How To Claim Travel Expenses On Your Taxes

Learn how to claim travel expenses on your taxes by using form 2106 or 2106-EZ, schedule A and form 1040. Travel expenses are deductible using these tax forms and the IRS ask you to see publication 463 to have travel expenses explained fully. There are travel expenses for business, profession or job.  In order to claim the legitimate amount allowed for travel expenses on your taxes, read this entire article three times.

  1. What are Travel Expenses? According to the IRS,"Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Generally, employees deduct these expenses using 2106 or form 2106-EZ and on 1040 and schedule A. You cannot deduct expenses that are lavish or extravagant or that are for personal purposes." In order to claim travel expenses, you must be leaving your tax home for more than a few days and travel expenses will compensate you for that ordinary and necessary expense.
  2. What Expenses are Deductible on Form 2106? The costs that you can claim on your tax forms are: costs of travel (air, car, train, bus, taxi) between your tax home and your business. Other expenses that may be allowed are lodging, meals, cab fare, car rentals, tips, dry cleaning, business calls, computer rentals, etc.
  3. What is Your Tax Home? Your tax home may be an entire city, not your actual residential address. Your tax home is the city in which you work.  Should you live in one city and work in another, travel back and forth to your home is not deductible and not considered a business travel. Business travel is defined as being away from your tax home for more than one day.
  4. Personal or Business.  Audit red flags are seen when the taxpayer is trying to deduct business travel expenses, such as room and airfare when the purpose of the trip is 75 percent personal. The IRS will look at the time spent on travel and the time spent at Disneyland.
  5. Travel Expenses or Standard Mileage? The IRS allows standard deductions for meals and gas mileage opposed to actual cost. Sometimes taking the standard deduction is more beneficial. This will make it easier to claim travel expenses on your taxes opposed to adding up fifty sales receipts. Have your tax preparer check both.
  6. Total of Cost Involved.  After completing form 2106 or 2106-EZ you simply place that figure on line 21 of form 1040 to claim travel expenses on taxes.  If the amount of your travel expenses exceed two percent of your income, you may claim travel expenses. You may also place these expenses on schedule C if these are business expenses. Travel expenses for spouse and family can only be deductible if they accompany  you and their presence has to do with business, not personal.
  7. Record Keeping is Essential.  In order to claim travel expenses on your taxes, you must have everything documented. Some expenses may be paid directly by your employer and the rest may be claimed on your taxes. There are red flags on all types of returns and high expenses will cause those red flags to appear. Using an online tax preparation service will help to point out any abnormal expense which needs to be adjusted. In the end, getting your employer to reimburse your full expenses will be more beneficial and easier.  Learning how to claim travel expenses on your taxes is very easy with the right forms and instructions from the IRS.


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