How to Avoid Taxes by Traveling
This Week's Quote:
If you want light to come into your life, you need to stand where it is shining.
-Guy Finley, Writer
This week’s tax tip is for all of our traveling business people and the deductions you can get for business trips. Ironically, this week’s tax tip is brought to you by the very same people who want you to pay your taxes, the IRS! The article includes the various deductions one can list on their taxes due to business including food, gas, transportation tickets, and most importantly, how to document all of that so it is easy to file your taxes when the time comes.
-Zak Kitzmiller
Here’s what taxpayers need to know about business related travel deductions
Business travel can be costly. Hotel bills, airfare or train tickets, cab fare, public transportation – it can all add up fast. The good news is business travelers may be able off-set some of those costs by claiming business travel deductions when they file their taxes.
Here are some details about these valuable deductions that all business travelers should know.
Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. The travel period must be substantially longer than an ordinary day's work and a need for sleep or rest to meet the demands of the work while away.
Travel expenses must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes.
Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year.
Travel expenses for conventions are deductible if attendance benefits the business and there are special rules for conventions held outside North America.
Deductible travel expenses while away from home include the costs of:
Travel by airplane, train, bus or car between your home and your business destination.
Fares for taxis or other types of transportation between an airport or train station to a hotel, from a hotel to a work location.
Shipping of baggage and sample or display material between regular and temporary work locations.
Using a personally owned car for business which can include an increase in mileage rates.
Lodging and non-entertainment-related meals.
Dry cleaning and laundry.
Business calls and communication.
Tips paid for services related to any of these expenses.
Other similar ordinary and necessary expenses related to the business travel.
Self-employed or farmers with travel deductions
Those who are self-employed can deduct travel expenses on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship).
Farmers can use Schedule F (Form 1040), Profit or Loss from Farming.
Travel deductions for the National Guard or military reserves
National Guard or military reserve service members can claim a deduction for unreimbursed travel expenses paid during the performance of their duty.
Recordkeeping
Well-organized records make it easier to prepare a tax return. Keep records, such as receipts, canceled checks, and other documents that support a deduction.
Credit given to: the Internal Revenue Service. Published July 12, 2022 on the IRS Website
Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We also welcome and appreciate anyone who wishes to write a Tax Tip of the Week for our consideration. We may be reached in our Dayton office at 937-436-3133 or in our Xenia office at 937-372-3504. Or, visit our website.
This Week’s Author, Zak Kitzmiller
