5 Ways to Save on travel expenses as a freelancer
It is rightly said, “Life begins at the end of your comfort zone”. As a freelancer, you are required to travel a lot. If you are a freelance photographer or an artist who needs to perform at various places, many of your earnings get spent away on Travel Expenses. In order to get relief from federal taxes, you can apply for a business travel tax deduction.
As a freelancer, you get the potential chance to explore the world and learn numerous new things. Whenever you get out of your comfort zone, you become capable in holding up your own liability, and you get to sparkle before the entire world.
When the time comes to take responsibility for your own work and income, the duty of filing up your own tax return also comes along. Since you are a freelancer and don’t have any manager above you who can withhold your taxes, you need to manage your taxes on your own. You are required to make estimated tax payments to the Internal Revenue System (IRS) and also take care of the due dates to avoid penalty charges and interest on them.
For self-employers, IRS has issued a system of quarterly tax payments. This means you need to divide your annual tax estimation into four parts and pay them four times in a year. While filing your yearly tax return, if you realize you have paid more in quarterly taxes, you will get a refund immediately. The same is the case when your estimated tax payments do not fulfill the tax demand for the year. You need to pay the additional tax amount required to the IRS.
When dollars start to fill your pockets, you become an eligible taxpayer citizen. Many taxpayers choose not to mention few payments to the IRS in order to save on taxes. But in general, if you compute your taxes accurately; you will wind up setting aside a lot of money with deductions.
The business travel tax deduction is a type of tax deduction mentioned by the IRS which is strictly meant for business-related travel expenses only. Be transparent with the payments you mention. It should not include any expenses that are utilized for your luxury or, say, personal purposes. Let us understand in detail how these business travel tax deductions work and what are the five ways you can save taxes on your travel expenses as a freelancer.
Five Possible Ways to Claim Business Travel Tax Deduction
Travel costs are deductible in the event that you can prove that your participation helps your business. Here is the list of travel expenses that are accountable for tax deductions.
Cost of Transportation
Traveling is an essential part of freelancing, whether you are a travel blogger or a freelance musician who loves to explore different cultures and traditions of art. Expenses involved in traveling are the standard and vital costs when you travel away from your home for your professional voyage.
Transportation cost is one such expense that is included in business travel tax deductions, which you can claim easily. Whether you travel by flight, bus, train, or four-wheeler, your ticket to these transportation modes is eligible for tax deductions.
Cost of taxi and rental cars
When you land at your destination, you need a taxi to reach to your hotel where you are staying. These taxi costs are also counted as tax-deductible. You need to record all the taxi fares or different types of transportation fares conducted between your:
Airport or railway station to your stay.
From your stay to your work location, business meeting sites, or your client’s area.
When you rent a car from your hometown to attend a business-related trip; the fare for the rented car is also deductible during tax filing.
In case you drive your own car to another city, the cost of maintenance is also tax-deductible. It includes amenities such as gas or oil receipts, standard mileage deduction, car wash, repair, tires, and other car-related issues.
Cost of Accommodation
Tax deduction also considers accommodation costs for the period of time you stay away from your town for your professional journey. It includes charges for hotels, inns, Airbnb stays, or any other mode of accommodation.
It also gives you the freedom to deduct the tip amount and Travel Expenses given to the hotel staff, porters; and any baggage carriers.
Cost of Meals
Your meal expenses during your business journey are tax-deductible. You can mention 100% of your food expenses while filing your tax return. The record book also includes grocery expenses and take-out services.
For all the meals you have in the restaurant or on your journey time; say on the flight or on the train, the cost gets relief from taxes.
Any food or beverage ordered for your potential business client, customers, any consultant, or business contacts is also tax-deductible.
Cost of parking and tolls
Any freelancer who travels on the occasion of its professional needs can deduct toll charges on their tax. Traveling on weekends to meet the family or daily transportation from home to the office considered non-deductible.
When you travel by your own car outside of your city, the parking charges at any point of the journey; strictly related to your business, are also tax-deductible.
Your travel to attend a conference meeting, off-site business meetings; or a stage to perform is qualified as a business trip and is eligible for a tax deduction. Get connect to Flyfin today, your leading helping hand in tax filing. Its AI-enabled Travel Expenses tax engine notifies you of every tax deduction so that you don’t miss on any! Flyfin, along with its team of CPA experts, guarantees you maximum savings on your tax payments. Simply connect all your expense accounts & FlyFin eliminates 98% of your work.