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Are Transportation and Travel Tax Deductible?

Find out exactly what is and isn’t tax deductible when it comes to travel expenses.

While transportation can be practically essential to earning an income, the costs of travel and transport aren’t always tax deductible. We explain situations where you can safely claim the cost of travel and transport and when you can’t.

The General Rule about Travel

The ATO generally does not permit individuals to deduct the cost of travel to and from work because it is a ‘personal’ expense that should be handled by the individual incurring it.

Exceptions to the Rule

Despite the general rule above, there are exceptions that you should consider to determine whether travel is a deductible expense in your situation. For example, the ATO states that you can claim for travel if you use part of your home to do your work and then need to travel to your workplace to continue your work for the same employer.

Necessary Transport

If your job involves transporting large quantities of resources, documents, tools and so on, the requirement for personal travel becomes directly tied to an individual’s ability to earn income. Therefore, in those instances, the cost of travel to and from work may in fact be tax deductible.

On-the-job Travel

The cost of travel and transport may also be tax deductible where you are required to travel from your ordinary place of business to another venue for work purposes. An example might be a work conference or seminar, a client’s premises or a work-related activity.

In that case, not only can you claim the cost of personal or public travel, but you can also claim ancillary costs such as parking expenses incurred for that purpose. However, you obviously cannot claim speeding or parking fines.

Self-education Travel

Another way in which you can claim travel costs is if you are undertaking study or self-education to improve or enhance your skills for your current occupation. In this case, you can claim the costs of after-work travel to seminars and night classes, as well as the cost from that venue directly home.

Remember to keep all your receipts and logbooks in order to claim travel costs effectively. For more tax tips, visit our Small Business Centre today.

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