A Short Guide to Deducting Travel Expenses

A Short Guide to Deducting Travel Expenses

If you have to travel as part of being self-employed, you know traveling costs can add up fast. Fortunately, there are a few tax breaks available to offset those expenses.

Follow this short guide to learn how to lower your tax bill by deducting your business travel expenses.

Business mileage vs. business travel expenses

As a business owner, you are considered “traveling” for tax purposes when you are away from home long enough to require sleep – generally overnight. In that instance, not only can you deduct your mileage, but you can also deduct the cost of meals and lodging.

If you travel to see a customer or client during the day but return home in the evening, you can only deduct the miles you drove to the meeting.

Vehicle expense deduction

Being self-employed allows you to deduct vehicle expenses when you drive your personal car for business purposes. That includes instances like driving to see a customer, to a store to pick up supplies for your business, or to a conference in another state. And when it comes to deducting those travel expenses, you must choose to deduct either the standard mileage allowance or the actual cost of your gas, oil, and other expenses. The standard mileage allowance for 2019 is 58 cents per mile.

Whichever method you choose, you must maintain good records. For each trip, make sure to diligently record the date, the number of miles and the purpose of the trip. Remember to deduct the cost of parking and tolls. These costs are deductible in addition to other vehicle expenses or the standard mileage rate.

Travel expenses

Here’s a list of common self-employed travel expenses you can deduct:

  • Meals (50 percent deductible)
  • Lodging
  • Airfare, train, or bus fares
  • Taxis and limousines
  • The cost of transporting supplies, such as display materials
  • Dry cleaning and laundry while you travel
  • Business expenses while traveling, such as Internet and phone charges.