Taking a trip away from the office can be expensive. Whether you travel for work rarely or often, figuring out travel expense tax write-offs might seem confusing. The IRS has information to help all business travelers properly claim these valuable deductions.
Guidelines:
In order for you to count your trip as business travel, it has to be:
- Away from your “tax home” or place of work
Business travel deductions are available when you travel away from your tax home or main place of work for business reasons. Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located. The trip should require you to sleep somewhere that isn’t your home. - Normal work hours
You should be working your regular work hours. It’s okay to take personal time in the evenings and you can still take weekends off.
You can deduct all of your travel expenses if your trip was entirely business related. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct only your business-related travel expenses. These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. - An ordinary and necessary expense
Travel expenses need to be ordinary and necessary. They can't be lavish, extravagant or for personal purposes.
What are deductible travel expenses?
You don’t have to fly first class and stay at a five-star hotel to claim travel expense tax deductions. Here are some common travel-related write-offs you can take advantage of. - Transportation
All transportation costs are a travel tax deduction. This includes traveling by airplane, train, bus or car between your home and your business destination.
Fares for taxis, Uber rides or other types of transportation to and from your destination are also tax deductible. Additionally, you may be able to deduct mileage using the IRS-prescribed standard mileage rate if you drive your personal vehicle for business travel. - Baggage
Baggage fees are often overlooked and can be expensive. Good news! Baggage fees are deductible, so you no longer have to worry about squeezing all your items in your free carry-on. - Shipping
Work materials: You may be traveling to go to a trade show and need to display your products to potential buyers. You can get a tax deduction for the cost of shipping your work materials to your destination ahead of time.
Baggage: If you don’t want to mess with lugging around your baggage, consider shipping your work clothes. - Dry Cleaning and Laundry
Sometimes business trips last longer than you expect. Expenses for dry cleaning and laundry are tax-deductible, so you can always look your best! - Lodging
Hotels, motels, Airbnb stays, or even paying a friend for crashing on their couch, all of these are tax-deductible lodging expenses. - Meals
While traveling for work, you can deduct the cost of business-related food and beverages purchased from a restaurant. This includes the coffee you usually grab every morning or a quick lunch at the airport before you catch your flight! - Wi-Fi and communications
Many airlines don’t offer free Wi-Fi, but don’t worry, Wi-Fi on a plane is tax deductible when traveling for work! Wi-Fi at your hotel is also deductible along with other communication expenses like hotspots and international calls.
Where to claim travel expenses:
Self-employed business owners and farmers can deduct travel expenses against their business or farm income. Unfortunately, most employees can no longer deduct unreimbursed business-related expenses on their personal tax returns as the Miscellaneous Itemized Deduction category, where those expenses would be claimed, was eliminated under the Tax Cuts & Jobs Act in 2018.
To claim your travel expenses, visit the IRS website for your specific deductions. Be sure to consult your tax advisor for your specific situation.
Keeping track of expenses on your business trip makes it easier to prepare a tax return. View essential documents online 24/7 with Central Bank’s eStatements and eDocuments. Take advantage of this feature to eliminate paper clutter and keep all your documents in one convenient location.
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