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Previously we discussed what didn’t qualify as a deduction for business travel – but now we will discuss what you can use for business travel expense deductions. I bet a few will surprise you. So whether you are trying to make the most of a business trip or looking for a new job away from home, understanding what you can deduct at tax time will save you some coins along the way.
If your duties require you from the general area of your tax home for a period substantially longer than an ordinary day’s work, and you need to get sleep or rest to meet the demands of your work while away – you are traveling away from business.
Situations that can be Business Travel Expense Deductions
There are three main cases that business travel expense deductions apply:
- Travel expenses paid or accumulated during a temporary work assignment away from home. You are allowed to deduct expenses, as long as the assignment less than a year. After one you’re the work assignment is considered indefinite and expenses will not count as business travel expense deductions. If it is realistically expected to work at a temporary location less than a year, and the situation changes to longer than a year the expenses are no longer deductible.
- If you are looking for a new job in the same trade or business you can deduct travel expenses, meals and lodging. However if there is a long stretch in your job history or looking in a new trade or for a new business, these are not considered business travel expenses deductions and rest on the individual.
- Not a lot of people know this – travel expenses for conventions are considered business travel expenses deductions if you can show that your attendance benefits your trade or business. There are special terms and conditions for convention travel outside of North America.
Business travel expense deductions include but are not limited to the cost of:
- Traveling by airplane, bus, train and car between your home and business destination are covered. However, if you were provided a free ticket because of frequent flier miles or a similar program, your cost is zero.
- If you are using your car while at your business destination your expenses are business travel expense deductions. You can either deduct actual expenses or the standard mileage rate. This also applies for tolls and parking fees related to the business travel. If you rent a car, you are allowed to only deduct what you use for business.
- Fares for travel in taxi and other types of transportation to and from work locations are deductible. This includes travel between the airport or train station to your hotel, the hotel to the work or client location and from one work or client location to another.
- Meals and lodging are business travel expense deductions.
- Tips you pay for any of the above services.
- Dry cleaning and laundry are deductible.
- Business calls, faxes and other work-related communications.
- Shipping luggage or work related collateral is also deductible
For more information on how you can save with business travel expense deductions check out the IRS’s website. If you would like to know what else you could deduct, call the tax professionals at DeFreitas and Minsky LLP at (516) 746-6322 today!
