Claiming Business-Related Travel Deductions

As anyone who has to travel for work knows, doing so can be expensive. The cost of hotels, airfare, rental cars, food, and ride share services can all quickly add up. The good news is that taxpayers who travel for business are often able to off-set some of those costs by claiming business travel deductions when they file their yearly income tax returns.

When Can I Claim a Business Travel Deduction?

Business travel deductions are available to employees who are required to travel from their main place of work for business reasons. To qualify, the travel period must:

• Be substantially longer than a typical day’s work; and
• Require a need for sleep or rest to meet work demands.

Travel expenses for conventions could also be deductible if attendance benefits the business. There are, however, special rules for conventions held outside of the U.S. Furthermore, only travel expenses deemed ordinary and necessary are deductible, so taxpayers cannot claim deductions for lavish or personal expenses.

What Expenses Qualify for the Deduction?

The most common deductible travel expenses include the cost of:

• Travel by airplane, train, bus, or car between a taxpayer’s home and the business destination;
• Fares for ride share services, taxis, and other types of transportation between the airport or train station to a hotel, or from a hotel to a work location;
• Shipping or transporting baggage, or sample or display materials;
• Using a personal vehicle for business;
• Lodging and non-entertainment-related meals;
• Laundry and dry cleaning services;
• Business calls; and
• Tips paid for services related to travel.

Fortunately, taxpayers who qualify for this deduction don’t always have to keep every record of their meal expenses (although doing so is strongly encouraged), but can use a standard meal allowance. The deduction for business meals is generally limited to half of the unreimbursed cost. To learn more about calculating and claiming the business travel deduction, reach out to our legal team today.

Other Taxpayers

Self-employed taxpayers can also claim a travel expense deduction by filling out Schedule C (Form 1040). Similarly, National Guard or military reserve service members can claim a deduction for travel expenses (unreimbursed) incurred during the performance of their duty. To qualify for the latter, the travel must have been overnight and more than 100 miles from the taxpayer’s home. Expenses must still be ordinary and necessary to be deductible.

Speak with an Experienced Tax Return Preparation Lawyer Today

Traveling for work can be expensive. Fortunately, taxpayers who can provide proof of those expenses can often deduct them when filing their yearly tax return. For help calculating and claiming the business travel expense deduction, feel free to reach out to dedicated Florida tax return preparation lawyer, CPA, and former FBI Special Agent Ronald Cutler, P.A. You can set up a complimentary, one-on-one consultation by calling our office at 386-490-9949 or by completing one of our online contact forms. We look forward to helping you with your tax-related questions and concerns.

Sources:

irs.gov/newsroom/heres-what-taxpayers-need-to-know-about-business-related-travel-deductions

irs.gov/publications/p463#en_US_2021_publink100033749