Travel Expense Deductions

 

It’s imperative for you to plan business trips so that you can gain the maximum deduction. Similar to other costs of doing business, you are able to claim deductions for some business travel costs that you personally incur in order to service clients.

Expenditure that might be considered lavish do not be approved for deduction. You can only deduct business travel expenses if the costs are ordinary in nature and necessary for servicing the customer. Consider the following types of travel expenses are usually deductible:

• Transportation costs incurred while travelling from your personal home to the client site.
• Dry cleaning and laundry expenses occurred during business travel.
• Fuel and other automotive costs you pay while working at the client’s location.
• Meals and hotel costs.

Note also, you cannot incur tax deductible travel expenses for reasons which are personal, but instead you must incur these travel expenses in the process of imparting your services to clients. There isn’t a hard and fast rule on when a travel costs are related to business. And now, as a result of this particular rule, you cannot claim deductions for the expense of your everyday commute between your personal home and the place of work. This is thought of as a personal expense.

You will have to travel a considerable distance to claim a deduction for your travel expenses. During the trip, you have to depart your main worksite. And, you need to travel more than a short distance from your office building to meet with a client. This most often means that you have to travel outside the city where your office is or, for smaller towns, the general greater area. You must also travel for such a amount of time that you’re away from your tax home for longer than an ordinary work day. In general, this will mean that you’ve travelled far enough that you’ll have to pause for a rest or possibly stay overnight.

Do keep in mind, you can’t stay away from your tax home for too long a period, or you might lose the business travel deductions. You can write-off travel expenses while temporarily working away from your tax home. But, when you provide services at a client site for an undetermined period of time, you possibly might not be permitted to claim a travel expenses business deduction. This normally means that you may stay at a customer site and claim business travel expense tax deductions for no more than twelve months. When you can realistically anticipate you will work there for for a period over a year, however, you may no longer claim tax deductions for future expenses of travelling to that worksite.Finally, successfully claiming the travel expense deduction requires recordkeeping. To verify your deduction, you should keep all relevant receipts. And it is helpful to use a log, notebook, or other type of written record to track your expenses.

Additional info on travel expenses and deductions are at www.irs.gov (Travel, Entertainment, Gift and Car Expenses).