As you get ready to file your taxes this year, don’t forget about the many business travel tax credits that you may be entitled to. If you travel regularly for work, chances are you have racked up a wide range of expenses that will benefit you on your federal taxes. Just be careful not to overstep the line – frequent business travelers are one of the groups that are prone to getting audited.
(Please bear in mind that we are not accountants and the information provided here should not be taken as tax or legal advice. Consult your accountant to make sure you’re filing your taxes correctly.)
Tax credits for business travel include any travel expenses directly related to your work that haven’t been covered by your company. For example, if you buy yourself lunch while attending a conference and your company doesn’t reimburse you, that’s a business travel expense that can be deducted on your taxes. You can deduct such expenses if they total more than 2% of your gross income. If you’re a small business owner or self-employed, you don’t need to meet the 2% threshold.
But be careful. Any expenses relating to your trip are potentially fair game. They could include plane tickets, gasoline, hotel rooms, taxis, supplies, and expedited visa service fees (wink wink). But if you try to deduct an expense that doesn’t directly relate to your work, the IRS might pounce on you.
Take that lunch at the conference, for example. If you ate at the conference center cafeteria, that’s almost certainly safe to deduct. But if you treated yourself to a fancy lunch at a four-star restaurant with a $200 bottle of wine after the conference ended, that’s probably not kosher. But but, if you took a potential client along with you to that lunch, you’re probably safe again.
Just because you do something while on a business trip doesn’t make that expense automatically business related. Some big no-nos include trying to deduct vacation activities that you roll into your business trip, gifts for friends or family members, and personal souvenirs. The biggest no-no, though, is trying to deduct an expense that you were reimbursed for by your company. That’s called fraud, people.
There is a grey line when it comes to business trip expenses, and that line can get pretty fuzzy. If you’re not sure if you’ve crossed the line, talk to an accountant to be on the safe side.
