In this installment of Ask The Tax Expert, we walk through the IRS definition of a temporary work location. This can impact the amount of your mileage deduction for the year.
Q. I am an Estate Sale Director. I travel from my home and back, to a different Estate Sale that my company is running each week (I don't own the company). There is no formal business address or home office, as we set up, price and run people's estate sales. Are the homes I'm working at considered temporary work locations? Can I claim my mileage to and from home?
In other words, for 4 days this week, I'll travel to and from "123 Main Street." I'll set up and hold estate sales for that time. Next week, I'll set up and run another sale at "456 Main Street."
- Maggie R., Provo, Utah
What's the definition of a temporary work location?
A. You generally can't deduct driving from home to your to regular work location. This is considered nondeductible personal commuting by the IRS.
However, the commuting rule doesn't apply when you travel between your home and a temporary work location. A temporary work location is any place where you realistically expect to work (and do in fact work) less than one year.
If you have a regular place of business outside your home, you can deduct the cost of commuting to a temporary work location. This also applies if you have a qualifying home office.
Yet, if you have no regular work location you may only deduct the cost of commuting to a temporary work location that is outside your metropolitan area. Generally, a metropolitan area includes the area within city limits and the suburbs that are considered part of that metropolitan area.
The places where you conduct estate sales certainly qualify as temporary work locations. Since you don’t have an outside office or home office, you can only deduct travel to estate sale locations outside your metropolitan area.
Each week, our resident small business tax expert, Stephen Fishman, answers your small business tax questions.
