Americans didn’t travel nearly as much in 2020 as they might in a given year thanks to the ongoing COVID-19 pandemic. However, there are still plenty of Americans who had to travel for business purposes, and as such may qualify for some travel deductions on their 2020 taxes.
There are some very specific rules associated with business travel tax deductions in Union City, NJ that got changed with the implementation of the Tax Cuts and Jobs Act of 2017, so be sure to speak to your tax preparation professional about your circumstances to see whether any of these deductions apply to you. But in general, you are allowed to deduct travel expenses paid or incurred in connection with temporary work assignments that take you away from home, so long as those assignments are not indefinite (which, for the IRS’s purposes, is considered longer than a year).
In addition, you are not allowed to deduct travel expenses at a work location if you have any reason to believe you will be there for more than a year, regardless of whether you work there that long.
Some examples of deductible travel expenses while you’re away from home include the following:
- Travel expenses for conventions, if you’re able to show your attendance at the convention is beneficial for your business or trade.
- Taxis and other types of transportation between an airport or train station and hotel, or between a hotel and your business meeting place or temporary work location.
- Costs associated with travel by bus, car, airplane or train between your home and the business destination.
- Shipping costs for any baggage, prototypes, sample material or other work items needed, between your regular and temporary work locations.
- Certain meals (the rules for business meals changed with the Tax Cuts and Jobs Act of 2017, so be sure you go through those stipulations carefully).
- Dry cleaning and laundry expenses for business clothing.
- The use of your car while at your business destination, including standard mileage expenses, tolls and parking fees.
- The business use portion for the expenses of a rental car.
- Tips paid for certain services related to any of the above expenses.
- Business calls you place while on your business trip, or any business communications with any type of communication device.
- Other types of necessary expenses associated with your business travel.
If you’re self-employed, some of the methods you use for deducting your expenses may differ from those used by people who are employees of other companies. In addition, there are some extra deduction possibilities for which you may qualify if you are a member of the national guard or another branch of the military.
It’s important that you keep all receipts associated with these travel expenses and maintain good records so you can prove your qualification for these deductions. And again, always be sure to talk to an accountant in Union City, NJ for insight and information about your qualification, as tax rules are constantly changing. Contact Kedean’s Generation today for more information about taxes and traveling.
Categorised in: Tax Preparation