Commuting Miles vs. Business Miles: What’s the Difference?

Commuting miles are the amount of mileage that an employee drives to and from work. In comparison, business miles involve the mileage that employees drive to different work locations throughout a workday.

What is the difference between Business and Commuting Miles? Which are deductible?

What are business miles?

Business miles represent the distance that an individual travels to get from one workplace to another. For example, if a doctor works in numerous clinics, they may travel several business miles to get from one clinic to another. Your employer may provide you with a tracker so that you can track your business mileage automatically, or you may track it manually in a document.

While business miles typically involve the amount of miles that a staff member drives, it can sometimes involve different types of transportation, like airplanes, buses, trains or ride-sharing services. In these cases, the IRS may deduct taxes based on the amount of money that an employee pays for their travels rather than the amount of money they spend on gas.

What are commuting miles?

Commuting miles represent the distance that an individual travels from their home to their workplace and back. Employers may compensate their employees for driving long commutes to work, though the Internal Revenue Service (IRS) doesnt offer deductions for commuting miles. The length of your commute may be a factor you consider when deciding if you want to work for a company. You may also choose a job depending on if the company decides to reimburse you for long commutes.

While the IRS doesnt usually reimburse employees for commuting miles, they occasionally make exceptions in specific commuting situations. Here are some instances where the IRS may reimburse you for commuting miles:

Commuting miles vs. business miles

Here are several differences between commuting miles and business miles:

Reimbursements

Type of mileage

The IRS considers commuting miles and business miles as two separate types of mileage. Commuting miles are personal miles, which means that individuals drive from their home to their workplace and from their workplace to their home. Since its essential for employees to drive to work each day, the IRS considers commuting miles as daily travel expenses. The IRS considers business miles as extra business expenses, which is why they allow for tax deductions.

Time that the mileage occurs

Commuting miles and business miles typically take place at different times during a workday. Commuting miles often occur before and after work, since they involve an employees commute arriving and departing from their workplace. Business miles often occur during the workday. Depending on the employees duties and position, they may only use business miles a few times a day, or they may spend most of their workday driving business miles. For example, a pizza delivery associate may spend most of their shift driving business miles to different deliveries.

Calculation

Commuting miles and business miles involve different calculations. Its less common for employees to calculate commuting miles, since the IRS doesnt reimburse you for the amount of miles you drive to and from work. To calculate commuting miles, find the number of miles that it takes to drive to work each day, then multiply that number by two so that you can account for the drive home. For example, if you live 10 miles from your home, then your daily average commuting miles would be 20 miles.

To calculate the amount of business miles that you drive, add up the amount of miles that you travel between each workplace. Once you add up the total amount of business miles, multiply it by the standard mileage rate for the year. The product of your calculation is the amount that you may be eligible to receive as a reimbursement. For example, if you drive 20 business miles per day, and the standard mileage rate is $0.50, then youd be eligible to receive $10 as a reimbursement each day.

Cost of driving

The cost of commuting miles and business miles refers to the total cost of gas that your car requires while driving. The cost of driving for commuting miles and business miles differs, depending on the length of your commute to work and the amount of business miles you drive each day. Typically, the cost of commuting miles is lower than the cost of business miles, so you may have to drive to several workplaces throughout the day.

Employee control

While employees can decide the amount of miles they commute to work, while business decide the amount of business miles that staff must complete during the workday. If an employee decides that they are commuting further than they would like, then they may decide to pursue a job that involves less commuting miles. They may also decide to use other means of transportation for commuting to work, like using public transportation or carpooling with a colleague.

Employees typically have less control over the amount of business miles they must travel, since their work may require them to travel to various locations throughout the day. For example, a company may assign a sales associate to travel to five different locations to give a sales presentation.

Number of stops

The number of stops that an employee can make while driving differs depending on if theyre using commuting miles or business miles. If theyre commuting to work, they can make as many stops as they need, since they dont need to track the amount of miles they commute for reimbursement eligibility.

The IRS requires that anyone seeking reimbursement eligibility take straight routes to each workplace, which means they make limited stops along the way to their destination. This can help the IRS track the exact number of business miles that you drive in a workday, which ensures that the reimbursement amount is accurate.

Please note that none of the companies mentioned in this article are affiliated with Indeed.

FAQ

What’s the difference between business miles and commuting miles?

If a business mile takes you from one workplace to another, a commuting mile takes you between your home and a workplace. Driving between your house and an office building, for example, would be considered commuting.

What is considered a business mile?

You can claim the business-miles deduction for trips from your workplace to job sites, meetings with customers and for business errands. The commute from home to work is not deductible unless you’re driving from a home office to another place of work.

What does the IRS consider commuting?

The IRS defines commuting as “the cost of transportation between your home and your main or regular place of work” and states that these expenses cannot be deducted from your taxes.

How do you calculate commuting miles?

Anytime you are driving from your home to your first job of the day or your regular place of business, you do not get to deduct or count those miles because they are commuting mile. Any other miles that you drive for your business are your miles driven for the business.

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