In a perfect world, all Guard and Reserve members would receive travel reimbursements when they report to Drill duty. Unfortunately, that is not the case. While some members are reimbursed for their travel expenses, not all branches of the military and not all units authorize travel reimbursements for attending regularly scheduled drills.
Thankfully, 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 may be able to deduct travel related expenses including mileage, hotel and lodging, parking fees, tolls, and half the cost of your meals, up to the federal per diem limits.
Prior to the most recent tax system overhaul, the Tax Cuts and Jobs Act of 2017, it was also possible for members of the Reserve Component to claim expenses if they live less than 100 miles away from your drill location. However, recent changes to the tax laws have made some changes to these rules. (We’ll cover this in more detail below).
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.
Deducting 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. These deductions for travel-related expenses are not available for active duty service members.
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.
You must travel at least 100 miles to your duty location: 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. According to the IRS:
This deduction 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. Claim these expenses on Form 2106 or Form 2106-EZ and carry them to the appropriate line on Form 1040. Expenses in excess of the limit can be claimed only as an itemized deduction on Form 1040, Schedule A. Source.
2018 Mileage Rates: $0.535 (or 53.5 cents) per mile.
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 clean tax 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.
If you want a quick and dirty way to track your mileage, you can simply keep track of the number of times you traveled to and from home and your Guard or Reserve unit, and multiply that by the number of miles shown in Google Maps.
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 on Your Taxes
At the end of the year, add your related travel expenses. You will use this information to fill out Form 2106, 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.
How Reserve Travel Deductions Impact Your Taxes
The deduction for travel-related expenses is is a top-of-the-line tax deduction to your gross income, meaning it directly reduces your income before your taxes are calculated. As an example, if your income for the year was $50,000 and you had $2,500 in travel-related expenses, you would subtract the $2,500 from your $50,000 income, leaving your taxable income at $47,500. Of course, this does not include other tax deductions you may be eligible to receive. So you may be taxed on a lower percentage of your income after accounting for all eligible tax deductions.
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.
Changes Starting in 2018 Tax Year
The tax law changes in the Tax Cuts and Jobs Act of 2017 brought many changes to the U.S. tax system. The standard deduction was increased starting in tax year 2018. The rates almost doubled from 2017 to 2018, increasing from $6,350 to $12,000 for single taxpayers, and from $12,700 to $24,000 for couples.
Other changes included changing the income tax brackets, lowering tax rates, and reducing or eliminating certain itemized deductions. Many miscellaneous itemized deductions were eliminated, including the ability to deduct unreimbursed employee expenses on Schedule A of their taxes.
Guard and Reserve members who travel less than 100 miles from their home to perform their military duties are no longer eligible to deduct their mileage on their taxes. Prior to these changes, they were able to claim travel expenses as a Miscellaneous Itemized Deduction, which was subject to a 2% limit (travel expenses must be at least 2% of your adjusted gross income (AGI) before you can claim the deduction on your taxes).
Members may be authorized reimbursement for these expenses if offered by their branch of service or unit. Otherwise, the expense is now completely out of pocket.
Net Impact of Change: The increased standard deduction likely makes up for the inability to deduct travel expenses as a Miscellaneous Itemized Deduction.
The changes to the 2018 tax year mean you only need to track your mileage if you travel over 100 miles each way to your unit. That said, this is a very valuable deduction, and is absolutely worth taking if you are eligible.
For example, a 100 mile journey each way turns into a 200 mile round trip. At $0.535 per mile, that would add up to a $107.00 deduction for each drill weekend. Twelve of those would equal a $1,284 deduction. This is the bare minimum situation and doesn’t include other expenses such as food, tolls, etc.
My unit is approximately 210 miles from my residence. That puts my annual mileage round 5,040. At the 2018 rate of $0.535 per mile, that comes out to an above-the-line tax deduction of $2,696.40. That has a big impact when I file my taxes each year.
Bottom line: 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.