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Knowing what you can deduct from your taxes as travel expenses can help you spend smarter.
When you need to travel for business, it can be difficult to determine which expenses you can claim on your taxes. It’s important to do your research by checking out the official IRS website for rules and guidelines, but you can seek out a professional if you’re still unsure.
What counts as business travel?
Travel expenses are the costs incurred while traveling away from home for your business, profession, or job. For some people, what counts as business travel could be difficult to determine. The city or general area of your place of work is considered your tax home, which is typically used to determine what constitutes business travel. If there are multiple business hubs, the main hub needs to be determined for claiming travel expenses. For those who work away from home at a primary business hub and return to their private residence on weekends, travel expenses cannot be claimed because they are traveling into the business tax home, and traveling home afterward is travel for personal reasons.
What can I claim as travel expenses?
When traveling for business, not everything can be claimed as travel expenses. Knowing what you can claim before you go can actually help you save money and be smarter about where to spend. If travel is for a convention, it needs to be shown that your attendance at said convention is beneficial for your business, but conventions outside of North America are subject to special rules. Expenses you can claim include:
- The cost of a ticket for an airplane, train, bus, or car that is taking you to the business destination.
- Baggage costs are also able to be claimed.
- Taxi fare or transportation fees for going from the airport to your hotel, and getting from your hotel to your work area.
- If you have driven your own vehicle, you can claim the actual expenses or the standard mileage rate, as well as business-related tolls and parking fees.
- If you choose to get a rental car, you can only claim the business-use portion for the expenses.
- Lodging and meals can be claimed, but entertainment meals are not covered.*
- Laundry and dry cleaning expenses.
- Tips paid for any deductible expenses.
- Business calls that incur fees.
- There are many other miscellaneous expenses that can be claimed so long as they are business-related.
*For meal deductions, you can skip hoarding the receipts and use a standard meal allowance that is determined by the area of travel.
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