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Tax Rules On Auto, Entertainment And Travel
III. Local Transportation
It includes the cost of transportation of the employee from one place to another in the course of his or her employment, while he or she is not away from home in travel status.
Cost of meals and lodging.
- Even when the job is temporary or the job location changes daily.
- Regardless of distance.
- Even though the employee has to make the trip several times a day.
- Even if the taxpayer works during the trip or places advertising on the vehicle.
Note: The fact that the taxpayer is handicapped and requires special transportation will not change this rule, although the taxpayer may be entitled to a medical expense deduction.
Because it is considered a matter of personal choice rather than a business requirement.
- Fees paid to park a car at the taxpayer’s place of business.
- If a taxpayer gets their work assignments at a union hall and then goes to their place of work, the costs of getting from the union hall to the taxpayer’s place of work.
The commuting expense is not deductible.
R.R. 90-23
Note: Transportation between a taxpayer’s residence and one or more regular places of business remains non-deductible unless the home is the taxpayer’s principal place of business.
It is any location where the taxpayer performs services on an irregular basis.
In R.R. 94-47.
Note: The IRS states that it will not follow the Walker decision and that R.R. 90-23 is not intended to apply to the situation involved in the Walker case.
- If a taxpayer has one or more regular work locations away from the taxpayer’s home, the taxpayer may deduct daily transportation expenses traveling between the home and a temporary work location in the same trade or business, regardless of the distance involved.
- If the taxpayer’s home is his or her principal place of business, he or she may deduct daily transportation expenses traveling between the home 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.
- A taxpayer may deduct daily transportation expenses traveling between the taxpayer’s home and a temporary work location outside of the metropolitan area in which the taxpayer lives and normally works. However, unless the rules in (1) or (2) apply, transportation from home to a temporary workplace within the metropolitan area is not deductible.
Note: Since there is no effective date in the Revenue Ruling, it apparently applies retroactively.
Employment at a work location is realistically expected to last for more than a year, or there is no realistic expectation that the employment will last for a year or less.
A business expense deduction is allowed but only for the expenses which exceed the cost of commuting by the same mode of transportation without the tools and equipment.
If a taxpayer works at two places in a day, whether or not for the same employer, they can deduct the expense of getting from one workplace to the other.
No transportation expense is deductible.