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Are Travel Expenses Tax Deductible? The Answer Might Surprise You!



Are Travel Expenses Tax Deductible?

Are Travel Expenses Tax Deductible? The Answer Might Surprise You!

Do you really know how to file your taxes? The IRS tax code is full of complicated rules and regulations that can be hard to navigate, especially when it comes to deducting travel expenses. Are travel expenses tax deductible? You might think so, but there’s more to it than that! This article will help you understand whether your travel-related costs are deductible and if they aren’t, where else you can save some cash on your taxes.


How to Minimize Your Taxes When Traveling Abroad

Are Travel Expenses Tax Deductible?  When traveling abroad, one of the first things you might be asked to do is fill out a form that asks for your U.S. tax code information as well as your social security number.



Keep in mind though, not all countries require this information; contact your country’s customs or immigration offices to be sure. (Read Are travel agents worth it? Here’s how to find the best one for you in 5 easy steps!).



Another expense you may incur from traveling is food and beverage items-even in countries where tipping is not expected or customary, be prepared to tip 15% on the cost of all meals and beverages consumed while traveling outside the US.

Are Travel Expenses Tax Deductible?

Most importantly though, the key to minimizing taxes while abroad is filing your taxes on time (by April 15th) and properly. This means filing a U.S. federal income tax return, Form 1040, and making an accurate estimation of how much foreign earned income was received during the year.


Most people find it easiest to work with their home accountant or CPA who can prepare their return correctly. Foreign account statements are required by law to be filed with these types of returns as well.


If a person doesn’t want to deal with any paperwork at all then they should consider using an international credit card that has no foreign transaction fees or surcharges-although there are many drawbacks with these cards too such as annual fees, high-interest rates, strict limits on refunds and more so it’s always important to consider both sides before making any decisions.

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The Complete Guide to Travel Tax Deductions: 10 Rules That You Need To Know

Regardless of whether or not your travel expenses are deductible, there is one aspect that you should keep in mind: receipts. In order to get those deductions from a tax perspective, you must keep all of your receipts in an organized fashion, such as in a briefcase. Then, when it comes time to file your taxes for the year, be sure to attach them all for review by the IRS.


1) Are travel expenses tax deductible? Unless you’re among the rare individuals who do not pay income taxes in America and thus do not have any federal deductions, then yes.


2) Receipts are important. I cannot stress this enough: receipts are critical if you want to get those deductions from a tax perspective down the line.


For example, let’s say that you drive to New York City every week and spend $200 on gas each trip. At the end of the year, that adds up to $3200 – meaning at least a $1200 deduction (for 20%).


In addition, you also made hotel reservations for five nights at a hotel in New York during that time period, which cost $600 each night. (Read Who Invented Aircraft? The Incredible History of this Incredible Invention).

Are Travel Expenses Tax Deductible?

That adds up to another $3000 over five trips so another $1000 worth of deductions (for 33%). The rule here is simple: document everything with receipts and be thorough about how much money was spent on what (and why).


A little bit of attention goes a long way with these types of things! If you’d like to learn more about the types of travel expenses that might be considered deductible.



Best Ways to Keep Your Tax Bill Low on Your Next Vacation

Are Travel Expenses Tax Deductible? If you’re an American and your tax bracket is anything like mine, you might find that a little tax on your travel is worth it because of the way some places are willing to bend over backward for a tourist with money.


But when it comes to filing your taxes, are travel expenses tax deductible or not? It turns out that if you’re careful about how you fill out the form, the answer might be yes! There are four different deductions you can take advantage of and one of them has been updated in recent years:

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-Tossing out (or returning) most of what was purchased on your trip because there’s simply no need for it at home. This means that all those souvenirs picked up along the way get tossed or donated rather than bringing them back home. That $20 shirt you bought in Greece that will never actually see the light of day again, could count as $20 off your taxable income.


-Meals taken away from home while traveling, don’t count as being part of any per diem limits imposed by the IRS.


-Miscellaneous expenses incurred while traveling such as laundry service fees and long-distance phone calls made while abroad.


-Overnight accommodations are charged by a hotel/motel and reported separately from meal charges.


-The standard deduction. Rather than tallying up every item you purchase on your trip, the IRS offers a standard deduction to help simplify things. For 2017 this number is set at $6,350 for single filers or head-of-households who file their taxes as single.


-Deduction associated with moving expenses. If you use this method then half of your moving costs are deductible, but only if they were more than 100 miles away from your old residence and 50 miles away from the new one.


For example: Let’s say my parents live in Los Angeles but I’m going to school in New York City and have decided to rent an apartment there instead of living with them; any moving costs incurred between these two locations would be eligible for tax deductions under this provision.

Are Travel Expenses Tax Deductible?

Conclusion: Why You Should Keep Track of Your Travelling Expenses

It’s always smart to keep track of your traveling expenses. It might not seem like a lot at the time, but they can really add up. And if you’re using a vehicle for business purposes, then these expenses are tax deductible. Keep track of all of your travel-related expenses and write them down so that you can make sure to take them into account when you prepare your taxes.


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