How to Claim Travel Expenses on Taxes

If you have to travel for business, the U.S. Internal Revenue Service allows you to deduct certain expenses in the interest of promoting business. As this is a common area of tax abuse, you must keep accurate records to substantiate your expenses, including receipts and written descriptions of the reason for the expense. Depending on whether you are an employee, business owner or independent contractor, you will use different forms to deduct your expenses before you transfer the amount to your IRS Form 1040.

Instructions

1

Record your travel expenses. Collect all of your travel receipts for use on your tax forms. This information will also help protect you in case of an audit.

2

Enter expenses on IRS Form 2106 if you are an employee. This form, "Employee Business Expenses," allows you to enter travel expenses you incur. Specific allowable expenses are vehicle expenses, parking fees, tolls, transportation, lodging, airplane, car rental, other expenses, meals and entertainment. Your meals and entertainment expense will be limited to 50 percent of the amount spent, and you will not receive credit for expenses reimbursed by your employer. You can also claim vehicle expenses when traveling if you used your own car. The IRS allows you to choose between either your actual vehicle expenses or a standard mileage deduction.

3

Transfer applicable amounts from Form 2106 to Schedule A. Follow the instructions on Form 2106. Transfer your allowable expenses to line 21 of your Schedule A, "Itemized Deductions." If your income is $166,800 or less, your itemized deductions are not limited. Transfer your total amount of itemized deductions, including your applicable unreimbursed travel expenses, to line 40a of your Form 1040. As your travel expenses are an itemized expense, you cannot claim them if you do not itemize deductions.

4

Enter your expenses on Schedule C if you are a business owner or independent contractor. Enter expenses for travel on line 24a, and enter meals and entertainment on line 24b. Subtract these expenses from your business income. Transfer your profit or loss to line 12 of your Form 1040.