Claiming Work-Related Travel Expenses On Your Tax Return

If you travel as part of your job, you may be able to claim tax relief on expenses such as food, accommodation, and travel. However, there are some restrictions on what you can claim. For example, you can't claim for travel to and from your everyday place of work, or for running personal errands. You also can't claim expenses that have been reimbursed by your employer. To claim tax relief, you'll need to provide records of your expenses, such as receipts or a travel diary.

What counts as a work-related travel expense

When it comes to claiming travel expenses for work on your tax return, it's important to understand what counts as a work-related travel expense. Here's a detailed and direct guide to help you navigate this topic:

Transport Costs:

Work-related travel expenses typically include transport costs such as flights, public transport (e.g. bus, train), taxis, rideshares, and even parking fees. If you're driving your own vehicle for work purposes, you can usually claim fuel expenses and other driving costs. However, it's important to note that you cannot claim travel expenses for your daily commute between home and your regular workplace.

Accommodation and Meals:

If your work requires an overnight stay, you can generally claim expenses for accommodation (e.g. hotel, motel) and meals. This often includes incidental expenses, such as laundry services. Remember to keep receipts for these expenses, as they may be required for tax purposes.

Business-Related Expenses:

Work-related travel expenses also encompass various business-related costs. For example, you can claim expenses for business phone calls, printing costs, and business meals (usually limited to 50% of the cost). Additionally, if you need to ship baggage or display materials for work, these costs are typically deductible.

Temporary Work Assignments:

If you have a temporary work assignment away from your regular workplace, you can usually deduct travel expenses. However, indefinite work assignments or assignments exceeding one year are generally not considered deductible.

Conventions and Conferences:

Travel expenses for attending conventions or conferences are typically deductible if you can demonstrate that your attendance benefits your profession or business. Just make sure to keep a record of your expenses and activities during these work-related trips.

Multiple Work Locations:

If you work for the same employer at multiple locations, you can usually claim the cost of travelling between these different work sites. This also applies if you work from home for part of the day and then travel to your workplace or an offsite meeting.

Travel Allowance:

If your employer provides a travel allowance, it is typically considered taxable income. However, if you spend this allowance on work-related travel, you can claim a tax deduction for those expenses. Just remember that you can only claim the amount you actually spent on work-related travel, not the entire allowance.

Remember, it's always a good idea to keep detailed records of your work-related travel expenses and retain all relevant receipts. This will help ensure that you can claim all the deductions you're entitled to when it's time to file your tax return.

Transport expenses

Transport costs are one of the most common travel tax deductions. Generally, you can claim work-related travel in your car or on public transport. However, there are some important restrictions to note. You cannot claim travel costs from your home to your everyday place of work and back again. This includes any errands you run on the way to or from work, such as picking up mail or a package.

• Travel between two separate workplaces or jobs
• Travel from your workplace to off-site meetings or events
• Travel from your home to an alternative workplace if required
• Travel costs between locations if you work at more than one location for the same employer
• Work-related parking expenses, such as parking to attend an out-of-office company meeting or event
• Fares for taxis or other types of transportation between the airport or train station and your hotel, or between the hotel and your work location
• Shipping costs for baggage and sample or display materials between your regular and temporary work locations
• Using your car while at your business destination, including actual expenses or the standard mileage rate, as well as business-related tolls and parking fees
• Rental car expenses, but only the business-use portion is deductible

It is important to note that you cannot claim any car or parking expenses if you were reimbursed by your employer. Additionally, commuting to and from the office is generally not considered a deductible transportation expense.

Overnight expenses

If your work requires you to travel and stay overnight, you may be able to claim tax relief on the money spent on food and accommodation. However, you cannot claim tax relief for travelling to and from your everyday place of work and back again, unless you are travelling to a temporary workplace.

For example, if you live in Chicago but work in Milwaukee, where you stay in a hotel and eat in restaurants, you may not deduct any travel, meals or lodging in Milwaukee because that is your tax home. However, if you travel to a temporary workplace, you can claim a deduction for any meals, accommodation or incidental expenses incurred.

If you are required to travel away from home for work purposes, you can claim a deduction for any meals, accommodation or incidental expenses, as long as you have not been reimbursed by your employer. You will need to keep receipts for hotel and meal expenses, including the date of your stay or meal, and the name of the hotel or restaurant.

Some employers will pay an allowance to cover these costs, and while these allowances are taxable, a deduction can then be claimed for costs incurred. Each year, tax authorities publish lists of reasonable amounts to spend on meals, accommodation and incidentals incurred on overnight trips. If you receive an allowance and claim less than the amounts specified, you do not need to keep detailed records. However, if you spend more than the specified amounts, or do not receive an allowance, you must keep detailed records.

Even if you are not obliged to keep detailed records, you still need to be able to prove that you incurred the expense. This could include keeping credit card statements or proving that you were in a particular place at a particular time.

Record-keeping

Keeping good records of your travel expenses is essential when it comes to claiming them on your tax return. Here are some detailed instructions and tips for record-keeping:

Receipts and Written Evidence:

Keep all your receipts for travel expenses, including transportation, accommodation, meals, and any other relevant costs. A receipt or written evidence of your expense should include the following information:

• Name of the supplier or vendor
• Amount of the expense, in the currency incurred
• Nature or description of the goods or services
• Date of the expense (or use a bank/credit card statement if not available)
• Date the receipt was created
• If the expense was incurred outside your home country, the document can be in the local language

Travel Diary:

A travel diary is essential for recording your daily activities during work-related trips. It helps separate work-related expenses from private or leisure activities. You should record the date, start and end times, locations, and nature of each work-related activity. A travel diary is typically required if you are away from home for more than 6 consecutive nights. However, even for shorter trips, keeping a travel diary can be helpful for your own records.

Record Retention:

It is important to retain your travel records and receipts for a specified period. For example, in Australia, travel records must be kept for 5 years from the date of lodging your tax return.

Electronic Records:

You can keep electronic or digital copies of your receipts and records as long as they are clear and accurate representations of the original documents. Always make backup copies of your electronic files to prevent data loss.

Other Forms of Proof:

In addition to receipts and a travel diary, you may need other forms of proof, such as tax invoices, contracts, or financial reports, depending on the specific requirements of your tax jurisdiction.

Remember, proper record-keeping is crucial when claiming travel expenses on your tax return. You can only claim expenses that you can prove, so ensure your record-keeping system is well-organised and comprehensive.

Travel allowances

A travel allowance from your employer is usually considered taxable income and will be listed on your income statement. The good news is that, as long as you spent the money you were paid as a travel allowance, you can claim it as a tax deduction. However, you can only claim the total amount you spent on work-related travel. For example, if you received $1500 worth of travel allowances from your employer during the year, but your travel expenses only amounted to $1,000, you can only claim $1,000 worth of travel deductions on your return.

It is important to note that you can only claim travel deductions for which you have evidence, as the tax office may ask for proof of your expenses. Therefore, it is recommended that you keep all travel expense records and receipts, even if you receive an allowance.

If you are away from home for more than six consecutive nights, you should keep a travel diary to record where you were, what you were doing, and the start and end times of your activities. This will help you to track and recall incidental expenses like road tolls and meals.

Frequently asked questions