How do I determine what is commuting vs. business travel?

September 13, 2006

Date:  Thu, 20 Apr 2006
From:  Bob

Hello Mr. Gray,

I am an outside salesperson. My home is in Mountain View. The corporate office is in San Francisco. Although I do not claim a home office deduction, I will not be going to the San Francisco office most days. My home will be my base of operations. How will I figure what is commuting and what is legitimate business travel? There is a desk I can use in San Francisco, but not my own office.

Thank you!
Bob

Answer

Date:  Fri, 05 May 2006

Hello Bob,

The tax rules aren’t friendly for outside salespersons.

The ideal arrangement would be to live next door to the corporate office, and to start and finish each day there.

Go to the IRS web site (www.irs.gov) and get a copy of Publication 463. Especially study the section on transportation (starting page 13).

Since you don’t have a "regular job location", I suggest that your transportation from your home to the first call of the day and from your last call of the day to your residence should be commuting and your other transportation for calls to customers are business transportation. Keep a log or diary listing the customers called and your beginning and ending mileage for your business transportation.

Since there are so many outside salespersons in our country, it’s amazing that we have such poor guidance for their deductible expenses. Everyone is too busy making money to fight with the IRS to create case law for the rest of us.

By the way, some salespersons have been found to have no tax home, and can’t qualify to deduct "out of town" travel expenses, despite constantly traveling on business!

Good luck!


Mike Gray

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