Finding Your Deduction

• 1). Record your commuting mileage and other business-related transportation expenses. At the end of the year, your mileage log should show the date, reason for driving and mileage for every time you drove your vehicle. In addition to recording mileage, keep a record of all other vehicle-related expenses such as maintenance, inspections, registration, tolls, parking fees and taxes. The only expense you do not need to record is the cost of gasoline.
  
  
• 2). Determine whether or not your mileage is deductible. If you are merely commuting to your work place and back home, that mileage is not deductible. However, if you commute to your work place and then you are required to drive to a different location other than your work place as part of your job, you can deduct that mileage. You can also deduct commuting mileage if you have two jobs and travel directly from one job to the next job without first making a stop at home.
  
  
• 3). Create a home office if you do not already have one. Many Americans have small side jobs or businesses where they can work fully, or at least partially, at home. Due to an IRS loophole regarding commuting mileage, if you have an office at home where you start the day, and then drive to another location for work, the mileage is deductible because you are commuting from one business to another. If you can end the day working at home again, you can also deduct the mileage driven for your commute back to your home office.
  
  
• 4). Check your W2 and pay stub information to make sure your company does not already reimburse you for travel expenses. Consult the financial office of your company to double-check about travel expenses and whether there is a plan in place for reimbursement. If there is a plan, utilizing the commuting reimbursement plan can save some of the agony of trying to figure transportation costs into your taxes.
  
  
• 5). Calculate your total deductible mileage and find the form titled Schedule C. The appropriate box is found on page 2. You can also use Form 2106 as an alternative to Schedule C. If you are adding vehicle depreciation, also obtain Form 4562.