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Save on business taxes with local transportation deductions

Did you know that some of the transportation costs you and your employees incur for your business might help you save on taxes? Here’s a simple breakdown to help you understand how local transportation deductions work.

What counts as “local transportation”?

Local transportation refers to travel near your main workplace that doesn’t involve being away long enough to require sleep or rest. Your “tax home” is the city or area where your business is based. This is different from long trips or business travel, which have separate tax rules.

Commuting costs: What’s not deductible

Here’s the bad news: the costs of commuting between your home and your regular work location aren’t deductible. That’s true even if you’re catching up on emails or making calls during your commute.

Exception: If you’re commuting to a temporary work location outside your usual area (lasting less than a year), those costs can be deductible.

What is deductible?

Once you’re at work, any local trips you take for business purposes can be deducted. For example:

• Driving from your office to meet a client or pick up supplies.
• Traveling between two business locations.

Tips for tracking expenses

Good recordkeeping is key to getting the most out of your deductions. Here’s how to stay organized:

• Public transportation or taxi: Save receipts or jot down the details (date, amount, destination, and purpose).
• Personal Vehicle: Track the miles driven for business, along with any tolls or parking fees.

For your car, you can calculate deductions using either:

1. The standard mileage rate: In 2024, it’s 67 cents per mile, plus tolls and parking.
2. Actual expenses: This includes gas, repairs, insurance, and more (you’ll need detailed records).

Self-employed vs. employees: What’s allowed?

If you’re self-employed, these deductions are all available to you.

However, under current tax laws (2018–2025), employees can’t deduct unreimbursed transportation costs. These deductions may come back in 2026, but the rules could change again depending on Congress.

Stay organized, Save money

By keeping clear records and understanding what qualifies, you can make sure you’re taking full advantage of transportation cost deductions for your business. Questions? Let us know—we’re here to help!

The post Save on business taxes with local transportation deductions appeared first on Padgett Advisors.