How to Claim Transit Tax Breaks
Although many people overlook them, you can claim tax breaks for some of your travel costs. For example, if you have to travel to a seminar for your business or drive to a neighboring state to volunteer after a disaster, you can offset some of your costs through tax deductions. You can claim most transit tax breaks using a version of IRS Form 2106 and IRS Form 1040. However, the IRS has specific rules for what can be deducted, so it is wise to review the agency's transit-related publications before claiming these deductions each year.
Other People Are Reading
Instructions
-
-
1
Deduct business travel expenses if you are an employee. Complete IRS form 2106 or 2106 EZ to record business travel expenses that were not reimbursed by your employer. Deduct airplane, train, bus, car, taxi and other transit fares that either take you to your destination or allow you to travel between business duties when traveling. For example, if you fly to Atlanta but take a taxi between appointments, you can deduct both fares. Also deduct expenses for meals, business calls, dry cleaning, tips and other business-related fees, such as renting an Internet terminal. You can only claim these deductions if you itemize.
-
2
Claim self-employment transit deductions by filling out IRS Form 1040, Schedule C; IRS Form 1040, Schedule C-EZ; or IRS 1040 Schedule F, for farmers. Deduct the same travel expenses mentioned in Step 1 if you incurred them while running a business you own. Also deduct the cost of using a car for your business. If you use your personal car for business, deduct only the costs associated with using the car for business. Review IRS Publication 463 for more information on car-related transit deductions.
-
-
3
Use IRS form 2106 or 2106-EZ to claim a military reservist transit deduction without itemizing deductions. Deduct "ordinary and necessary" costs of travel at least 100 miles from your home that requires an overnight stay and is mandated by the military. Claim only unreimbursed costs. Transfer the information from this form to your IRS Form 1040.
-
4
Claim tax breaks for your transportation to and while doing volunteer work. Deduct expenses for gas and oil, taxi fares or other public transportation fees incurred when traveling to a location where you will volunteer, but do not deduct costs for maintenance or upkeep. Also deduct expenses for driving or taking public transportation that is required when you volunteer. For example, deduct subway fair for taking a meal to an elderly couple if you are working with a charity that delivers meals to the homebound. Claim this deduction on your IRS Form 1040, Schedule A.
-
1
Tips & Warnings
You can also claim business expenses using IRS Form 2106 or 2106-EZ if you are unemployed. If you are searching for a new job in the same industry in which you worked before, you can deduct travel costs associated with your job search. But you can't deduct costs incurred when looking for a new type of job, for your first job or when entering the workforce after an extended period of unemployment.
Keep records of your travel expenses and why they were incurred. Although the IRS sometimes allows you to claim a per diem or standard mileage deduction instead of using your own records, Nolo.com notes that people who keep their records may be able to write off more. Good records are also helpful in case of an audit.
References
Resources
- Photo Credit Comstock/Comstock/Getty Images
