If you are planning on taking a business trip this year, then you should understand what sort of things you can write off. In many cases, most of your expense are tax-deductible, though to be certain you have a complete list of what expenses can be written off, it is best to seek the counsel of a tax professional. However, this will at the very least give you an idea of what sort of things you can deduct on next year’s tax return or deduct this year if you went on a business trip in 2017.
What Can I Deduct?
The IRS has particular definitions and rules regarding what classifies as a business trip, and as such, what qualifies as tax-deductible. According to the IRS website, here are some of the circumstance that would prevent you from deducting business travel expenses.
- Travel expenses paid in connection with a work assignment defined as “indefinite,” which is a work assignment that lasts for more than one year.
- Travel expenses in relation to a work location that you expect to work at for more than one year, even if you end up not working there for a year.
- Deducting expenses travel expenses, meals, and lodging while looking for a job in a new field or industry or looking for work for the first time.
- If you work in LA but live in San Diego, you can’t deduct expense accrued traveling to LA because this is considered your “tax home,” nor can you deduct expenses commuting home because it is not work-related.
If you are traveling for business, and have confirmed that it meets the IRS requirements, then you can deduct certain travel expenses. Moreover, if it is for a convention, you can also deduct these expenses as long as you can prove that your attendance benefits your trade or industry. Here are some of the business travel expenses you can write off according to the IRS:
- Travel by airplane, train, bus, or car from your home to business location. If you are provided a ticket or you are riding free because you are a frequent traveler than the expense would be zero)
- Taxi fare or other transportation costs “between the airport or train station and your hotel, the hotel and the work location, and from one customer to another, or from one place of business to another.”
- Shipping of baggage
- Expenses related to the use of your car, or any business-related expenses accrued during the use of a rental.
- Meals, tips for services related to any business-related expenses, dry cleaning, laundry, and lodging.
- Business calls including fax machine or through another communication device
- Other necessary expense related to your business travel. Consult a tax professional to learn more.
It is always good practice to keep your receipts and record all of your expenses. Keep in mind that if for some reason you forget to keep track of your meals, the IRS generally allows a standard meal allowance which varies depending on where you traveled. Also, if you are attending a convention outside of the United States, then special rules apply. If your company reimburses you for the trip, then you cannot take the tax deduction. And finally, don’t take a trip that you don’t intend to make. “Tax deduction is not a dollar-for-dollar reduction in the amount of your tax liability” according to the article “11 Tax-Deductible Expenses During Business Trips.” The business trip should have value, and will ultimately benefit you in your professional career.