Q: Can I deduct my commuting expenses from my federal taxes?
A: According to the IRS mileage rules, your drive to work and back home are commuting miles, so they are not tax deductible generally. You can’t deduct commuting expenses even if you work during the commuting trip. You can’t deduct the cost of using your car in a nonprofit car pool. You don’t need to include payments you receive from the passengers when reporting your income. These payments are considered reimbursements of your expenses.
Not all is lost, however, to reduce your taxes. You can use pre-tax dollars to pay for your commute (up to $280/month for transit and vanpooling and up to $280/month for qualified parking) and save on taxes as well as gas, parking and tolls. The average person would save about $600 per year by switching from after-tax payment of your parking or transit costs to pre-tax payment. Bottom line is that tax savings from qualified transportation benefits means keeping more of your money in your pocket.
See Best Workplaces for Commuters’ frequently asked questions about qualified transportation fringe benefits.
