For most of us the cost of commuting between home and work isn't a deductible expense. But some lucky folks are indeed able to do this. If you're self-employed with a home office, then you just might be able to write off the cost of traveling between your residence and any other location where you conducted work-related business last year.
To take advantage of this tax break on your 2012 return, you must have a home office that qualifies for write-offs because it was your "principal place of business." This means that your home office was used regularly and exclusively as the scene for most of your income-earning activities last year. Alternatively, it would also qualify as your principal place of business if it was used regularly and exclusively for management and administrative functions provided you didn't make substantial use of any other fixed location for such activities last year. (Administrative and management activities are things like preparing client proposals and invoices, strategic planning, market research, keeping up with professional literature and so forth.)
For example, say your home office was used regularly and exclusively for administrative and management functions mainly during evening hours. During the day, you also had a "regular office" downtown, which you used for client meetings and as your base for daily operations (but, again, not for administrative chores). Because your home office qualifies as your principal place of business, you can deduct all the costs of commuting between there and your downtown office.
Regardless of whether you had another permanent office location (like the downtown office in our example), you can also always deduct the cost of commuting between your home office and any temporary work locations. These temporary work locations can include the office-supply store, the bank where you keep your business accounts, client sites and so on.
If you commuted between your home office and work locations by car, you can write off the actual expenses (including depreciation) or claim the standard business mileage allowance (55.5 cents per mile for 2012). And if you commuted by cab or public transportation, those costs are deductible, too.
Your commuting-expense deductions belong on Schedule C (if you're a sole proprietor or single-member LLC owner) or on Schedule E (if you're a partner or member of a multimember LLC). And keep in mind, write-offs claimed on those business tax schedules are double tax savers, because they reduce both your income and self-employment tax bills. Gotta love that.