Knowledge is the key to avoiding commuting mileage because it’s not deductible.
We can eliminate commuting and make those trips deductible from your home to your office.
The law gives you 2 ways to eliminate commuting from your home to your outside-the-home office:
- Make a temporary business stop on the way to the office.
- Establish a home office that qualifies as a principal office.
Temporary Business Stop
Temporary Business Stop: The temporary business stop strategy is for people who work from home and do not have an office. The stop turns commuting from home to the office into a deductible business trip.
Here you have 3 examples:
#1. Louis is a property and casualty insurance agent who does not claim a home-office deduction but must photograph a property before the insurance company issues the policy. His trip from his home to the property produces business miles.
#2. Louis, the same guy, drives from his home to his downtown office, and that’s a non-deductible commute.
Warning: The IRS labels a trip from your home to a business stop as the “first stop,” a non-deductible commute.
#3. You drive 17 miles to a business stop and then return home. Because your only office is inside the home and does not qualify as a principal office, your 34-mile round trip is a personal non-deductible commute under the IRS’s first and last stop rule.
Home-Office Solution: If you have an office both in your home and downtown, you don’t need to commute between the two. To work from home, you need an office in your home that qualifies as your principal office under the law.