It’s tax time, the time of year that everyone loves to hate. Most locums docs are paid as a contract/1099 employee which means that you are self-employed. Being self-employed has unique tax advantages that you should be aware of, especially as it relates to travel which, as a locums doc, you likely do a lot of.
There are a lot of things a locums doc must consider when filing their taxes. You must understand your specific tax deadlines and keep great records so that taxes can be a breeze for you. Here we’ll discuss how to deduct travel expenses as a locums doc.
When traveling for business-related purposes, the majority of your expenses are deductible. Costs ranging from your plane ticket, a portion of your meals, lodging, and even entertainment are tax-deductible.
Transportation. The cost of your airfare, train ticket, bus ticket, or whatever means of transportation that is necessary to reach your destination is tax-deductible.
- Even though you can fly first class, only purchase the class you can afford. Remember, you may be receiving a deduction for the expense, but you’re still footing the bill yourself.
- If traveling in your car, you can deduct the amount spent on gas or add the miles to your business mileage expense. If traveling in a rental car, you can deduct the amount spent on the rental, plus the gas as well. Furthermore, the miles you drive within the city you’re traveling to are also attributable to your deductible expenses.
Lodging. Your hotel stays are tax-deductible. However, this deduction only applies if you’re traveling without your family, as only then does it truly apply as business travel.
- Many hotels charge an additional fee for WIFI connection. If you must access the internet for any business reasons, you’re entitled to deduct the fees you incur for WIFI connectivity.
Meals and entertainment. While your other travel expenses are 100% tax-deductible, only 50% of your meals and entertainment expenses are deductible.
- If you have clients, you can take your clients out for dinner and drinks or for entertainment activities, such as golfing or a trip to the opera. Keep a business calendar with the name of the client and the business discussed for your records.
- If you must use your car to operate your business, even in your own city, you can deduct travel expenses. Trips such as driving to meet with clients, picking up supplies, trips to the post office to ship orders, and travel to networking events all classify as business use. A percentage of maintenance expenses, such as oil changes, tire rotation, car insurance, and gas are indeed deductible.
It’s important to keep receipts for your travel expenses. In doing so, you’ll be able to verify your claims in the case of an audit. Frivolous spending on business travel or driving your car excessive miles for business may trigger an audit, as many people either misuse or outright abuse the deduction.
Please be sure to consult with a CPA for these and other tax-related issues.