Are Travel Expenses Tax Deductible?
To deduct workplace expenses, your total itemized deductions must exceed the standard deduction. You must also meet what’s called "the 2% floor." That is, the total of the expenses you deduct must be greater than 2% of your adjusted gross income, and you can deduct only the expenses over that amount.
With that in mind, there are two categories of travel expenses, separated into tax deductible and non-tax-deductible expenses.
👉🏻 Tax Deductible:
Food and beverage expenses
Motor-vehicle expenses
Lodging expenses
👉🏻 Non-Tax-Deductible:
Transportation expenses
To deduct your travelling expenses, you must meet all of the following conditions:
You were normally required to work away from your employer's place of business or in different places.
Under your contract of employment, you had to pay your own travelling expenses.
You did not receive a non-taxable allowance for travelling expenses. Generally, an allowance is non-taxable as long as it is a reasonable amount.
You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed and signed by your employer.
All expenses must have incurred within the tax year.
In addition, for food and beverage expenses, you can only deduct the expense if your employer requires you to be away for at least 12 consecutive hours from the municipality and the metropolitan area of your employer's location where you normally report for work.
The most you can deduct for food and beverage expenses is 50% of the lesser of:
The amount paid;
The amount that is reasonable in the circumstances.
The 50% limit also applies to the cost of food and beverages you paid for when you travelled on an airplane, train, or bus, as long as the ticket price did not include these amounts.
For more information, refer to the articles on CRA and Turbotax websites.
(*) This article is intended as general information only and is not to be relied upon as constituting legal, financial, or other professional advice. A professional advisor should be consulted regarding your specific situation.
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