In Actor Speak
There is a significant difference between travel and transportation. On other pages we have explanations for transportation, whether that means the use of public transportation or your personal auto.
In general we consider “travel for business” defined as when there is a sufficient distance from your home to the work location which requires a stay out of town for a night or more.
As the IRS puts it:
“You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.”
These trips are deductible whether they are for either work or to seek work in your current profession. On the other hand, “You may not deduct these expenses if you had them while looking for work in a new trade or business or while looking for work for the first time.”
Although this definition applies to most of us when we work on location or we are seeking work out of town, there is a caveat. Again, from the IRS:
“Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals, or lodging in Milwaukee because that is your tax home. Your travel on weekends to your family home in Chicago is not for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.”
For example, this could be the situation if you are working in a stage production for more than a year in a city close by to your home city.
But for most of us the costs involved when we travel for work are deductible. Travel expenses are the:
“ordinary and necessary expenses of traveling away from home for your business, profession, or job. You cannot deduct expenses that are lavish or extravagant or that are for personal purposes.”
Deductible travel expenses while away from home include, but are not limited to, the costs of:
Travel by airplane, train, bus, or car between your home and your business destination. (If you are provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero)
Using your car while at your business destination,
Fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel and the work location, and from one customer to another, or from one place of business to another
Meals and lodging
Tips you pay for services related to any of these expenses.
Dry cleaning and laundry.
Business calls while on your business trip (This includes business communications by fax machine or other communication devices)
Other similar ordinary and necessary expenses related to your business travel (These expenses might include transportation to and from a business meal, public stenographer's fees, computer rental fees, and operating a small temporary office).
Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel.
As with most deductions, you would need to keep proof of the expense of any travel such as airfares.
As we have explained on the transportation page, depending on how you are writing off the expenses of your own car you would need to keep both the mileage and then possibly any additional costs involved such as gasoline and similar expenses.
If you do stay in a hotel then you are required to keep proof of those costs, both the bills from the hotel (or apartment in the case of long term stays) as well as proof of how those bills were paid, check (credit card, cash.)
If you stay with friends and/or relatives you are entitled to write off any costs you may incur to reimburse them for your stay but, once again, you are required to be able to prove those expenses.
Actors who are working out of town on union projects are usually paid a per diem amount by the producer to offset their expenses. If the costs of the hotel are covered by the producer then obviously the performer is not allowed to write off that expense. The same is true for air travel paid for by the production.
However meal per diem and mileage reimbursement under union contracts often do not equal the amounts that the GSA or the IRS allows the taxpayer as “standard” deductions. When this is the case the DIFFERENCE between the two figures is then deductible assuming there is a cost to the taxpayer. Should the per diem actually exceed the amount the government allows then the taxpayer should be declaring that additional income as taxable on their return.
Often actors are willing to travel and put themselves up on their own dime in order to work on location so they can be hired as a “local hire”. If you travel to a location and put yourself up so you can get work as a “local hire” then obviously you will not be receiving reimbursement from the production for your expenses. That’s OK. Obviously your expenses will be significantly higher than normal but don’t be concerned that because you represented yourself as a “local hire” that the IRS will disallow your deductions for some reason. They understand your need to work. Just make sure you keep all of the receipts to validate the additional costs you will have to pay for.
Out of Town Meals
Meals are deductible as well when you are out of town. It is usually easier to use the “per diem” rates that have been established by the U.S. General Services Administration (GSA) and which are accepted by the IRS for the amount you are entitled to write off for meals and tips for every day you are out of town. The amount the GSA has developed may vary significantly from city to city (from $51 per day to $74 per day) but in general using their rates is much easier than keeping all the receipts throughout the day for the cost of meals you have when out of town.
There are two caveats here:
1) On Travel days (i.e. those days getting to your location from home and then returning home from the location) you are only allowed to take 3/4s of the per diem amount listed.
2) You are not confined to the amount the GSA has established for every day you may be on your trip. If for example, you have a special business meeting on one of the evenings during your trip and the amount you spend is considerably more than what the GSA has established, you are allowed to substitute actual receipts for that day (and any number of days) that exception occurs.
Here is the link to the GSA website for per diem rates throughout the country:
WARNING: By clicking this link you are leaving this website and visiting the website of the U.S. General Services Administration. It's no problem but you will have to find your way back.
In the Words of the IRS:
"If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. "
Traveling Away From Home
You are traveling away from home if:
Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and
You need to sleep or rest to meet the demands of your work while away from home.
This rest requirement is not satisfied by merely napping in your car. You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest.
To determine whether you are traveling away from home, you must first determine the location of your tax home.
If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live.
If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home.
Main place of business or work
If you have more than one place of work, consider the following when determining which one is your main place of business or work.
The total time you ordinarily spend in each place.
The level of your business activity in each place.
Whether your income from each place is significant or insignificant.
No main place of business or work
You may have a tax home even if you do not have a regular or main place of work. Your tax home may be the home where you regularly live.
Factors used to determine tax home
If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is.
You perform part of your business in the area of your main home and use that home for lodging while doing business in the area.
You have living expenses at your main home that you duplicate because your business requires you to be away from that home.
You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging.
If you satisfy all three factors, your tax home is the home where you regularly live. If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses.
Tax Home Different From Family Home
If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. You also cannot deduct the cost of meals and lodging while at your tax home.
If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home.
Temporary Assignment or Job
You may regularly work at your tax home and also work at another location. It may not be practical to return to your tax home from this other location at the end of each work day.
Temporary assignment vs. indefinite assignment
If your assignment or job away from your main place of work is temporary, your tax home does not change. You are considered to be away from home for the whole period you are away from your main place of work. You can deduct your travel expenses if they otherwise qualify for deduction. Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less.
However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year.
If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. You may be able to deduct the cost of relocating to your new tax home as a moving expense. See Publication 521 for more information.
Determining temporary or indefinite
You must determine whether your assignment is temporary or indefinite when you start work. If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. An assignment or job that is initially temporary may become indefinite due to changed circumstances. A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment.
The following examples illustrate whether an assignment or job is temporary or indefinite.
Going home on days off
If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. You cannot deduct the cost of your meals and lodging there. However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work.
If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work.
Probationary work period.
If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. You cannot deduct any of your expenses for meals and lodging during the probationary period.
What Travel Expenses Are Deductible?
Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible.
You can deduct ordinary and necessary expenses you have when you travel away from home on business. The type of expense you can deduct depends on the facts and your circumstances.
When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. You can use a log, diary, notebook, or any other written record to keep track of your expenses.
If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. You must have a reasonable basis for making this allocation.
For example, you must allocate your expenses if a hotel includes one or more meals in its room charge.
Travel expenses for another individual.
If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses.
You can deduct the cost of meals in either of the following situations.
Lavish or extravagant
You cannot deduct expenses for meals that are lavish or extravagant. An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts.
50% limit on meals
You can figure your meals expense using either of the following methods.
Both of these methods are explained below. But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals.
If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment.
You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. If you use this method, you must keep records of your actual cost.
Standard Meal Allowance
Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. The set amount varies depending on where and when you travel. If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel.
The term “incidental expenses” means:
Fees and tips given to porters, baggage carriers, bellhops, hotel maids, stewards or stewardesses and others on ships, and hotel servants in foreign countries,
Transportation between places of lodging or business and places where meals are taken, if suitable meals can be obtained at the temporary duty site, and
Mailing costs associated with filing travel vouchers and payment of employer-sponsored charge card billings.
Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, or the costs of telegrams or telephone calls.
Incidental expenses only method
You can use an optional method (instead of actual cost) for deducting incidental expenses only. The amount of the deduction is $5 a day. You can use this method only if you did not pay or incur any meal expenses. You cannot use this method on any day that you use the standard meal allowance. This method is subject to the proration rules for partial days.
The incidental expenses only method is not subject to the 50% limit discussed below.
Who can use the standard meal allowance.
You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses.
Use of the standard meal allowance for other travel. You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. You can also use it to figure your meal expenses when you travel for qualifying educational purposes. You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes.
Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2011, the rate for most small localities in the United States is $46 a day.
Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. These rates are listed in Publication 1542, Per Diem Rates, which is available on the Internet at IRS.gov.