Sunday, January 29, 2012

Travel expenses on my tax return

Question: Ralph, I was just recently promoted to a sales position with my company and they now require that I travel throughout the East Coast visiting clients. My company picks up the costs of my airline flights and my hotels room, they even have been giving me $25 per day for meals. I was wondering if I have to report the $25 per day as income and if I can deduct my other expenses since I now have to pay for taxis from the airport, hotel laundry services and my meals generally cost more than the $25 per day since my clients are in the larger cities. Please help, this is very confusing to me.

Answer: First of all congratulations on your promotion. The move to a sales position can be difficult to manage at first, but most of our clients who take on sales positions find them very rewarding both for their career and financially. You must also take a closer look at your expenses because you will miss out on some deductible expenses. Since your employer is covering the costs of your airline and hotel and even giving you a modest daily meal stipend, they are probably taking care of most of the expenses. You will want to keep track of the balance of your expenses so at tax time we can take a deduction. Keep track of all of your unreimbursed expenses and make sure you mention them when you prepare your taxes. These deductions are Misc. itemized deductions and they are taken on your Schedule A of your tax return. These deductions are subject to a 2% limitation based on your Adjusted Gross Income, but with the amount of travel you will most likely undertake, you will find this to be a potentially fruitful deduction.

For navigating this tax issue as well as other tax complications, contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at 302-659-6560 or visit our website at

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