In certain cases you may deduct travel expenses for work-related travel from your federal taxable income. This deduction is available only if you itemize your deductions; you can’t take it together with the standard deduction. IRS rules on the deductibility of expenses are quite complex, however, and many work-related travel expenses are not deductible. Even if your expenses are otherwise deductible, you can’t deduct any expenses for which you were reimbursed.
Your Tax Home
Your tax home is the city or general area of your primary place of business, even if your personal residence is elsewhere. If you have a secondary job in another location, your primary place of business is still your tax home. Your tax home can be the place of your personal residence if you live in the same city where you work or if the nature of your job prevents you from being able to realistically assign any particular location to your job – a traveling musician, for example. You cannot take a tax deduction for commuting between your personal residence and your tax home.
Travel Within Your Tax Home
You may deduct expenses for travel between two or more workplaces within your tax home, regardless of whether you are working for the same employer. You may also deduct expenses for visiting local clients, for traveling between your residence and a local temporary workplace assigned by your main employer, and for traveling from a home office to a secondary work location in the same trade or business. Unless you maintain a home office, you cannot deduct expenses for traveling between your residence and a second job.
You can deduct expenses when you travel between your tax home and other locations for business- or employment-related purposes. Such travel might include an overnight business trip, an out-of-town day trip to visit a client or travel to a second job in another city. You may deduct expenses for travel between your tax home and a temporary assignment; however, your assignment must be of a definite duration – a “temporary” assignment of indefinite duration is not considered temporary for tax purposes.
Subject to the given limitations, you may deduct expenses for airplane, train, bus or car travel when traveling between your tax home and a business destination. You may also deduct taxi, commuter bus and airport limousine expenses when traveling from the airport or station to your hotel and when traveling from your hotel to a work location. If you use your own car, you may deduct your driving expenses based on either the actual expense method or the standard mileage deduction. For 2012, the IRS standard mileage deduction was 55.5 cents per mile.
Paperwork and Filing
Keep careful records of your expenses, including receipts and invoices, in case of an IRS audit. If you are self-employed, you must usually complete Form 1040 and Schedule C. If you are a self-employed farmer, however, you must complete Form 1040 and Schedule F. If you are an employee, you must complete Form 1040 and Form 2106. If you are both employed and self-employed, you must file Form 1040, Form 2106, and either Schedule C or Schedule F.
David Carnes has been a full-time writer since 1998 and has published two full-length novels. He spends much of his time in various Asian countries and is fluent in Mandarin Chinese. He earned a Juris Doctorate from the University of Kentucky College of Law.