Temporary Work Location: IRS Mileage, Tax Home, and Records

Travel to a temporary work location is deductible under IRS rules when the assignment is realistically expected to last, and actually does last, one year or less — but whether you personally can claim the deduction depends on how you’re paid. Self-employed people and independent contractors write these costs off on Schedule C. Most W-2 employees cannot deduct unreimbursed travel at all on their federal returns, and that block is now permanent.

What Counts as a Temporary Work Location

The dividing line is one year. Under Revenue Ruling 99-7, a work location is temporary if your employment there is realistically expected to last one year or less, and it in fact lasts that long.¹ Meet both conditions and the IRS treats you as traveling for business rather than relocating, so your transportation to the site is deductible.

“Realistically expected” carries more weight than the calendar. A six-month contract that wraps in five months was temporary the whole time. An assignment expected from the start to run longer than a year, or one with no realistic end date within a year, is indefinite from day one, and none of the travel is deductible.¹

When the Expected Duration Changes

This is where deductions most often go wrong. Say you begin a nine-month project, then five months in the scope expands and the client now expects fourteen months of work. The location becomes indefinite on the date your expectation changes, not on the date you cross the twelve-month mark.¹ Every trip before that date stays deductible. Every trip after it does not. Note the date the timeline shifted, because an examiner will look for it.

Returning to a Site After a Break

If you finish one assignment, leave, and later return to the same location for a new project, the length of the gap matters. The IRS has said a break of two to three weeks is too short to restart the one-year clock. A break of more than one year is long enough to treat the return as a fresh temporary period, assuming the new assignment is expected to end within a year.² Gaps in between are decided case by case with no bright-line rule.

Who Can Actually Claim the Deduction

Independent contractors and sole proprietors deduct travel to a temporary work location as an ordinary business expense on Schedule C. Statutory employees — a narrow group that includes certain full-time life insurance agents and traveling salespersons — also use Schedule C.³

Regular W-2 employees are in a different situation. The Tax Cuts and Jobs Act suspended miscellaneous itemized deductions starting in 2018, and legislation passed in 2025 made that suspension permanent by removing the sunset date.⁴ So even if you drive hundreds of miles each week to a clearly temporary assignment, you get no federal deduction as a salaried or hourly employee.

The Employee Exceptions

A few employee categories can still deduct unreimbursed business expenses using Form 2106: Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees claiming impairment-related work expenses.⁵

The reservist exception is the one most people use. To qualify, you must travel more than 100 miles from home in connection with reserve duty. The unreimbursed travel goes on Form 2106 and flows through to Schedule 1.⁶ The performing artist exception has strict income and employer-count requirements that rule out most workers who might casually call themselves performers.⁵

Accountable Plans for Employees

If you’re a W-2 employee who can’t take a personal deduction, an accountable plan through your employer is the practical route to recovering travel costs. Reimbursements under a qualifying accountable plan aren’t taxed and don’t appear on your W-2. Three conditions have to be met: a business connection for the expense, timely substantiation to your employer, and return of any amount that exceeds actual costs.⁷

Miss any of the three and the IRS treats the arrangement as a nonaccountable plan. The reimbursement becomes taxable wages.⁷ Worth thinking about before accepting a flat car allowance or mileage stipend with no receipts required.

Which Trips Actually Qualify

Commuting from home to your regular workplace is never deductible, no matter how far the drive.⁸ The deduction begins when you travel to a temporary site, but which trips count depends on your work pattern.

If you have one or more regular workplaces away from home, travel from your residence to a temporary site in the same trade or business is deductible, regardless of distance.
If you have no regular workplace but normally work in a metropolitan area, you can deduct daily transportation to a temporary site outside that metro area.
If your home office qualifies as your principal place of business, every trip from home to another work location in the same trade or business is deductible, whether that location is temporary or regular.⁷

Your Tax Home

Your tax home is generally the entire city or area where your main place of business sits, not where your family lives.⁷ If you work in more than one location, the IRS looks at time spent, level of business activity, and income generated in each place to figure out which is your main one.

Workers with no fixed workplace face a three-factor test involving work done near the residence, duplicate living expenses, and ties to the home area. Satisfy all three and your residence can be your tax home. Satisfy only one and you’re treated as an itinerant, your tax home follows you, and you can’t deduct travel expenses at all.⁷

Two Jobs in One Day

Travel from one workplace to a second on the same day is deductible, even if the two employers aren’t related.⁷ A personal stop between them limits your deduction to what a direct trip would have cost. Transportation to a part-time job on a day off from your main job is commuting, not business travel.

Calculating the Vehicle Deduction

Once a trip qualifies, you choose between two methods for the car portion: the standard mileage rate or actual expenses.

Standard Mileage Rate

For the 2026 tax year the rate is 72.5 cents per business mile.⁹ The rate covers gas, insurance, depreciation, and general wear. Drive 8,000 business miles in the year and your deduction is $5,800.

Timing rule: if you own the vehicle, you have to pick the standard mileage rate in the first year the car is available for business use. After that first year you can switch to actual expenses. For a leased vehicle, if you start with the standard rate you have to keep it for the entire lease, including renewals.⁹

Actual Expenses

The alternative is tracking everything: gas, oil, repairs, tires, registration, insurance, and lease payments. You then take the business-use percentage (business miles divided by total miles) of those costs. This method often produces a bigger deduction for expensive vehicles with high operating costs, but the recordkeeping burden is much heavier.

Under either method, tolls and parking fees for business travel are deductible on top of the mileage figure or actual expenses.

Depreciation Caps

If you use actual expenses and own the vehicle, depreciation is a large part of the deduction, but the IRS caps how much you can claim on passenger vehicles. For cars placed in service during 2026, the first-year limit is $20,300 with bonus depreciation, or $12,300 without it. The second-year cap is $19,800, the third year is $11,900, and each year after that is $7,160.¹⁰ Only the business-use percentage of those figures is actually deductible.

Lodging, Meals, and Other Trip Costs

When a temporary assignment requires you to stay overnight away from your tax home, the deduction goes well past mileage. Lodging is fully deductible. Business meals are deductible at 50 percent of the unreimbursed cost.⁸ Costs must be reasonable for the circumstances; the IRS doesn’t set a dollar cap, but “lavish or extravagant” spending will be disallowed.

Self-employed workers using a vehicle partly for business can also deduct the business portion of car loan interest. Personal property taxes on the vehicle are deductible separately from the mileage calculation.

Records That Hold Up in an Audit

The IRS requires substantiation for every travel deduction covering four points: the amount, the time and place, the business purpose, and the business relationship of anyone you met with.¹¹ For mileage that means logging the date, destination, purpose, and odometer readings at the start and end of each trip.

Recording these at or near the time of travel is far more credible than reconstructing them later. The statute doesn’t literally require a contemporaneous log, but examiners treat real-time records as far more reliable than after-the-fact ones. GPS-based mileage apps handle the tracking automatically and satisfy the standard with little effort.

Receipts are required for all lodging and for any other business expense of $75 or more. Transportation receipts aren’t required if they aren’t readily available, but keeping them when you can strengthens your file.¹¹ If your records fall short in an audit and you can’t substantiate what you claimed, the IRS can impose a 20 percent accuracy-related penalty on the underpayment.¹²

1
Internal Revenue Service. Revenue Ruling 99-7
2
Internal Revenue Service. Chief Counsel Advice 200027047
3
Internal Revenue Service. Instructions for Schedule C (Form 1040)
4
Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
5
Internal Revenue Service. Instructions for Form 2106
6
Internal Revenue Service. Publication 3, Armed Forces’ Tax Guide
7
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
8
Internal Revenue Service. Topic No. 511, Business Travel Expenses
9
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents
10
Internal Revenue Service. Revenue Procedure 2026-15
11
Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses
12
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments