Did you know that members of the National Guard and military Reserves (including Reserve Corps of the Public Health Service) may be eligible to deduct travel related expenses when they file their tax returns? If you live more than 100 miles from your duty location and stay overnight, you can deduct travel related expenses including mileage, hotel and lodging, parking fees, tolls, and half the cost of your meals. You may also be able to claim expenses if you live less than 100 miles away from your drill location, however, the details are different. In some cases these deductions can be worth hundreds, or even thousands of dollars per year.
Let’s take a deeper look at these deductions to see how to qualify and claim them on your taxes.
Claiming Mileage and Travel Expenses for Guard / Reserve Duty
Eligibility: To be eligible to claim these expenses, you must be a member of a reserve component of the Armed Forces of the United States, including the Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve; the Army National Guard of the United States; the Air National Guard of the United States; or the Reserve Corps of the Public Health Service.
Only duty-related travel: All related travel expense must be incurred for the sole purpose of serving on official duty in the Guard or Reserves. If your travel is not for the sole purpose of official duty, then you cannot claim it as an expense on your tax return.
How far did you travel? As mentioned, there are two standards for claiming travel related expenses on your tax return if you serve in the Guard or Reserves. Let’s get the easiest one out of the way first. If you live within 100 miles of your duty location, you can only claim travel expenses as a Miscellaneous Itemized Deduction, which is subject to a 2% limit. In basic terms, your travel expenses must be at least 2% of your adjusted gross income (AGI) before you can claim the deduction on your taxes. Here is more information on deductions over the 2% limit.
If you traveled more than 100 miles to your duty location, you can deduct your travel expenses to include mileage, lodging, parking, tolls, and half the cost of meals. You can only deduct half the cost of meals because the IRS has determined people traveling outside of their normal commuting range would still incur food expenses regardless of where they were (this rule is the same for business owners who are traveling for business).
Allowable Expenses: According to the IRS, 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. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.
- 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 and maintaining a house trailer).
- Shipping of baggage, and sample or display material between your regular and temporary work locations.
How to Track Your Travel Expenses
If you plan on tracking your mileage and other expenses for tax purposes, then you need to keep clear records. Here are some tips:
Mileage: A good way to track your mileage is to keep a mileage logbook in your vehicle. Record the mileage on your vehicle when you start and stop your trip, and write the total number of miles you drove. Record this for each trip you take over the course of the year. You can record mileage with a standard notebook, mileage logbook, smartphone app, or with software such as Quicken. Be sure to include the journey to and from your home, as well as all related travel to and from your hotel and the base, if it is for official duty.
Lodging and other expenses: It’s always a good practice to keep all related receipts if you are taking a tax deduction, particularly if you will be adding up multiple month’s worth of expenses. The amount of expenses you can deduct on Form 1040 is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses), plus any parking fees, ferry fees, and tolls. In some cases, you may not get receipts for all expenses, such as parking and tolls. In these cases, be sure to document the expenses in your travel notebook, or by other means. For example, you could print a receipt for your tolls if you have an toll pass that tracks each toll you pass.
What if you weren’t tracking carefully all year? If you found out about this deduction part way through the year, you can still deduct your travel, even if you don’t have excellent records. However, you need to be careful – it is up to you to prove your expenses if you are audited. A good way to get a reasonable estimate of your travel is to use Google Maps, MapQuest, or another online map service to determine the distance from your home to your unit. Be sure to document the days you traveled and number of trips, and you should have a fairly accurate estimate of your miles traveled. It would be more difficult to determine how much you may have paid for food, tolls, and other expenses if you don’t have good records. It may be a good idea to forget about the other expenses if you can’t come up with a reasonably accurate list of expenses. Just work on keeping records from this point forward.
How to Claim the Travel Expenses
At the end of the year, add your related travel expenses. You will use this information to fill out Form 2016, Employee Business Expenses (pdf), or Form 2016-EZ, Unreimbursed Employee Business Expenses (pdf) – Form 2106 instructions. You will use this information when you fill out tax Form 1040.
If you use a software program to file your taxes, then your program will likely ask you if you have any related travel expenses for your duty with the Guard or Reserves. If you use a professional tax service, then be sure to give this information to your tax preparer – he or she will take care of it for you.
Exceptions to Travel Deductions
You cannot claim mileage or other expenses that are reimbursed. For example, some Guard or Reserve units pay for lodging when their members travel from out of town for drill weekends. If your unit puts you up in a hotel for your drill weekend or reimburses your expense, you cannot also claim that as a tax deduction. That would be double dipping, and fraudulent. You cannot also claim mileage expenses if you unit reimburses you for the miles you drove. This goes for all related expenses and possible reimbursements.
Be sure to document your travel mileage and other expenses. They will add up quickly and could potentially put hundreds of dollars or more back in your pocket. For example, a 100 mile journey turns into a 200 mile round trip. At $0.56 per mile, that would add up to a $112 deduction for each drill weekend. Twelve of those would equal a $1,344 deduction. This is the bare minimum situation and doesn’t include other expenses such as food, tolls, etc.
Photo credit: Nicholas A. Tonelli