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Jb-socal
Level 1

Business Mileage Two Workplaces with one significantly closer to home

Hi -

 

My employer pays an auto allowance and we record mileage based on IRS rules to make the reimbursement tax free. I need documentation to support my reimbursement request. 

 

My “regular” place of work (A) is 50 miles from my home (B). The main office (C) is 5 miles from my home. I typically spend 2 days per week at my regular place of work and the rest of the week at a variety of locations. 

 

As I interpret the IRS rules, travel between workplaces is reimburseable so even though C is located on my way home if I go from A to C during the work day that mileage is reimburseable.

 

I often go to the main office for meetings and then go home from there. I do not claim mileage from C to B, only the miles from A to C. 

 

Similarly, I will sometimes pick up materials at C first thing in the morning and then go to A (my regular place of work). As I understand it, that mileage is then also reimburseable since I started that workday at a different work place and it is once again mileage between work places. 

1 Best answer

Accepted Solutions
DanielV01
Employee Tax Expert

Business Mileage Two Workplaces with one significantly closer to home

Substantiation depends on your employer's requirements.  Chances are that your employer will want a log of your business travel.  However, you do have the correct understanding of tax law requirements.  What will be necessary is to meld what tax law requires with your company's policy to substantiate the travel.  This substantiation is so that:

  1. Your company pays you reimbursement for travel, and
  2. The reimbursement is not taxable to you (and still deductible to the company).

If you are salaried-exempt, undoubtedly your company will want substantiation that there was a legitimate business reason for the travel (even if it is something like picking up/dropping off files at work location C), and when the travel occurred.  This same substantiation will (or should) also satisfy IRS requirements.  (In these cases, it is more likely that the IRS would question the company's books first.  If reimbursements were found out to not follow rules, then the company would send you a corrected W-2 that the reimbursement is now considered to be taxable wages, and you would amend your personal return to show the increased taxable income).  

 

If you are an hourly employee, the substantiation likely will be scrutinized even more, because in addition to the reimbursement, the company would have to pay you for your travel time between the work places.  Again, this is more of a company issue as compared to a tax issue.  However, there's no doubt that your company wants to make sure they are paying you for legitimate work (and reimbursing accordingly).

 

Still, you are correct that as long as the travel is between A and C (even though C is close to home), you can claim reimbursement for this travel as long as there is a legitimate business purpose for the travel.  Travel between B and A (home and main office) or B and C (home and second office), are never deductible or reimbursable.  But, if you can legitimately substantiate your travel, this is one tax provision that works in your favor, since this type of travel is no longer deductible on your personal return, due to the tax law changes brought in by the Tax Cuts and Jobs Act of 2018.

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3 Replies
xmasbaby0
Level 15

Business Mileage Two Workplaces with one significantly closer to home

Please tell us if you are a W-2 employee or an independent contractor who will be getting a 1099Misc.  If you are a W-2 employee then your mileage is not deductible on your federal return, per the tax law changes that went into effect for 2018 returns and beyond.

 

https://ttlc.intuit.com/questions/4482873-which-federal-tax-deductions-have-been-suspended-by-tax-re...

 

If  you are an independent contractor then your mileage to commute from home to work or work to home is not deductible, but mileage from job to job during the day can be entered on your schedule C.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Jb-socal
Level 1

Business Mileage Two Workplaces with one significantly closer to home

Hi! I am a W2 employee but this is not for my federal tax returns. This is for my employer’s taxes as to whether I will be taxed on my auto allowance or not. 

 

The auto allowance is an accountable plan where we track our mileage every month and submit an auto log. Business miles as allowed by the IRS are then credit against the allowance, lowering the tax liability to me for receiving the auto allowance. 

 

For example, if I got 50 dollars in auto allowance per month, and drive 100 business miles that month, I would completely offset the taxes on that auto allowance and my employer would not show the allowance as taxable on my paycheck. 

DanielV01
Employee Tax Expert

Business Mileage Two Workplaces with one significantly closer to home

Substantiation depends on your employer's requirements.  Chances are that your employer will want a log of your business travel.  However, you do have the correct understanding of tax law requirements.  What will be necessary is to meld what tax law requires with your company's policy to substantiate the travel.  This substantiation is so that:

  1. Your company pays you reimbursement for travel, and
  2. The reimbursement is not taxable to you (and still deductible to the company).

If you are salaried-exempt, undoubtedly your company will want substantiation that there was a legitimate business reason for the travel (even if it is something like picking up/dropping off files at work location C), and when the travel occurred.  This same substantiation will (or should) also satisfy IRS requirements.  (In these cases, it is more likely that the IRS would question the company's books first.  If reimbursements were found out to not follow rules, then the company would send you a corrected W-2 that the reimbursement is now considered to be taxable wages, and you would amend your personal return to show the increased taxable income).  

 

If you are an hourly employee, the substantiation likely will be scrutinized even more, because in addition to the reimbursement, the company would have to pay you for your travel time between the work places.  Again, this is more of a company issue as compared to a tax issue.  However, there's no doubt that your company wants to make sure they are paying you for legitimate work (and reimbursing accordingly).

 

Still, you are correct that as long as the travel is between A and C (even though C is close to home), you can claim reimbursement for this travel as long as there is a legitimate business purpose for the travel.  Travel between B and A (home and main office) or B and C (home and second office), are never deductible or reimbursable.  But, if you can legitimately substantiate your travel, this is one tax provision that works in your favor, since this type of travel is no longer deductible on your personal return, due to the tax law changes brought in by the Tax Cuts and Jobs Act of 2018.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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