Feel like you’re paying too much for your business travels? Maybe there are some taxes you didn’t know you can deduct…
Here are the top tax deductions for travel expenses you can claim right now.
Attention: Personal trips are not included, so don’t add expenses related to this when claiming your tax deductions.
Tax deductions for travel expenses you should claim
Travel expenses add up faster than you might think. The good news is, you can claim for tax deductions for any work related travel expenses and other cost incurred in running your business.
When travelling for work purposes or sending an employee on a work trip, it is important to record all your business transactions. Keep detailed notes on everything you buy during the entire trip. This will ensure a smooth and easy tax claim. Plus this can even help you avoid potential disputes with the Tax Office.
Here are the expenses that you can apply for a tax rebate (provided that you keep an accurate documentation):
- Public transport costs – These are expenses incurred for fares like airfares, bus, train and taxi. Note: The cost of travelling from home to work is not a tax deductible expense.
- Food – The amount you can claim varies. This basically depends on your income and which country you are travelling to. Provided that your meal is directly related to conduct a business and not just socialising, you can claim up to 50% of the cost.
- Accommodation – If you have to stay overnight, you are eligible to claim tax relief on your hotel stay. Hotel costs are pretty unpredictable and the only way to prove what you shelled out is by keeping all accommodation receipts so you can back up your claims with a concrete evidence.
Some important details…
To get a tax deduction for travel expenses, your travel diary should include the following:
- Date and time of the meeting or activity
- Duration of the meeting or activity
- Detailed information about the activity and the type of business deal you had with your client
- Where the business meeting was held
In a nutshell, the key to getting the claim is by keeping a solid record of your activities to avoid receiving a penalty whenever the ATO disputes a claim. So you are going to need a travel diary handy and write down everything you do. Keep all the receipts and get all the documentation you can to confirm that your travel was specifically work related.
If you are not sure about the documents you need to keep, or if you still have questions about tax deductions for business travels, get in touch with one of our tax experts now.