Business Miles vs Commuting Miles (and Why It Matters)

Business miles are deductible. Commuting miles are not. The IRS draws the line based on what the trip's purpose is and where it begins or ends. Most drivers get this right for the obvious cases and lose money on the edge cases.

Source: IRS Publication 463, Travel, Gift, and Car Expenses

The Default Rule

Driving from home to your regular place of work is commuting, even if you talk on a business call the entire drive. Driving home from your regular place of work at the end of the day is commuting. These miles are personal, not business, and they are not deductible.

Driving from your regular workplace to a client, supplier, job site, or any other business destination during the workday is a business mile. So is the drive back, if it ends at the workplace. So is driving between two business destinations.

Home Office Changes the Rules

If you have a qualifying home office (a space used regularly and exclusively for business), it counts as your principal place of business. From a home office, the drive to your first business destination of the day is a business mile, not a commute. The drive home from your last destination is also a business mile.

This is one of the largest deduction differences between W-2 workers and self-employed workers with home offices. The same physical drive, same car, same destination is commuting for one and a business mile for the other.

Temporary Job Sites

A drive from home to a temporary work location outside your usual metro area is a business mile, even with no home office. The IRS defines temporary as expected to last and actually lasting one year or less.

A drive from home to a temporary work location inside your usual metro area is a business mile only if you also have a regular workplace. If you work entirely at temporary sites with no regular base, the IRS treats the first drive of the day as commuting.

Second Job

Driving directly from your first job to your second job in the same day is a business mile. The drive home from the second job is still commuting. This rule applies whether the jobs are W-2, 1099, or a mix, because it is not about deduction eligibility, it is about characterizing the mile.

What This Looks Like in Practice

• Plumber leaving home for the first job. Commuting unless there's a home office, or unless the home is the shop. With a home office that qualifies, business mile.
• Sales rep driving from the office to a client. Business mile.
• Real estate agent driving from one showing to the next. Business mile.
• Real estate agent driving from home to the first showing of the day. Business mile if there's a home office, commuting if there isn't.
• Uber driver driving from home to start the shift. Commuting until the app is on. The IRS treats period 1 (online and waiting) as the start of the business activity.

The Practical Test

A useful question to ask: "Would I have made this trip if I were not running this business?" If the drive only exists because the business exists, it is a business mile. If you would have driven that route anyway as part of normal life, it is commuting.

FAQ

Is the drive to a coworking space commuting?

If the coworking space is your regular workplace, yes. If it is one of several places you work, the IRS may treat the first drive of the day as commuting and intra-day drives between work locations as business miles.

What about driving for groceries between client meetings?

The grocery stop is personal, the drive to and from the grocery stop is personal. The drive between two client meetings is business, but if you take a substantial detour for personal reasons, the detour portion is not deductible.

Are airport drives for business travel deductible?

Yes. Driving to the airport for a business trip is a business mile. Driving home from the airport at the end of the trip is also a business mile.

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