The IRS states that commuting to and from work is not deductible. So how do we make it deductible and stay within the IRS rules? That's the question Michael from Kentucky asks:

Q: I am a 1099 sub-contractor doing database consulting for a local spirits company. I have an LLC for my Computer Consulting business based in Shepherdsville, KY. I drive 30 miles one-way to the client in Louisville, KY four days a week. Are these miles deductible and if so, under which IRS tax code? P.S. Thanks for the great information at Rich Dad Annual Forum! It was great meeting you!

A: The way to increase deductions is to Learn the Rules. The question here is what's commuting? According to the IRS, commuting is traveling from your home to your first place of business for the day and then returning home from your last place of business for the day. In Michael's case, this means that if he travels directly to Louisville from home and then back, his entire trip is commuting and is nondeductible.

Instead of going directly to the client, what if Michael goes to his office in Shepherdsville, does some work, then goes on to the client in Louisville, returns to his office in Shepherdsville, and then returns home from there. This makes his trip to Louisville deductible. Only his trip to his Shepherdsville office is commuting.

What if his office in Shepherdsville is in his home? Then, his walk from his bedroom to his office is commuting and his trip from his office to Louisville is deductible. When he returns to his home office to do some work at the end of the day, his trip there from Louisville is also deductible. Of course, the real effect of this planning strategy is to make his entire trip to and from Louisville deductible. See what happens when you Learn the Rules?!!

For more on setting up your home office, see our home study product, Getting the Most of Your Home Office Deduction at http://www.wealthstrategyuproducts.com or even better, join our School of Tax Strategy at http://www.provisionwealth.com/products.

Remember that the more expenses you make deductible, the lower your tax and the faster you reach your financial freedom.

Warmest regards,

Tom