Travel Expenses

Deductions on Business Travel Expenses

It is necessary to plan business trips in an effort to maximize your write-offs. Akin to other costs of doing business, you can claim deductions for any business travel expenditures you personally incur in servicing your customers.

As a self-employed business owner, you may claim deductions only for your traveling costs if the business travel expenses would be defined as ordinary in nature and requisite for servicing the customers. Business travel expenses you might typify extravagant, will not be eligible for the tax deduction. Although not an absolute guarantee, these subsequent types of travel expenses are generally deductible:

Transportation costs incurred in travelling from your home to the client site. Fuel and the various other auto expenses incurred in working at the client’s location. hotel and meal expenses. Dry cleaning and laundry costs incurred during business travel.

Additionally, you cannot incur tax deductible travel expenses for reasons which are personal, but instead you must incur them in providing your services to clients. There is no hard and fast rule of when a travel expense is related to business. However, because of this guideline, you are not able to claim deduction for the cost of your everyday trip between your home and the workplace. This is viewed as a personal expense.

Deductible travel expenses demand that you travel more than a few miles from your main business location to meet a client. This will generally mean you must leave the city where you usually conduct business or, for small towns, you will have to leave the general surrounding area. You must commute for such a length of time that you are away from your tax home for more than a normal day of work. Usually, this means that you’ve travelled for such a long period of time that you must rest or even stay through the night.

You are able to deduct for business travel expenses incurred while temporarily servicing clients away from your tax home. However, if you provide services at a client location for an indefinite period of time or for over a year, you can’t claim the deduction.Maintaining exact records is key. Establish this practice to ensure easier tax prep, and support all travel expense deductions you claim on your return.

More info on travel expense deductions can be found at www.irs.gov (Travel, Entertainment, Gift and Car Expenses).
Visit our ever-growing Tax Guide at Self Employed Tax Guide