Business Travel Expenses and Tax Deductions

Business Travel Expenses and Tax Deductions
  • Opening Intro -

    Small business operators have a number of tax deductions available to them including deductions for business trips.

    About such deductions the IRS states, "Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job."

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Thus, some of the expenses can be recouped when you file your taxes.

On the Road

You can being taking deductions once you travel away from your home and general area. That general area includes where your business or work is located, thus work performed outside of that area may allow you to deduct related expenses provided that it also takes place beyond your normal working hours.

One example that applies is as follows: you are a photographer based in Charleston, SC, and you have must travel to Columbia to take pictures of the state capitol building and other nearby architecture. You’ll be spending the better part of the day there, getting both lunch and dinner while on the road. Your meals as well as your mileage expenses are deductible. If you must stay overnight, your hotel stay is deductible too.

Business Trips

Beyond the short-haul and brief trips, business travel expenses can be deducted if your travel takes you away for a few days. However, if you are reassigned to a new office or if your travel is indefinite, then your expenses are not deductible.

For instance, if you work in downtown Raleigh, and your office relocates to Burlington, NC, your expenses are not deductible. If you choose to move to Burlington to be closer to your job, then your moving expenses would be covered as it meets the distance test: the move is at least 50 miles (57.9 miles separate Raleigh and Burlington). See IRS Topic 455 — Moving Expenses — for more information.

Looking for Work

Your job-hunting efforts may be tax deductible too. Both your food and lodging expenses are deductible provided that the new job is in your “present trade or business.”

This deduction might apply if you live in Richmond, Va., and are a reporter. Your travel takes you to New York where you interview with a web content company to contribute news stories. However, if your travel took you to New York to seek work as a theater manager, then those expenses would not be deductible.

Specific Deductions

The IRS allows tax filers to claim a variety of travel expenses including travel by airplane, train, bus or car between your home and your business destination. If you use your car while at the business destination, then mileage costs, parking fees, and tools are deductible.

Fares for buses or car service while away may be deductible as are meals, lodging, and related tips. Other deductions include business phone calls, dry cleaning, laundry, ordinary expenses, and the shipping of baggage between your regular and temporary locations.

See AlsoCommon Tax Deductions for the Self Employed

 

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Categories: Tax Tips

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".