What unreimbursed expenses are deductible when traveling for business, and how do I keep track of them?
We know that many of our clients, espcially those in the performing arts, travel for their business. The ordinary and necessary expenses of traveling away from home for your business, profession, or job can be deductible. These expenses can’t be lavish, extravagant, or for personal purposes. The travel must be outside of your tax home, or the entire city or general area where your main place of business or work is located. The travel period must be substantially longer than an ordinary day's work, requiring you to get sleep or rest to meet the demands the work while away.
Deductible travel expenses while away from home include the costs of:
• Travel by airplane, train, bus or car between your home and your out-of-town business destination where you are required to stay overnight.
• 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.
• 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.
Recordkeeping:
Well-organized records make it easier to prepare a tax return. Keep documents such as receipts, canceled checks, and other documents that support a deduction.We ask that clients keep a contemporaneous log of their mileage if they use their own car for business purposes.
A Note About Deductibility:
You'll recall that the Tax Cuts and Jobs Act eliminated the deduction of unremibursed business expenses related to W2 income on federal tax returns. Some states, however, still permit these deductions, and expense deductions pertaining to self-employment income are still allowed.
If you would like to discuss this further with a member of our Team, please schedule a consultation using this link: https://calendly.com/karasseipeltax