The information in this article is up to date through tax year 2019 (taxes filed in 2020).
Being self-employed comes with many benefits, like making your own schedule. It also has disadvantages, like not having someone to reimburse you for travel expenses. Fortunately, self-employed taxpayers can deduct travel costs on their tax returns.
What travel expenses can I deduct?
If you are traveling for business and your trip requires that you spend at least one night away from home, you can deduct the cost of lodging and food, plus any ordinary and necessary expenses that you paid to get the job done. This includes airfare, car rentals, rideshares, and subway tickets. You can also deduct dry-cleaning costs and the cost of transporting things like marketing materials or large displays.
You can even deduct a portion of your phone bill and internet access charges that you receive on the road. All of these expenses can be deducted 100%. The only expenses that aren’t 100% deductible are meals, which are 50% deductible.
Track vehicle usage
If you use your own vehicle for business, some of the expenses spent on the car can be deducted. When it comes to deducting for mileage, there are two options. The first is to apply the standard mileage rate of 58 cents a mile for tax year 2019 (taxes filed in 2020) to all mileage accrued. The second is to list actual costs of gas, oil, insurance, maintenance of your vehicle, etc.
It’s important to be aware that only mileage accumulated specifically for work-related events qualifies. This is why it’s important to have detailed logs of these trips and expenses.
Deduct parking and tolls
Depending on your location, parking fees and toll roads may not be relevant. However, for those who do have to deal with them, they can add up quickly. When traveling for work, keep records of these and file them as travel expenses on your tax return.
Travel expenses you can’t deduct
As mentioned before, one of the advantages of being self-employed is having a flexible schedule. This means having the ability to turn a business trip into a mini-vacation easier than most.
Combining business and pleasure is certainly not forbidden but, if you’re planning to deduct the costs of a trip with both, make sure to keep detailed records to differentiate them. You must be able to prove why the trip was necessary for business and which expenses went towards that, and only that.
TaxSlayer can help
TaxSlayer makes the process of filing self-employed taxes a breeze. All you have to do is keep good records of your travels and visit TaxSlayer.com. We’ll do the rest!