUENTLY the reason/one of the reasons FOR the audit.

 

 

I stand by my assertion and SCL you are extremely good at trying to poke holes in people's arguments -- and in the end, missing the point.  Don't you have better things to do with your time?  

 

I do; there will be no more responses from me on this topic because SCL is determined to dig his heels in harder and harder.  This is not worth any additional effort on my part.

[kcjenkins]

DITTO

[michaelmars]

Whatever "raw numbers" are cited from the IRS in terms of overall queries or audits (and we professionals all know those have been going down for some years due in part to lack of staff) do not matter at all.  The audit percentage could be 0.00001% for all I care.

 

For those returns that ARE audited, business mileage is FREQUENTLY the reason/one of the reasons FOR the audit.

 

 

I stand by my assertion and SCL you are extremely good at trying to poke holes in people's arguments -- and in the end, missing the point.  Don't you have better things to do with your time?  

 

I do; there will be no more responses from me on this topic because SCL is determined to dig his heels in harder and harder.  This is not worth any additional effort on my part.

that's why we need a political forum,  to keep the "snarkiness" out of the general forum.

[BulldogTom]

Is there some history between the members on this thread that I am missing.  I don't see anything "snarky" (whatever that is) in any of it.  What am I missing from this.  The OP was a reprint of an article, and the follow up was about audit percentages.

 

I guess I should be more sensitive to peoples opinions, but this post seems to have some undertones that I don't see.

 

Tom

Hollister, CA

[SaraEA]

According to Circular 230, preparers aren't supposed to consider the chance of audit, or chance of winning in audit, in their decision to take one position or another.  That decision is supposed to be based on substantial authority (Code, Regs, etc.).  I don't think anyone on this board would allow a client to frivolously claim transportation expenses without good reason.  Those clients in sales, or who have bona fide home offices, most likely. Those who live in RI and work in New York City, unlikely.  Isn't that what we're really talking about here?

[Jack from Ohio]

...chance of winning in audit, in their decision to take one position or another. 

 ...based on substantial authority (Code, Regs, etc.). 

Are these not one in the same?  If not, explain why?

[SCL]

DITTO

KUDOS!

you have come full circle on your merry-go-round.

you were the one (along with a couple of your pets) who originally/arbitrarily attacked me over the word "frequently".