AccountingWeb shared this timely tax topic with Main Street Practitioner. As participation in the gig economy expands, tax preparers may find that their clients are asking more questions about their deductions. This quick Q&A from contributor Julian Block is a great reference for you and an easy answer to share with your clients.
Can Freelancers Legally Deduct Their Travel Expenses?
Question: I’m a Boston-based freelancer who writes books and articles on climate change and other scientific topics. Next month, I’ll be driving to attend a conference for science writers in Portland, Oregon. I’m pretty sure that I’m entitled to claim some deductions on Schedule C of Form 1040, but what sorts of expenses can I write off, and can I deduct them totally?
Answer: The law allows you to deduct 100 percent of the conference registration fee. Also entirely deductible are travel between Boston and Portland and hotel charges.
The IRS limits write-offs for meals not covered by the fee, including both what you eat en route and while you’re in Portland. The agency allows you to deduct only 50 percent of those expenditures.
It authorizes two options for car travel. One is to deduct actual expenses. The other is a standard mileage rate.
For 2019, the rate is 58 cents per mile. Whether you claim actual expenses, the standard rate, or the cost of a rental car, also deduct parking fees, as well as bridge, tunnel and turnpike tolls.
Revenue Service spoilsports insist that you stay within the speed limit. They draw the line at deductions for traffic infractions.
Deductions for conferences and other business travel provide an additional break. They don’t just reduce the amount you show as profit on Schedule C, thereby reducing the amount of your business income subject to income taxes. They also reduce the amount of your business income subject to self-employment taxes, as calculated on Schedule SE. Many freelancers get nicked more for self-employment taxes than for income taxes
You can find more questions and answers from Julian Block on AccountingWeb, as well as the article that was shared for your information.
About the Author
Attorney and author Julian Block is frequently quoted in the New York Times, Wall Street Journal, and the Washington Post. He has been cited as “a leading tax professional” (New York Times), an “accomplished writer on taxes” (Wall Street Journal), and “an authority on tax planning” (Financial Planning magazine). More information about his books can be found at julianblocktaxexpert.com.
The entire Q&A can be found here.