If you use public transportation, you'll not only save the fuel and operating expenses of a vehicle, but you may be eligible to claim a deduction on your tax return. Although all public-transportation costs do not qualify as deductions, many do. The IRS allows public-transportation deductions for numerous reasons, including employee commuting, business traveling and medical needs.
Mass Transit Fares
The IRS offers two ways of claiming public-transportation deductions on your tax return – using a standard deduction, which is a fixed monthly amount regardless of actual expenses, or itemizing your deductions, which lists your actual transportation expenses.
- Standard deduction. If you do not own a vehicle, you can claim the standard monthly deduction of $189 on your federal tax return for public transportation costs. This applies to mass transit fares that include trains, buses, taxis and ferries. If you claim more than this amount, you must provide documentation to substantiate your qualifying business costs. If you don’t own a vehicle, you can take this deduction without having to substantiate the cost by itemizing the actual amount you spend.
- Itemized deductions. If you do own a vehicle, and you also use public transportation, you may be allowed to claim deductions for public transportation if you use it for health reasons for yourself and your family, or if you use it for the purpose of producing income. But if you do own a vehicle, you cannot claim the standard monthly allowance for public transportation unless that amount is lower than your actual costs. You must claim the lower of the standard deduction or the actual cost of your public transportation expenses.
How to Claim Deductions for Public Transportation on Your Tax Return
Itemize allowable public-transportation expenses on Schedule A, which you attach to Form 1040 (U.S. Individual Income Tax Return). You can download Schedule A from IRS.gov. For example, enter allowable costs for public transportation related to your medical expenses on Line 1 of Schedule A, and enter allowable costs for job travel expenses on Line 21.
For tax purposes, business travel does not include your commuting costs, such as transportation to and from your job. But if you have two jobs, the transportation costs to get you from your primary job to your second are deductible. The costs to get you from your home directly to your second job are not deductible. Regardless of the distance from your home and your primary job, you cannot deduct public transportation costs, including taking buses and subways, even if you work during your commute.
If you travel on business, you can claim some deductions for public transportation costs. Allowable deductions are detailed in IRS Publication 463 (Travel, Entertainment, Gift, and Car Expenses) For example, if your spouse accompanies you on a business trip, and your spouse is not your employee or an employee of the company for which you both work, you can claim your public transportation costs but not your spouse’s.
Note: If your employer reimburses you for transportation costs, you cannot additionally claim these costs on your tax return.
You can claim a deduction for the costs of public transportation that you use for medical care. IRS Publication 502 (Medical and Dental Expenses) defines allowable medical expenses, which include diagnoses and treatments for physical and mental disabilities or illnesses. You can also claim transportation costs for your travel to visit a mentally-ill dependent, if the visits are recommended by medical personnel as part of the patient’s treatment.
Note: You cannot claim deductions for costs of public transportation if your medical insurance provider reimburses you for these expenses.
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