Do you travel for business as a business owner or self-employed professional? We hope you are tracking your expenses!
First, you must be aware of your tax city, this is the primary area where you live and conduct business. If you have to travel outside of this general area for a business purpose, there are several eligible expenses that can be considered tax deductions. Don’t forget, the trip must be entirely intended for business to be eligible.
Keep these common deductions in mind when you travel for business next and remember to save your receipts! You can use tools like Adobe Scan to instantly digitize them for safe-keeping.
- Travel: This bucket can include any fees that you need to expense to get you to your destination and around your destination. For example, this can include an Uber to the airport, airfare, Ubers and taxis around town, a rental car in your destination city and your travel costs back home. There may be additional associated costs you can claim as well, like baggage fees.
- If you use your own car for travel, you can take the standard mileage deduction ($0.58 per mile) for any miles you incurred while performing business activities, including traveling to and from a destination, transporting materials, etc.
- Accommodations: Includes hotel or Airbnb costs while on business travel.
- Meals: Meals while traveling for business can be considered a deduction, but only for 50% of the cost.
- If you don’t want to keep your receipts, you can calculate your costs using a standard meal allowance, which varies by location.
- Dry cleaning and laundry: This is a plus-up you may not know about!
- Tech and equipment rental: If rentals are required for your business needs, like computers, cameras, etc. these are eligible to be deducted.
- Conventions: This expense is a bit of a grey area. The convention must clearly provide value to your trade or business. You can often prove this via the convention agenda that outlines session details. Just use your best judgment here and keep documentation. You can always consult an IOOGO Tax professional if you have questions.
Expenses that don’t count
Personal expenses while traveling don’t count as deductions. This could include personal hygiene products, medication, spa or gym fees and entertainment. Watch out for charges on your hotel bill that may be labeled as gym fees or even movie charges that could be considered personal bills.
If you bring a spouse or child along on a trip, their expenses will not be deductible unless they are considered an employee or if the trip was also considered a business trip for them.
It’s important to note that international travel rules are a bit different. You have to be outside of the U.S. for more than a week and less than 25% of the time had to be spent on personal activities.
Looking for more tax help? Check out IOOGO’s business services.