Business Miles vs Commuting Miles

What are business miles?

The Internal Revenue Service (IRS) defines business miles as any miles driven for business purposes outside of commuting to and from your primary business location.

Examples of business miles include:

• Client meetings: Traveling to meet with clients or potential clients.
• Conferences and seminars: Attending industry conferences, workshops, seminars, or trade shows related to your business.
• Site visits: Traveling to visit project sites, job sites, or facilities related to your business operations that are not your primary work location.
• Supplier visits: Traveling to meet with suppliers or vendors.
• Training sessions: Driving to attend training sessions, workshops, or classes that directly relate to your business activities but are not held at your primary work location.

As you see, almost every mile you drive for work, except for your commute, is considered a business mile. 

However, you should remember that a trip can’t be classified as business travel if you have other personal reasons to make that trip. For example, if you’re visiting family in your hometown and you happen to meet a client who’s on the way, you should only include mileage driven to see the client. The IRS is very particular about this distinction, so maintaining accurate mileage records is crucial.

The good news is there’s no limit to the number of business miles you can deduct. As long as the travel is necessary for your work and properly documented in your mileage log, you can claim the standard mileage rate for every mile driven.

What are commuting miles?

Commuting miles represent the distance from your home to your workplace and back. Generally, commuting isn’t considered business travel, so any commuting mileage is non-deductible and non-reimbursable.

Commuting expenses, including tolls and parking fees, are also not deductible and should not be reimbursed tax-free. Even if you engage in business activities during the commute, like making work-related calls, it’s still considered commuting mileage. 

Under most circumstances, your first and last drive of the day (one that begins or ends at your home) is considered a commute drive, even if you drive to a client’s office instead of your primary work location. However, there’s a very important and increasingly common exception for remote workers working primarily from home. If your home is your primary workplace and you only occasionally visit company headquarters, those trips aren’t considered commuting and can be reimbursed tax-free.

What are the key differences between business miles and commuting miles?

There isn’t much difference between business travel and commuting for the person driving. In both instances, they’re just driving a car for work purposes. But for the IRS, those are two completely separate things. 

Business miles can be reimbursed tax-free and are deductible. That means drivers can be reimbursed for mileage tax-free as long as the reimbursement rate is at or below the IRS standard rate. The rate for 2024 was set at 67 cents per mile. Self-employed people can also deduct business mileage from their tax return at the same rate.  

Commuting miles can’t be reimbursed tax-free and are not deductible. The IRS views commuting as a personal expense, and therefore, any reimbursement amounts paid for commuting need to be taxed as regular income. Self-employed people also cannot claim a tax deduction for these miles. This rule applies even if you do some work during your commute, such as making business calls or listening to work-related audio materials.

Best practices for managing commute mileage 

For employers

Managing commute mileage is a must for businesses. If you reimburse employees for mileage and accidentally count a commute, you’ll be giving employees untaxed income, which would put you at odds with the IRS rules. Moreover, reimbursing for commutes can create an unnecessary expense for your budget. 

Setting a commute mileage policy, like a team-wide commute distance, can help you stay compliant and reimburse drivers fairly. 

For drivers and self-employed people

If you get reimbursed for driving at work or are self-employed and claim mileage deductions on your tax return, you also need to be mindful of commute miles. Counting a commute and adding it to your business mileage report would mean you’d end up with untaxed reimbursement income. That would make your tax return incorrect and may result in tax penalties. 

Similarly, if you accidentally claim commute miles as a business mileage deduction, your tax return would also be incorrect. 

Best practices for tracking and claiming mileage

The easiest way to keep business and commute mileage separate is making sure you track every drive. Mileage tracking is a key IRS requirement for tax deductions and tax-free employee mileage reimbursements. Drivers are required to track each trip and record key pieces of information, including:

• The date of the trip
• The total mileage
• The locations you drove to and from
• The business purpose of the trip

While this may seem overwhelming, the process can be simplified significantly using a mileage tracker, like MileIQ. The app works in the background of your phone, tracking each drive automatically — all you have to do is categorize the drive  with a swipe.  MileIQ also lets you create and share reports with your employer. . 

If you prefer a manual approach, you can keep a physical mileage log in your vehicle and record the necessary details for each trip, or create a spreadsheet. However, it’s worth noting that this method is much more prone to error and much less convenient. 

Not all work-related mileage is equal

While it may feel like driving to work should be considered a“work-related” activity, the IRS doesn’t see it that way.

Knowing what constitutes business miles vs commute miles can help you avoid IRS audits and penalties. 

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*Note: The materials on this website have been prepared by MileIQ for informational purposes only and are not legal advice.