Travel Expense Deductions 101

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Business travel, according to the IRS, is defined as travel away from your tax home that is “considerably longer than an ordinary day’s work” and necessitates rest or sleep away from home.

You must have slept away from home and your travel must be temporary in order to deduct these expenses (less than a year).

What Expenses Are Deductible While Traveling for Business?

You can deduct the cost of travel by train, bus, or air travel if you are self-employed and travelling between your tax home and your business destination.

Other business travel expenses that can be deducted include:

  • Taxi, commuter bus, airport limousine: You can deduct the cost of travel between the airport and a hotel or to a business location from your taxes.
  • Meals and lodging: The cost of meals and lodging while on business away from home can be submitted as an actual expense or as per diem rates determined by the IRS.
  • Cars and Trucks: The IRS provides a standard mileage allowance for cars and trucks. You can deduct the cost of maintenance, operating, tolls, and parking expenses from your taxes if you use your car or truck for business travel within this allowance.
  • Shipping and baggage: You can deduct the costs of shipping luggage or business materials between your regular work location and your tax home or temporary business location.

How Do You Document Travel Expenses?

Keep all of your receipts! It is the most crucial aspect of deducting travel expenses. 

You don’t need paper copies, but you should have more than just a credit card line item to show.

Your receipts should be as specific as possible and include the following information:

  • Date
  • Expense details
  • Amount spent
  • Business purpose

In this article, you will also learn about:

Can You Write off Flights for Work?

Can You Write off Tolls for Work on Taxes?

Can You Write off Mileage?

Can You Write off Hotel Expenses for Work?

Can You Write off Flights for Work?

According to the IRS, air travel between your home and your business destination can be deducted as business travel. 

If you were given an airline ticket or are riding for free as part of a frequent flyer or similar programme, your cost is zero and you have nothing to deduct.

Can You Write off Tolls for Work on Taxes?

If you pay a toll while travelling away from your tax home for a business-related reason, you can deduct the cost of the toll. This expense should not be associated with your regular commute to and from work. 

You can either deduct your actual expenses for driving for business or use the IRS’s standard mileage rate, which was 54.5 cents per business mile for the tax year 2018 and 53.5 cents per business mile for the tax year 2017.

Can You Write off Mileage?

You can deduct mileage if you drive for business, medical reasons, or to support a charitable organisation.

The standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be as follows as of January 1, 2020:

  • 57.5 cents per mile for business miles driven
  • 17 cents per mile driven for medical purposes
  • 14 cents per mile driven in service of charitable organizations

The standard business mileage rate depends on an annual study of the fixed and variable costs of driving a vehicle, whereas the rate for medical purposes is calculated with variable costs in mind.

Only if you use your personal vehicle for business, medical, or charitable purposes can you claim the deduction. You cannot claim business mileage if you drive a vehicle that was purchased by a company.

Can You Write off Hotel Expenses for Work?

The IRS requires that you travel away from your “tax home” – the location where you do the majority of your work – in order to claim your hotel stay as a tax deduction.

Self-employed people use Form 104 to deduct these costs from their Schedule C self-employment tax. Because they do not have an employer to reimburse their expenses, they frequently have higher travel deductions.

Make a point of keeping your receipts. Get a receipt from the hotel front desk, and keep any documentation you have that explains why your trip is important for business.

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