Tax deductions for commuting not an option


— Steamboat Springs commuters don't get a tax break for their travels, but they should be aware of a business travel deduction option if they use their car for work expenses.

"From home to work and back again, there are no deductions," said tax accountant Cristina Harmon of Linda and Associates LTD.

She said the Internal Revenue Service views that situation as a personal choice to live a certain distance away from their work, so no deductions are offered.

The most recent study completed in 1999 by the Steamboat Springs Chamber Resort Association showed about 35 percent of the employees of the 850 businesses that are members of the chamber commute to work from out of town.

Half of them said they commute because there is no affordable housing in Steamboat Springs.

Harmon said the lack of affordable housing issue in Steamboat Springs may point out a discrepancy in the tax law, because the law doesn't cover people who are forced to live far from their work.

"If they have a home office," explained CPA Paul Strong, "then anything is deductible."

He explained that any work-related trip for someone who is self-employed is deductible, even if it is commuting to town everyday.

In the construction industry, he explained, many people decide to be an independent contractor instead of being an employee for a company so they qualify for the tax breaks.

Employees who use their car for business purposes, above and beyond traveling to and from work, do have deduction options. If their employer doesn't compensate them for miles, they can qualify to deduct those miles from their taxes at 32.5 cents a mile. But there are conditions, Harmon said.

To receive the deductions, an unmarried employee would have to surpass the standard deduction of $4,400. For a married person who files his or her taxes jointly, the standard deduction is $7,350.

In other words, Harmon explained, they would have to have more than $4,400 or $7,350 worth of deductions on their taxes. That includes other deductions, like property taxes or interest on mortgage.

If it is just a deduction of miles alone, a single person would have to drive about 13,500 work-related miles to reach the $4,400.

Strong added that in addition to that law, the money that person gets back is above and beyond 2 percent of his or her gross income. So if the person makes $20,000 a year, the deduction would be minus $400.

For those who make a large amount of money a year, they usually don't get any money back for transportation expenses because the 2 percent is more than they deduct, Strong said.


Use the comment form below to begin a discussion about this content.

Requires free registration

Posting comments requires a free account and verification.