maximum travel expenses deduction

Everything You Need to Know About the Business Travel Tax Deduction

Justin is an IRS Enrolled Agent, allowing him to represent taxpayers before the IRS. He loves helping freelancers and small business owners save on taxes. He is also an attorney and works part-time with the Keeper Tax team.

You don’t have to fly first class and stay at a fancy hotel to claim travel expense tax deductions. Conferences, worksite visits, and even a change of scenery can (sometimes) qualify as business travel.

What counts as business travel?

The IRS does have a few simple guidelines for determining what counts as business travel. Your trip has to be:

Mostly business
An “ordinary and necessary” expense
Someplace far away from your “tax home”

What counts as "mostly business"?

The IRS will measure your time away in days. If you spend more days doing business activities than not, your trip is considered "mostly business". Your travel days are counted as work days.

Special rules for traveling abroad

If you are traveling abroad for business purposes, you trip counts as " entirely for business " as long as you spend less than 25% of your time on personal activities (like vacationing). Your travel days count as work days.

So say you you head off to Zurich for nine days. You've got a seven-day run of conference talks, client meetings, and the travel it takes to get you there. You then tack on two days skiing on the nearby slopes.

Good news: Your trip still counts as "entirely for business." That's because two out of nine days is less than 25%.

What is an “ordinary and necessary” expense?

“Ordinary and necessary” means that the trip:

Makes sense given your industry, and
Was taken for the purpose of carrying out business activities

If you have a choice between two conferences — one in your hometown, and one in London — the British one wouldn’t be an ordinary and necessary expense.

What is your tax home?

A taxpayer can deduct travel expenses anytime you are traveling away from home but depending on where you work the IRS definition of “home” can get complicated.

Your tax home is often — but not always — where you live with your family (what the IRS calls your "family home"). When it comes to defining it, there are two factors to consider:

What's your main place of business, and
How large is your tax home

What's your main place of business?

If your main place of business is somewhere other than your family home, your tax home will be the former — where you work, not where your family lives.

For example, say you:

Live with your family in Chicago, but
Work in Milwaukee during the week (where you stay in hotels and eat in restaurants)

Then your tax home is Milwaukee. That's your main place of business, even if you travel back to your family home every weekend.

How large is your tax home?

In most cases, your tax home is the entire city or general area where your main place of business is located.

The “entire city” is easy to define but “general area” gets a bit tricker. For example, if you live in a rural area, then your general area may span several counties during a regular work week.

Rules for business travel

Want to check if your trip is tax-deductible? Make sure it follows these rules set by the IRS.

1. Your trip should take you away from your home base

A good rule of thumb is 100 miles. That’s about a two hour drive, or any kind of plane ride. To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn’t your home.

2. You should be working regular hours

In general, that means eight hours a day of work-related activity.

It’s fine to take personal time in the evenings, and you can still take weekends off. But you can’t take a half-hour call from Disneyland and call it a business trip.

Here's an example. Let’s say you’re a real estate agent living in Chicago. You travel to an industry conference in Las Vegas. You go to the conference during the day, go out in the evenings, and then stay the weekend. That’s a business trip!

3. The trip should last less than a year

Once you’ve been somewhere for over a year, you’re essentially living there. However, traveling for six months at a time is fine!

For example, say you’re a freelancer on Upwork, living in Seattle. You go down to stay with your sister in San Diego for the winter to expand your client network, and you work regular hours while you’re there. That counts as business travel.

What about digital nomads?

With the rise of remote-first workplaces, many freelancers choose to take their work with them as they travel the globe. There are a couple of requirements these expats have to meet if they want to write off travel costs.

Requirement #1: A tax home

Digital nomads have to be able to claim a particular foreign city as a tax home if they want to write off any travel expenses. You don't have to be there all the time — but it should be your professional home base when you're abroad.

For example, say you've rent a room or a studio apartment in Prague for the year. You regularly call clients and finish projects from there. You still travel a lot, for both work and play. But Prague is your tax home, so you can write off travel expenses.

Requirement #2: Some work-related reason for traveling

As long as you've got a tax home and some work-related reason for traveling, these excursion count as business trips. Plausible reasons include meeting with local clients, or attending a local conference and then extending your stay.

However, if you’re a freelance software developer working from Thailand because you like the weather, that unfortunately doesn't count as business travel.

The travel expenses you can write off

As a rule of thumb, all travel-related expenses on a business trip are tax-deductible. You can also claim meals while traveling, but be careful with entertainment expenses (like going out for drinks!).

Here are some common travel-related write-offs you can take.

🛫 All transportation

Any transportation costs are a travel tax deduction. This includes traveling by airplane, train, bus, or car. Baggage fees are deductible, and so are Uber rides to and from the airport.

Just remember: if a client is comping your airfare, or if you booked your ticket with frequent flier miles, then it isn't deductible since your cost was $0.

If you rent a car to go on a business trip, that rental is tax-deductible. If you drive your own vehicle, you can either take actual costs or use the standard mileage deduction. There's more info on that in our guide to deducting car expenses .

Hotels, motels, Airbnb stays, sublets on Craigslist, even reimbursing a friend for crashing on their couch: all of these are tax-deductible lodging expenses.

🥡 Meals while traveling

If your trip has you staying overnight — or even crashing somewhere for a few hours before you can head back — you can write off food expenses. Grabbing a burger alone or a coffee at your airport terminal counts! Even groceries and takeout are tax-deductible.

One important thing to keep in mind: You can usually deduct 50% of your meal costs. For 2021 and 2022, meals you get at restaurants are 100% tax-deductible. Go to the grocery store, though, and you’re limited to the usual 50%.

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🌐 Wi-Fi and communications

Wi-Fi — on a plane or at your hotel — is completely deductible when you’re traveling for work. This also goes for other communication expenses, like hotspots and international calls.

If you need to ship things as part of your trip — think conference booth materials or extra clothes — those expenses are also tax-deductible.

👔 Dry cleaning

Need to look your best on the trip? You can write off related expenses, like laundry charges.

{write_off_block}

Travel expenses you can't deduct

Some travel costs may seem like no-brainers, but they're not actually tax-deductible. Here are a couple of common ones to watch our for.

The cost of bringing your child or spouse

If you bring your child or spouse on a business trip, your travel expense deductions get a little trickier. In general, the cost of bring other people on a business trip is considered personal expense — which means it's not deductible.

You can only deduct travel expenses if your child or spouse:

Is an employee,
Has a bona fide business purpose for traveling with you, and
Would otherwise be allowed to deduct the travel expense on their own

Some hotel bill charges

Staying in a hotel may be required for travel purposes. That's why the room charge and taxes are deductible.

Some additional charges, though, won't qualify. Here are some examples of fees that aren't tax-deductible:

Gym or fitness center fees
Movie rental fees
Game rental fees

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Where to claim travel expenses when filing your taxes

If you are self-employed, you will claim all your income tax deduction on the Schedule C. This is part of the Form 1040 that self-employed people complete ever year.

What happens if your business deductions are disallowed?

If the IRS challenges your business deduction and they are disallowed, there are potential penalties. This can happen if:

The deduction was not legitimate and shouldn't have been claimed in the first place, or
The deduction was legitimate, but you don't have the documentation to support it

When does the penalty come into play?

The 20% penalty is not automatic. It only applies if it allowed you to pay substantially less taxes than you normally would. In most cases, the IRS considers “substantially less” to mean you paid at least 10% less.

In practice, you would only reach this 10% threshold if the IRS disqualified a significant number of your travel deductions.

How much is the penalty?

The penalty is normally 20% of the difference between what you should have paid and what you actually paid. You also have to make up the original difference.

In total, this means you will be paying 120% of your original tax obligation: your original obligation, plus 20% penalty.

Justin W. Jones, EA, JD

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How to Deduct Travel Expenses (with Examples)

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November 3, 2022

This article is Tax Professional approved

Good news: most of the regular costs of business travel are tax deductible.

Even better news: as long as the trip is primarily for business, you can tack on a few vacation days and still deduct the trip from your taxes (in good conscience).

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Even though we advise against exploiting this deduction, we do want you to understand how to leverage the process to save on your taxes, and get some R&R while you’re at it.

Follow the steps in this guide to exactly what qualifies as a travel expense, and how to not cross the line.

The travel needs to qualify as a “business trip”

Unfortunately, you can’t just jump on the next plane to the Bahamas and write the trip off as one giant business expense. To write off travel expenses, the IRS requires that the primary purpose of the trip needs to be for business purposes.

Here’s how to make sure your travel qualifies as a business trip.

1. You need to leave your tax home

Your tax home is the locale where your business is based. Traveling for work isn’t technically a “business trip” until you leave your tax home for longer than a normal work day, with the intention of doing business in another location.

2. Your trip must consist “mostly” of business

The IRS measures your time away in days. For a getaway to qualify as a business trip, you need to spend the majority of your trip doing business.

For example, say you go away for a week (seven days). You spend five days meeting with clients, and a couple of days lounging on the beach. That qualifies as business trip.

But if you spend three days meeting with clients, and four days on the beach? That’s a vacation. Luckily, the days that you travel to and from your location are counted as work days.

3. The trip needs to be an “ordinary and necessary” expense

“Ordinary and necessary ” is a term used by the IRS to designate expenses that are “ordinary” for a business, given the industry it’s in, and “necessary” for the sake of carrying out business activities.

If there are two virtually identical conferences taking place—one in Honolulu, the other in your hometown—you can’t write off an all-expense-paid trip to Hawaii.

Likewise, if you need to rent a car to get around, you’ll have trouble writing off the cost of a Range Rover if a Toyota Camry will get you there just as fast.

What qualifies as “ordinary and necessary” can seem like a gray area at times, and you may be tempted to fudge it. Our advice: err on the side of caution. if the IRS chooses to investigate and discovers you’ve claimed an expense that wasn’t necessary for conducting business, you could face serious penalties .

4. You need to plan the trip in advance

You can’t show up at Universal Studios , hand out business cards to everyone you meet in line for the roller coaster, call it “networking,” and deduct the cost of the trip from your taxes. A business trip needs to be planned in advance.

Before your trip, plan where you’ll be each day, when, and outline who you’ll spend it with. Document your plans in writing before you leave. If possible, email a copy to someone so it gets a timestamp. This helps prove that there was professional intent behind your trip.

The rules are different when you travel outside the United States

Business travel rules are slightly relaxed when you travel abroad.

If you travel outside the USA for more than a week (seven consecutive days, not counting the day you depart the United States):

You must spend at least 75% of your time outside of the country conducting business for the entire getaway to qualify as a business trip.

If you travel outside the USA for more than a week, but spend less than 75% of your time doing business, you can still deduct travel costs proportional to how much time you do spend working during the trip.

For example, say you go on an eight-day international trip. If you spend at least six days conducting business, you can deduct the entire cost of the trip as a business expense—because 6 is equivalent to 75% of your time away, which, remember, is the minimum you must spend on business in order for the entire trip to qualify as a deductible business expense.

But if you only spend four days out of the eight-day trip conducting business—or just 50% of your time away—you would only be able to deduct 50% of the cost of your travel expenses, because the trip no longer qualifies as entirely for business.

List of travel expenses

Here are some examples of business travel deductions you can claim:

Plane, train, and bus tickets between your home and your business destination
Baggage fees
Laundry and dry cleaning during your trip
Rental car costs
Hotel and Airbnb costs
50% of eligible business meals
50% of meals while traveling to and from your destination

On a business trip, you can deduct 100% of the cost of travel to your destination, whether that’s a plane, train, or bus ticket. If you rent a car to get there, and to get around, that cost is deductible, too.

The cost of your lodging is tax deductible. You can also potentially deduct the cost of lodging on the days when you’re not conducting business, but it depends on how you schedule your trip. The trick is to wedge “vacation days” in between work days.

Here’s a sample itinerary to explain how this works:

Thursday: Fly to Durham, NC. Friday: Meet with clients. Saturday: Intermediate line dancing lessons. Sunday: Advanced line dancing lessons. Monday: Meet with clients. Tuesday: Fly home.

Thursday and Tuesday are travel days (remember: travel days on business trips count as work days). And Friday and Monday, you’ll be conducting business.

It wouldn’t make sense to fly home for the weekend (your non-work days), only to fly back into Durham for your business meetings on Monday morning.

So, since you’re technically staying in Durham on Saturday and Sunday, between the days when you’ll be conducting business, the total cost of your lodging on the trip is tax deductible, even if you aren’t actually doing any work on the weekend.

It’s not your fault that your client meetings are happening in Durham—the unofficial line dancing capital of America .

Meals and entertainment during your stay

Even on a business trip, you can only deduct a portion of the meal and entertainment expenses that specifically facilitate business. So, if you’re in Louisiana closing a deal over some alligator nuggets, you can write off 50% of the bill.

Just make sure you make a note on the receipt, or in your expense-tracking app , about the nature of the meeting you conducted—who you met with, when, and what you discussed.

On the other hand, if you’re sampling the local cuisine and there’s no clear business justification for doing so, you’ll have to pay for the meal out of your own pocket.

Meals and entertainment while you travel

While you are traveling to the destination where you’re doing business, the meals you eat along the way can be deducted by 50% as business expenses.

This could be your chance to sample local delicacies and write them off on your tax return. Just make sure your tastes aren’t too extravagant. Just like any deductible business expense, the meals must remain “ordinary and necessary” for conducting business.

How Bench can help

Surprised at the kinds of expenses that are tax-deductible? Travel expenses are just one of many unexpected deductible costs that can reduce your tax bill. But with messy or incomplete financials, you can miss these tax saving expenses and end up with a bigger bill than necessary.

Enter Bench, America’s largest bookkeeping service. With a Bench subscription, your team of bookkeepers imports every transaction from your bank, credit cards, and merchant processors, accurately categorizing each and reviewing for hidden tax deductions. We provide you with complete and up-to-date bookkeeping, guaranteeing that you won’t miss a single opportunity to save.

Want to talk taxes with a professional? With a premium subscription, you get access to unlimited, on-demand consultations with our tax professionals. They can help you identify deductions, find unexpected opportunities for savings, and ensure you’re paying the smallest possible tax bill. Learn more .

Bringing friends & family on a business trip

Don’t feel like spending the vacation portion of your business trip all alone? While you can’t directly deduct the expense of bringing friends and family on business trips, some costs can be offset indirectly.

Driving to your destination

Have three or four empty seats in your car? Feel free to fill them. As long as you’re traveling for business, and renting a vehicle is a “necessary and ordinary” expense, you can still deduct your business mileage or car rental costs even when others join you for the ride.

One exception: If you incur extra mileage or “unnecessary” rental costs because you bring your family along for the ride, the expense is no longer deductible because it isn’t “necessary or ordinary.”

For example, let’s say you had to rent an extra large van to bring your children on a business trip. If you wouldn’t have needed to rent the same vehicle to travel alone, the expense of the extra large van no longer qualifies as a business deduction.

Renting a place to stay

Similar to the driving expense, you can only deduct lodging equivalent to what you would use if you were travelling alone.

However, there is some flexibility. If you pay for lodging to accommodate you and your family, you can deduct the portion of lodging costs that is equivalent to what you would pay only for yourself .

For example, let’s say a hotel room for one person costs $100, but a hotel room that can accommodate your family costs $150. You can rent the $150 option and deduct $100 of the cost as a business expense—because $100 is how much you’d be paying if you were staying there alone.

This deduction has the potential to save you a lot of money on accommodation for your family. Just make sure you hold on to receipts and records that state the prices of different rooms, in case you need to justify the expense to the IRS

Heads up. When it comes to AirBnB, the lines get blurry. It’s easy to compare the cost of a hotel room with one bed to a hotel room with two beds. But when you’re comparing significantly different lodgings, with different owners—a pool house versus a condo, for example—it becomes hard to justify deductions. Sticking to “traditional” lodging like hotels and motels may help you avoid scrutiny during an audit. And when in doubt: ask your tax advisor.

So your trip is technically a vacation? You can still claim any business-related expenses

The moment your getaway crosses the line from “business trip” to “vacation” (e.g. you spend more days toasting your buns than closing deals) you can no longer deduct business travel expenses.

Generally, a “vacation” is:

A trip where you don’t spend the majority of your days doing business
A business trip you can’t back up with correct documentation

However, you can still deduct regular business-related expenses if you happen to conduct business while you’re on vacay.

For example, say you visit Portland for fun, and one of your clients also lives in that city. You have a lunch meeting with your client while you’re in town. Because the lunch is business related, you can write off 50% of the cost of the meal, the same way you would any other business meal and entertainment expense . Just make sure you keep the receipt.

Meanwhile, the other “vacation” related expenses that made it possible to meet with this client in person—plane tickets to Portland, vehicle rental so you could drive around the city—cannot be deducted; the trip is still a vacation.

If your business travel is with your own vehicle

There are two ways to deduct business travel expenses when you’re using your own vehicle.

Actual expenses method
Standard mileage rate method

Actual expenses is where you total up the actual cost associated with using your vehicle (gas, insurance, new tires, parking fees, parking tickets while visiting a client etc.) and multiply it by the percentage of time you used it for business. If it was 50% for business during the tax year, you’d multiply your total car costs by 50%, and that’d be the amount you deduct.

Standard mileage is where you keep track of the business miles you drove during the tax year, and then you claim the standard mileage rate .

The cost of breaking the rules

Don’t bother trying to claim a business trip unless you have the paperwork to back it up. Use an app like Expensify to track business expenditure (especially when you travel for work) and master the art of small business recordkeeping .

If you claim eligible write offs and maintain proper documentation, you should have all of the records you need to justify your deductions during a tax audit.

Speaking of which, if your business is flagged to be audited, the IRS will make it a goal to notify you by mail as soon as possible after your filing. Usually, this is within two years of the date for which you’ve filed. However, the IRS reserves the right to go as far back as six years.

Tax penalties for disallowed business expense deductions

If you’re caught claiming a deduction you don’t qualify for, which helped you pay substantially less income tax than you should have, you’ll be penalized. In this case, “substantially less” means the equivalent of a difference of 10% of what you should have paid, or $5,000—whichever amount is higher.

The penalty is typically 20% of the difference between what you should have paid and what you actually paid in income tax. This is on top of making up the difference.

Ultimately, you’re paying back 120% of what you cheated off the IRS.

If you’re slightly confused at this point, don’t stress. Here’s an example to show you how this works:

Suppose you would normally pay $30,000 income tax. But because of a deduction you claimed, you only pay $29,000 income tax.

If the IRS determines that the deduction you claimed is illegitimate, you’ll have to pay the IRS $1200. That’s $1000 to make up the difference, and $200 for the penalty.

Form 8275 can help you avoid tax penalties

If you think a tax deduction may be challenged by the IRS, there’s a way you can file it while avoiding any chance of being penalized.

File Form 8275 along with your tax return. This form gives you the chance to highlight and explain the deduction in detail.

In the event you’re audited and the deduction you’ve listed on Form 8275 turns out to be illegitimate, you’ll still have to pay the difference to make up for what you should have paid in income tax—but you’ll be saved the 20% penalty.

Unfortunately, filing Form 8275 doesn’t reduce your chances of being audited.

Where to claim travel expenses

If you’re self-employed, you’ll claim travel expenses on Schedule C , which is part of Form 1040.

When it comes to taking advantage of the tax write-offs we’ve discussed in this article—or any tax write-offs, for that matter—the support of a professional bookkeeping team and a trusted CPA is essential.

Accurate financial statements will help you understand cash flow and track deductible expenses. And beyond filing your taxes, a CPA can spot deductions you may have overlooked, and represent you during a tax audit.

Learn more about how to find, hire, and work with an accountant . And when you’re ready to outsource your bookkeeping, try Bench .

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Building Your Business
Business Taxes

7 Rules You Should Know About Deducting Business Travel Expenses

What Is Your "Tax Home"?

Charges on Your Hotel Bill

The 50% rule for meals, the cost of bringing a spouse, friend or employee.

Using Per Diems To Calculate Employee Travel Costs

Combined Business/Personal Trips

International business travel.

The Cost of a Cruise (Within Limits)

Frequently Asked Questions (FAQs)

Helde Benser / Getty Images

The IRS has a specific definition for business travel when it comes to determining whether these expenses are tax deductible. The agency says business travel is travel that takes you away from your tax home and is "substantially longer than an ordinary day's work." It requires that you sleep or rest while you're away from home, and that you do so. The travel must be "temporary." This means it can't last a year or more.

Key Takeaways

You can deduct expenses that take you away from your tax home for a period of time that would require you to spend the night.
Your tax home is the city or area where your regular place of business is located.
You’re limited to 50% of the cost of your meals.
Your trip must be entirely business-related for costs to be deductible, but special rules apply if you travel outside the U.S.

What Is Your "Tax Home"?

Your tax home is a concept set by the IRS to help determine whether a trip is tax deductible. It's defined by the IRS as the entire city or general area where your regular place of business is located. It's not necessarily the area where you live.

Your tax home can be used to determine whether your business travel expenses are deductible after you've determined where it's located. You can probably count your expenses during travel as business deductions if you have to leave your tax home overnight or if you otherwise need time to rest and sleep while you're away.

Check with a tax professional to make sure you're accurately identifying the location of your tax home.

Charges for your room and associated tax are deductible, as are laundry expenses and charges for phone calls or for use of a fax machine. Tips are deductible as well. But additional personal charges, such as gym fees or fees for movies or games aren't deductible.

You can deduct the cost of meals while you're traveling, but entertainment expenses are no longer deductible and you can't deduct "lavish or extravagant" meals.

Meal costs are deductible at 50%. The 50% limit also applies to taxes and tips. You can use either your actual costs or a standard meal allowance to take a meal cost deduction, as long as it doesn't exceed the 50% limit.

The cost of bringing a spouse, child, or anyone else along on a business trip is considered a personal expense and isn't deductible. But you may be able to deduct travel expenses for the individual if:

The person is an employee
They have a bona fide business purpose for traveling with you
They would otherwise be allowed to deduct travel expenses

You may be able to deduct the cost of a companion's travel if you can prove that the other person is employed by the business and is performing substantial business-related tasks while on the trip. This may include taking minutes at meetings or meeting with business clients.

Using Per Diems To Calculate Employee Travel Costs

The term "per diem" means "per day." Per diems are amounts that are considered reasonable for daily meals and miscellaneous expenses while traveling.

Per diem rates are set for U.S. and overseas travel, and the rates differ depending on the area. They're higher in larger U.S. cities than for sections of the country outside larger metropolitan areas. Companies can set their own per diem rates, but most businesses use the rates set by the U.S. government.

Per diem reimbursements aren't taxable unless they're greater than the maximum rate set by the General Service Administration. The excess is taxable to the employee.

If you don't spend all your time on business activities during an international trip, you can only deduct the business portion of getting to and from the destination. You must allocate costs between business and personal activities.

Your trip must be entirely business-related for you to take deductions for travel costs if you remain in the U.S., but some "incidental" personal time is okay. It would be incidental to the main purpose of your trip if you travel to Dallas for business and you spend an evening with family in the area while you're there.

But attempting to turn a personal trip into a business trip won't work unless the trip is substantially for business purposes. The IRS indicates that “the scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip."

The rules are different if part or all of your trip takes you outside the U.S. Your international travel may be considered business-related if you were outside the U.S. for more than a week and less than 25% of the time was spent on personal activities.

You can deduct the costs of your entire trip if it takes you outside the U.S. and you spend the entire time on business activities, but you must have "substantial control" over the itinerary. An employee traveling with you wouldn't have control over the trip, but you would as the business owner would.

The trip may be considered entirely for business if you spend less than 25% of the time on personal activities if your trip takes you outside the U.S. for more than a week.

You can only deduct the business portion of getting to and from the destination if you don't spend all your time on business activities during an international trip. You must allocate costs between your business and personal activities.

The Cost of a Cruise (Within Limits)

The cost of a cruise may be deductible up to the specified limit determined by the IRS, which is $2,000 per year as of 2022. You must be able to show that the cruise was directly related to a business event, such as a business meeting or board of directors meeting.

The IRS imposes specific additional strict requirements for deducting cruise travel as a business expense.

How do you write off business travel expenses?

Business travel expenses are entered on Schedule C if you're self-employed . The schedule is filed along with your Form 1040 tax return. It lists all your business income, then you can subtract the cost of your business travel and other business deductions you qualify for to arrive at your taxable income.

What are standard business travel expenses?

Standard business travel expenses include lodging, food, transportation costs , shipping of baggage and/or work items, laundry and dry cleaning, communication costs, and tips. But numerous rules apply so check with a tax professional before you claim them.

The Bottom Line

These tax deduction regulations are complicated, and there are many qualifications and exceptions. Consult with your tax and legal professionals before taking actions that could affect your business.

IRS. " Topic No. 511: Business Travel Expenses ."

IRS. " Publication 463 (2021), Travel, Gift, and Car Expenses ."

IRS. " Here’s What Taxpayers Need To Know About Business-Related Travel Deductions ."

Still need to file? An expert can help or do taxes for you with 100% accuracy. Get started

Tax Deductions for Business Travelers

When you are self-employed, you generally can deduct the ordinary and necessary expenses of traveling away from home for business from your income. But before you start listing travel deductions, make sure you understand what the Internal Revenue Service (IRS) means by "home," "business," and "ordinary and necessary expenses."

Ordinary vs. necessary expenses

Business home, not home sweet home, transportation expenses on a business trip are deductible, fees for getting around are deductible, lodging, meals and tips are deductible.

Key Takeaways

Typically, you can deduct travel expenses if they are ordinary (common and accepted in your industry) and necessary (helpful and appropriate for your business).
You can deduct business travel expenses when you are away from both your home and the location of your main place of business (tax home).
Deductible expenses include transportation, baggage fees, car rentals, taxis and shuttles, lodging, tips, and fees.
You can also deduct 50% of either the actual cost of meals or the standard meal allowance, which is based on the federal meals and incidental expense per diem rate.

The IRS defines expense ordinary and necessary expenses this way:

An expense is ordinary if it is common and accepted in your industry
An expense is necessary if it is helpful and appropriate for your business

You can claim business travel expenses when you're away from home but "home" doesn't always mean where your family lives. You also have a tax home—the city where your main place of business is located—which may not be the same as the location of your family home.

For example, if you live in Petaluma, California but your permanent work location is in San Jose where you stay in hotels and eat out during the work week, you typically can't deduct your expenses in San Jose or your transportation home on weekends.

In this situation San Jose is your tax home , so no deductions are permitted for ordinary and necessary expenses there.
Your trips to your home in Petaluma are not mandated by business.

Go by plane, train or bus—the actual cost of the ticket to ride is deductible, as well as any baggage fees. If you have to pay top dollar for a last-minute flight, the high-priced ticket is a business expense, but if you use frequent-flyer miles for a free ticket, the deduction is zero.

If you decide to rent a car to go on a business trip, the car rental is deductible. If you drive your own vehicle, you can usually take actual costs or the IRS standard mileage rate. For 2023 the rate is 65.5 cents per mile. You also can add tolls and parking costs onto your deduction. This amount increases to 67 cents per mile for 2024.

TurboTax Tip: Even if you use the federal meals and incidental expense per diem rates to calculate your deductions, be sure to keep receipts from all your meals and incidental expenses.

Fares for taxis or shuttles can be deducted as business travel expenses. For example, you can deduct the fare or other costs to go to:

Airport or train station
Hotel from the airport or train station
Between your hotel and the work location
Between clients in the area

If you rent a car when you arrive at your destination, the expense is deductible as long as the car is used exclusively for business. If you use it both for business and personal purposes, you can only deduct the portion of the rental used for business.

The IRS allows business travelers to deduct business-related meals and hotel costs, as long as they are reasonable considering the circumstances—not lavish or extravagant.

You would have to eat if you were home, so this might explain why the IRS limits meal deductions to 50% of either the:

Actual cost of the meal
Standard meal allowance

This allowance is based on the federal meals and incidental expense per diem rate that depends on where and when you travel.

Generally, you can deduct 50% of the cost of meals. Alternatively, if you do not incur any meal expenses nor claim the standard meal allowance, you can deduct the amount of $5 per day for incidental expenses. You can also deduct incidental expenses, such as:

Fees and tips given to hotel staff
Fees for porters and baggage carriers

But don't forget to keep track of the actual costs.

Let a local tax expert matched to your unique situation get your taxes done 100% right with TurboTax Live Full Service . Your expert will uncover industry-specific deductions for more tax breaks and file your taxes for you. Backed by our Full Service Guarantee . You can also file taxes on your own with TurboTax Premium . We’ll search over 500 deductions and credits so you don’t miss a thing.

Get unlimited advice, an expert final review and your maximum refund, guaranteed .

~37% of taxpayers qualify. Form 1040 + limited credits only .

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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

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Determining Tax Deductions for Travel Expenses + List of Deductions

Published August 15, 2023

Published Aug 15, 2023

WRITTEN BY: Tim Yoder, Ph.D., CPA

This article is part of a larger series on Accounting Software .

1. Determine Your Trip Meets the Requirements of a Business Trip
2. Check the List of Business Expenses That Qualify for Deductions
3. (For Those Mixing Business & Personal Travel): Allocate Expenses

Bottom Line

The IRS considers deductible travel expenses to be any ordinary and necessary expenses you incur while traveling away from home on business. To get tax deductions for travel expenses, the trip must have a business purpose and be temporary (less than one year) and you must be away from your tax home for a length of time that exceeds your usual work day or be away overnight to get sleep to fulfill the demands of your job while away.

Key Takeaways

A qualifying business trip must take you away from home overnight long enough to require rest.
Most expenses incurred during a qualifying business trip are deductible, including meals on days off.
Partnerships, limited liability companies (LLCs), and corporations can directly pay or reimburse employees for business travel expenses and deduct them from their business returns.
Self-employed business owners will deduct their travel expenses on Schedule C, while farmers will use Schedule F.
Purely personal expenses on business trips, such as sightseeing, are nondeductible.

Step 1: Determine Your Trip Meets the Requirements of a Business Trip

A business trip for tax purposes is one that meets the following criteria:

There must be a business purposes for the travel
You are required to be away from your tax home
The trip lasts overnight or a period long enough to require rest
The trip is temporary

Business Purpose

Your trip must be an ordinary and necessary part of conducting your business for your expenses to be deductible. Below are some reasons you may decide to travel for business:

Meeting with clients or customers: If you travel overnight to meet with clients or customers for business purposes, such as negotiating contracts, discussing projects, or providing consultations.
Attending business conferences or seminars: If you travel to attend conferences, seminars, or trade shows that are relevant to your business activities, including acquiring new industry knowledge or networking with other professionals.
Training or professional developmen t : If you travel to attend training programs, workshops, or courses directly related to your business or profession.
Conducting in-person meetings or negotiations: If you need to travel to have face-to-face meetings or negotiations with business partners, suppliers, or other stakeholders.

Your tax home is not your residence but rather your principal place of business activity including the entire city or general location of your business. So, your business trip cannot be in the general vicinity of your principal place of business for you to be away from home.

Amount of time you spend at each location
Degree of business activity in each area
Relative significance of the financial return from each area
No regular place of business: If, by the nature of the work, there is no regular or principal place of business, then your tax home will be the place where you regularly live and where you travel to different job sites to perform your service.

For example, a self-employed repair person may not have a regular place of business because they spend each workday at a different customer’s location.

Overnight Stay

Overnight stays for travel purposes do not specifically mean staying from evening to the next morning. Instead, overnight means that the trip is longer than a typical day’s work and long enough for you to require rest. Resting in your car is generally not enough, but if you have to get a hotel room, then the trip will qualify as overnight regardless of when you sleep.

Transportation vs travel expenses: Local transportation at your tax home can be deductible without an overnight stay—if there is a business reason for the transportation, such as driving from your office to visit a client. On a tangent, when you travel overnight, your transportation is deductible, and so are things like lodging, meals, and incidental expenses.

Temporary Travel

For purposes of business travel, a temporary stay is one that is expected to last for less than one year. Open-ended trips are not temporary.

However, say you initially anticipate that your trip will last less than one year, but it later becomes apparent that it will last more than one year. The trip is a deductible business trip up until the point in time it becomes apparent it will last more than one year.

The IRS will also consider a series of assignments to the same location, all for short periods, that together cover a long period to be an indefinite assignment. Any expenses you incur from this type of trip will not be deductible.

Step 2: Check the List of Business Expenses That Qualify for Deductions

Your travel expenses must be business-related—unless an exception applies—to qualify for a deduction. However, if you incur expenses that are purely for personal pleasure, they are nondeductible.

Here is a list of business travel expenses that can be deducted.

Round-trip Transportation To-and-From the Destination

Transportation for a round trip to and from your temporary work location is deductible—and it could be anything that gets you to the location, including via your personal car. If you use your personal car, your costs are calculated using either the actual expenses or the standard mileage rate .

In addition, you can deduct additional round trips to return to home when you are not working.

However, the deduction for the additional round trips is limited to the cost you would have incurred if you stayed at the temporary location. Those costs could include meals and lodging.

The business purpose of the meals is your business trip and are thus deductible—even if you eat alone.
Meals on days off qualify.
Travel to and from meals is deductible—even on your days off.
The meals do not have to have a specific business purpose, such as meeting with a client.
For longer trips, lodging can include monthly rentals.
If you return home on your days off but keep the lodging at your travel location, then the lodging is still deductible if it is ordinary and necessary. For instance, the monthly rent of an apartment at your travel location would be deductible even if you return home on the weekends.

Transportation at the Destination

Once you arrive at your destination, you may need additional transportation to get around town—and these costs are deductible. The only exception would be if you travel to the destination for a purely personal reason like sightseeing on your day off.

Incidentals

Incidental expenses are minor expenditures associated with business travel. You can deduct the actual cost of any one of the following expenses:

Shipping of baggage and sample or display material between your regular and temporary work locations
Business seminar and registration fees
Dry cleaning and laundry
Business calls include business communications by fax machine and other communication devices
Tips you pay for services related to any of these expenses
Parking, tolls, and fees
Any other similar ordinary and necessary expenses related to your business travel

Step 3 (For Those Mixing Business & Personal Travel): Allocate Expenses

When trips are both business and personal, the allocation of expenses varies based on the primary purpose of the trip. Determining the primary purpose of your journey requires you to evaluate the time spent on business vs personal activities.

Primarily Business Domestic Trips

If your trip is primarily for business purposes, then the round-trip transportation is 100% deductible and does not need to be allocated to the personal portion of your trip. However, all other expenses, like lodging and meals, must be allocated to personal expenses for days where there was no business reason for staying.

For example, if your seminar ends on Friday and you stay until Sunday, then the lodging and meals for Saturday and Sunday are nondeductible.

Primarily Personal Domestic Trips

If the primary purpose of your trip is personal, then none of the round-trip expenses are deductible. However, you can deduct the business portion of meals, lodging, and local transportation that was incurred for a business purpose.

Let’s say you stay a couple of days after your family vacation to meet with a client. The lodging and meals for those extra days are deductible.

Business Foreign Trips

The allocation of travel expenses on foreign trips is slightly different from the rules above. Round-trip transportation for foreign trips must be allocated to business and personal based on the number of business vs personal days on the trip. This is different from the “all or nothing” rule for the cost of domestic round-trip travel.

If your spouse joins you on a business trip, you usually cannot deduct any of their expenses. However, if your spouse’s trip satisfies a business purpose, then expenses must be otherwise deductible by the spouse.

Generally, for the travel costs of a spouse, dependent, or any other person to be tax-deductible, they must work for the business or be a co-owner.

Frequently Asked Questions (FAQs)

Are travel expenses tax deductible for business.

Yes, roundtrip travel is 100% tax deductible as long as the primary purpose of the trip is business. Once at your destination, expenses must be allocated between business and personal. However, all meals are deductible as long as the reason for your continued stay is business.

Can I deduct travel expenses for my employees?

Yes, you can generally deduct travel expenses for your employees as long as the expenses are ordinary and necessary, directly related to your business, and properly substantiated.

Is there a limit to the amount of travel expenses I can deduct?

Yes, there are some such as business travel on a cruise ship, where the expense is limited to $2,000 per year. Also, your expenses are limited to the non-lavish or extravagant cost of the trip, so you may want to be careful before booking a 5-star hotel.

Travel expenses are ordinary and necessary expenses you incur while you are temporarily away from home, so these expenses cannot be lavish in nature. To determine if a travel expense is deductible, it must be directly related to your trade or business.

When it comes to travel expenses, having well-organized records makes it much simpler to complete your tax return. Keep track of any records that may be used to substantiate a deduction, such as receipts, canceled checks, and other documentation.

About the Author

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Tim Yoder, Ph.D., CPA

Tim worked as a tax professional for BKD, LLP before returning to school and receiving his Ph.D. from Penn State. He then taught tax and accounting to undergraduate and graduate students as an assistant professor at both the University of Nebraska-Omaha and Mississippi State University. Tim is a Certified QuickBooks ProAdvisor as well as a CPA with 28 years of experience. He spent two years as the accountant at a commercial roofing company utilizing QuickBooks Desktop to compile financials, job cost, and run payroll. Tim has spent the past 4 years writing and reviewing content for Fit Small Business on accounting software, taxation, and bookkeeping.

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Credits and deductions
Business expenses

Can I deduct travel expenses?

If you’re self-employed or own a business , you can deduct work-related travel expenses, including vehicles, airfare, lodging, and meals. The expenses must be ordinary and necessary.

For vehicle expenses, you can choose between the standard mileage rate or the actual cost method where you track what you paid for gas and maintenance.

You can generally only claim 50% of the cost of your meals while on business-related travel away from your tax home, provided your trip requires an overnight stay. You can also deduct 50% of the cost of meals for entertaining clients (regardless of location), but due to the Tax Cuts and Jobs Act of 2017 (TCJA), you can no longer deduct entertainment expenses in tax years 2018 through 2025. In 2021 and 2022, the law allows a deduction for 100% of your cost of food and beverages that are provided by a restaurant, instead of the usual 50% deduction.

On the other hand, employees can no longer deduct out-of-pocket travel costs in tax years 2018 through 2025 per the TCJA (this does not apply to Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses). Prior to the tax rule change, employees could claim 50% of the cost of unreimbursed meals while on business-related travel away from their tax home if the trip required an overnight stay, as well as other unreimbursed job-related travel costs. These expenses were handled as a 2% miscellaneous itemized deduction.

Related Information:

Can I deduct medical mileage and travel?
Can I deduct my moving expenses?
Can I deduct rent?
Can I deduct mileage?
Can employees deduct commuting expenses like gas, mileage, fares, and tolls?

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How to find deductions for travel expenses

With more consultants and business travelers hitting the road for business travel, it's time for a brush-up on what expenses are eligible for tax deduction while they're away. If you're unsure about what qualifies, read on.

Find out more about Business Taxes

by Grace L. Williams

Grace L. Williams is a journalist. Her areas of expertise include small business, career, personal finance, and inve...

Key takeaways

What is business travel or a business trip, what is a business-related travel expense, what business travel expenses are tax deductible, are there other tax deductions for travel expenses, tracking expenses on your business trip, importance of documentation, combining business and personal travel, special considerations for self-employed individuals, getting help with tax deductions for travel expenses, frequently asked questions.

Business travel is back after the pandemic, and with that increase comes the age-old question every business traveler must ask at least once: "What can I deduct as a business expense while I'm on the road?"

You've likely heard the term "write-off" somewhere and may have used it somewhere within your business circles. But what exactly is it? You might wonder if you can book first-class travel or five-star lodging and eat in fancy dining establishments and then submit them as business write-offs. The short, overarching rule for those specifics is no, you probably cannot, but there is more to eligible business travel expenses than that.

A man looks at his cell phone while boarding a flight for business travel. Business travel deductions fall into three categories: costs related to how you will get to your destination (travel), where you will stay (lodging), and what you will eat and drink when you are there and in transit..

So before you book travel arrangements on your credit card (hopefully a designated business credit card), read on for more information about making expensing your business travel less stressful.

Understand IRS guidelines for deductible travel expenses to maximize tax savings.
Proper documentation is essential for claiming deductions, including meals and entertainment, with a clear business justification.
Utilize tax professionals and leverage technology to ensure accurate deductions, compliance with laws, and maximum savings on travel expense deductions.

A woman in a window seat on an airplane checks her phone during a business trip. business travel or a business trip is defined as any travel conducted that is business-related.

Simply put, business travel or a business trip is defined as any travel conducted that is business-related. To be considered eligible as a business trip, the travel itself must meet the following criteria:

The trip must be conducted for legitimate business purposes, not as leisure time, vacation, or personal purposes.
The trip must occur outside the bounds of a regular commute to and from work (or the main place of business) and home.

If the trip meets these criteria, it falls under the category of a business trip. It also means that you can deduct travel expenses whether you are a business owner sending an employee on your behalf or a self-employed individual.

To better understand business-related travel expenses, it's a good idea to look at overall business expenses. A business expense is incurred as part of the regular day-to-day operations of your employer (or for you if you are a self-employed individual) to conduct the business. Under current Internal Revenue Service (IRS) laws, special rules allow portions of business expenses to be deducted from the overall business income. These expenses are considered tax deductible, which means they are applied before any taxes are. The umbrella term "write-off" comes from this business tax deduction category.

In business, eligible tax deductions can have a significant impact. Being able to deduct expenses can often reduce the total overall taxable income . Cumulatively, tax-deductible expenses will likely reduce the total bill when it is time to file your tax return.

A deductible business travel expense is one that you or an employee incur during travel directly related to conducting business. In both instances (a business expense or a business travel expense), it is essential to ensure the expense falls under the category of being for bona fide business purposes. This means that deducting the travel expenses must be something genuinely related to conducting or doing a bona fide business purpose. If it is, its cost can be written off as part of business or business travel-related expenses. It applies to self-employed individuals or employees traveling for an employer or business owner.

So what exactly can you expense?

A man works on his laptop in an airport while waiting for his flight to board. In order to legally deduct business travel, specific criteria must be met.

First and foremost, consider the basics, or the "Big 3" in business travel. Essentials here include these three actual expenses: costs related to how you will get to your destination (travel), where you will stay (lodging), and what you will eat and drink when you are there and in transit. Each category within the Big Three can be an eligible travel expense and, therefore, a tax write-off, but they come with some criteria worth exploring.

Transportation expenses: If you plan to travel by car, and you will either use a vehicle you lease long-term or your car, there are two choices related to how this mode of transportation might be expensed. One choice is known as the “ standard mileage rate ." Under current IRS allowances, the standard mileage rate deduction for self-employed individuals and employees is 65.5 cents per mile for business-related travel. The rate per mile would apply to any driving conducted to or from the business destination. It would also apply to any driving conducted while you are at the destination if it is business-related. For instance, once at the destination, if driving must be done to run errands, those miles can be added to the total mileage count.

The other vehicle expense option for a business trip is to itemize the individual expenses. Eligible business costs, in this instance, include the lease, insurance, fuel, costs related to the upkeep and maintenance of the vehicle, such as oil changes or tune-ups, and any major repairs on the vehicle, such as fixing a flat tire.

If you are renting a car as part of your transportation expenses and it falls under the ordinary and necessary business travel expense category, the cost to rent a car would qualify as an eligible business expense. Other vehicle-related expenses that qualify for travel deductions include tolls and parking fees.

Actual expenses method

The actual expenses method involves calculating the total cost of vehicle use and multiplying it by the percentage used for business purposes. This includes:

Depreciation
Garage rent
Vehicle registration fees
Lease payments

To calculate the percentage of business use, divide the total business miles driven by the total miles driven in the year. While this method can lead to larger deductions, it requires detailed record-keeping and more complex calculations than the standard mileage method.

Standard mileage rate

The standard mileage rate allows you to claim a fixed rate per mile driven for business purposes, plus parking fees and tolls. The standard mileage rate for business in the United States is 65.5 cents per mile. The IRS determines This rate annually based on a study of the fixed and variable costs of operating a vehicle for business reasons, such as gas, maintenance, and depreciation.

This method can be used for self-employment, business-related travel, or when using a vehicle for work as an independent contractor. However, personal use of the vehicle is not eligible for this deduction.

Ticketed travel: For ticketed travel, like flights or trips by train, the cost of your ticket can be expensed as a travel deduction if your class fare qualifies as an eligible and reasonable expense. This means that while you likely won't be able to deduct first-class fare, you can deduct what is known as the ordinary and necessary expense related to the fare, which covers classes such as economy. You can also expense costs incurred while en route, such as baggage fees. And, if you are waiting at an airport or train station, any meal costs, snacks, or drinks would also qualify as business-related expenses.

Meal expenses and entertainment: Business meals cut eligible business expenses but with some stipulations, including the standard meal allowance. While current IRS laws permit for up to 50% of a business meal to be deducted, like ticketed travel, rental cars, and other business-travel-related costs, the meal must fall under an ordinary and necessary expense to be eligible as a tax-deductible business expense. If you are tempted to go all out and splurge on your dining, you might find that it is not an eligible business travel expense.

But changes have been made to the entertainment category. While entertainment used to be an allowed business expense, it is sometimes no longer eligible to claim tax deductions. This means that if you expect to take clients out as part of client meetings or conduct business, be sure to read the fine print since you might discover you cannot claim entertainment as a legitimate business expense.

Lodging expenses: Business travelers must consider where they will sleep while away. To be considered eligible as a business expense, the location of your stay must be outside of the main place of business and require overnight accommodation. Notably, in this expense category, IRS rules stipulate that for it to be an eligible business expense, the lodging cannot fall into the extravagant or considered recreational category.

Remember: With each of the "Big 3" and all other related business expenses to be deducted, the expenses must be ordinary and fall under the category of reasonable business expenses. If you opt for pricey vehicles, tickets, meals, and rooms instead of the available moderately-priced alternatives, you risk losing eligibility as legitimate business expenses.

There are some other expenses anyone traveling for business should consider submitting as tax-deductible expenses.

Event fees: These could come into play if you travel to an event such as a conference, convention, or trade show. In addition to the Big 3, certain expenses related to attending these events would qualify as eligible business travel expenses. The expenses are deductible if the event has an entry or booth fee. While you are there, if you attend workshops, lectures, or courses that require materials such as a workbook or registration, these would also be eligible as tax-deductible travel expenses. And, if you are running a booth or table at an event and need materials or supplies, the cost to purchase them would also qualify as legitimate business expenses.

Incidental expenses: Any reasonable additional expenses you incur while traveling for a business activity can be considered incidental expenses. For instance, if you incur expenses on ground transportation, a rideshare fee, taxi fare, or a subway ticket qualify as business expenses. Laundry and dry cleaning services are also eligible business activities. In addition, indirect expenses like office supplies can be eligible business expenses.

Organization before, during, and after the business trip will help you avoid potential pitfalls or headaches when filing expenses or taxes. From the outset, one great way to separate your business trips and expenses from personal expenses is to have a single credit or debit card that you designate for business use only. This de facto "corporate" card will come in handy and be a best friend on the road since it automatically creates a tally of itemized expenses courtesy of the real-time accounting and monthly statements that come with it.

Beyond the lone card designated for business expenses, your meticulous record-keeping will greatly help you when it's time to account for everything. If you don't want to use a third-party software program or expense-tracking app to track your expenses, a simple solution is to use a basic spreadsheet that tracks the date, the reason for the expense, and the cost. To set this up, once you have incurred an expense, note it down using the aforementioned basic information.

While on the trip, another simple organizational tool is keeping all receipts and other applicable hard-copy records and materials in one designated place. A pouch or envelope will work fine as the place to keep these items. Make sure you read the receipt or record, and if it does not have information such as the name and address of the business, write it on the back before you stash it away. Finally, if a receipt is for something like a business lunch, ensure the date and information about the place of business are on the receipt. Then, write the name of the person you shared your time with and the reason for meeting up somewhere on the receipt.

Claiming travel expense deductions requires proper documentation. This includes retaining receipts and records for all expenses incurred during your business trip. For meals and entertainment expenses, you'll need to note the nature of the meeting, including who you met with, when, and the topics discussed.

It's worth noting that lodging expenses on non-business days may still be eligible for deductions if specific strategies are employed, such as incorporating “vacation days" between workdays. In such cases, the total cost of lodging for the trip can still be tax deductible even when no work is taking place on the weekend. However, meals and entertainment expenses without a clear business justification won't be deductible and must be paid personally.

A man and woman enjoy fall foliage after a business trip to the Northeast U.S. The non-business portion of business travel expenses may be viewed as taxable income if paid by the individual or company.

Allocating expenses between business and personal activities is essential to ensure accurate deduction claims. Expenses must be allocated based on actual usage, so the non-business portion of the expenses may be viewed as taxable income if paid by the individual or company.

To accurately allocate expenses between business and personal activities for tax deductions, follow these steps:

Track usage for a period of time.
Determine the allocation by proportionally dividing the expenses based on the amount of business and personal use.
Maintain proper records to support the allocation.

When combining business and personal travel, careful allocation of expenses and adherence to specific rules is important. Expenses related to the personal nature of the trip cannot be deducted; only those incurred for business purposes can be.

If traveling abroad, you must spend a minimum of 25% of your time conducting business to qualify as a business trip and claim travel expense deductions. If you conduct business for less than 25% of the time while on a trip, you can still deduct travel costs. This deduction must be proportional to the amount of time spent on business.

Rules for international travel

International travel has additional rules to consider when claiming travel expense deductions. As mentioned, you must spend at least 25% of your time abroad conducting business to claim travel-expense deductions.

If you use 25% or less of your trip for business purposes, you can deduct related travel costs in proportion to the time spent on work. This can help to make international business trips more affordable. For example, if 40% of your time is spent on business activities, you can claim the entire cost of airfare as a business expense.

Self-employed individuals should be aware of special considerations when deducting travel expenses, such as home office deductions and computer rental fees. Understanding these unique aspects can help self-employed individuals maximize their tax savings and ensure compliance with tax laws, especially regarding their tax home.

Home office considerations

Home office deductions can be claimed if the office is the primary place of business and is regularly used for business purposes. The IRS has specific guidelines for the regular use of a home office for business purposes, such as the office being used exclusively and regularly for business purposes.

To claim a home office deduction, you can use the simplified method the IRS provides. Here's how it works:

Multiply the allowable square footage of your home office by the prescribed rate of $5 per square foot.
The maximum allowable square footage is 300 square feet, so the maximum deduction you can claim using this method is $1,500 annually.
The simplified option allows for a standard deduction without the need for detailed record-keeping.

Deducting computer rental fees

Computer rental fees can be deducted if the equipment is used for business during the trip. The full cost of the computer rental may be deducted as a business expense.

To claim a deduction for computer rental fees from business travel expenses, you must provide relevant documentation demonstrating the rental fees paid, such as receipts or invoices. Proper record-keeping is essential to support your deduction and ensure compliance with IRS regulations.

Leveraging technology

Technology, such as expense tracking apps and online bookkeeping services, can simplify record-keeping and documentation for travel expense deductions. These tools can help you track and categorize expenses, making it easier to identify and compute deductible expenses for tax purposes.

Expense tracking applications can:

Generate reports and summaries of travel expenses
Be beneficial for tax filing and auditing purposes
Save time and effort in tracking and documenting your travel expenses
Ensure accurate deductions and compliance with tax laws

Leveraging technology in expense tracking can be a valuable tool for managing your finances.

Sometimes, you might need more help. This guide provides basic questions about business travel deductions and expenses. Still, you are not alone if you have other questions about what might qualify as a tax-deductible business expense. There are experts at LegalZoom who can answer specific questions and better advise you about both business expenses and business travel-related expenses.

You might have questions about whether specific costs related to your business qualify as ordinary and necessary expenses or wonder if percentages of a certain expense or the entire cost can be completely deductible. Additionally, professionals in the know about things like a specific tax home can help you sort out concerns related to your business so that you can always claim the proper travel expenses. For any consultant looking to get back into the swing of travel, help and practical tips are just a click away.

Understanding and maximizing travel expense deductions can save you significant money on your tax return. By familiarizing yourself with the requirements, maintaining proper documentation, and leveraging the expertise of tax professionals and technology, you can ensure accurate deductions, compliance with tax laws, and, ultimately, keep more money in your pocket.

What kind of travel expenses are tax deductible?

Tax deductible travel expenses include airfare, train/bus fares, taxi rides between an airport or station and a hotel, or from the hotel to a work location.

What are the three requirements for a traveling expense deduction?

To qualify for a traveling expense deduction, you must have a “business trip," leave your tax home, have most of the trip business-related, and plan the trip in advance.

How do I prove travel expenses for taxes?

To prove business travel expenses for taxes, use credit card slips with notes on the business purpose made at the time of incurring the expense.

Are daily travel expenses tax deductible?

Daily travel expenses from your home to a regular place of business are not tax deductible. However, you can deduct transport expenses when traveling between your home and a temporary work location outside the metropolitan area where you live and normally work. Additionally, ordinary and necessary travel expenses incurred while away from your home and your main place of business can be deducted.

How do I allocate expenses between business and personal activities during a combined trip?

Allocate expenses proportionally based on the amount of business and personal use for a period of time, and maintain proper records to support deductions.

What Are Travel Expenses?

Understanding travel expenses, the bottom line.

Deductions & Credits
Tax Deductions

Travel Expenses Definition and Tax Deductible Categories

Michelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.

For tax purposes, travel expenses are costs associated with traveling to conduct business-related activities. Reasonable travel expenses can generally be deducted from taxable income by a company when its employees incur costs while traveling away from home specifically for business. That business can include conferences or meetings.

Key Takeaways

Travel expenses are tax-deductible only if they were incurred to conduct business-related activities.
Only ordinary and necessary travel expenses are deductible; expenses that are deemed unreasonable, lavish, or extravagant are not deductible.
The IRS considers employees to be traveling if their business obligations require them to be away from their "tax home” substantially longer than an ordinary day's work.
Examples of deductible travel expenses include airfare, lodging, transportation services, meals and tips, and the use of communications devices.

Travel expenses incurred while on an indefinite work assignment that lasts more than one year are not deductible for tax purposes.

The Internal Revenue Service (IRS) considers employees to be traveling if their business obligations require them to be away from their "tax home" (the area where their main place of business is located) for substantially longer than an ordinary workday, and they need to get sleep or rest to meet the demands of their work while away.

Well-organized records—such as receipts, canceled checks, and other documents that support a deduction—can help you get reimbursed by your employer and can help your employer prepare tax returns. Examples of travel expenses can include:

Airfare and lodging for the express purpose of conducting business away from home
Transportation services such as taxis, buses, or trains to the airport or to and around the travel destination
The cost of meals and tips, dry cleaning service for clothes, and the cost of business calls during business travel
The cost of computer rental and other communications devices while on the business trip

Travel expenses do not include regular commuting costs.

Individual wage earners can no longer deduct unreimbursed business expenses. That deduction was one of many eliminated by the Tax Cuts and Jobs Act of 2017.

While many travel expenses can be deducted by businesses, those that are deemed unreasonable, lavish, or extravagant, or expenditures for personal purposes, may be excluded.

Types of Travel Expenses

Types of travel expenses can include:

Personal vehicle expenses
Taxi or rideshare expenses
Airfare, train fare, or ferry fees
Laundry and dry cleaning
Business meals
Business calls
Shipment costs for work-related materials
Some equipment rentals, such as computers or trailers

The use of a personal vehicle in conjunction with a business trip, including actual mileage, tolls, and parking fees, can be included as a travel expense. The cost of using rental vehicles can also be counted as a travel expense, though only for the business-use portion of the trip. For instance, if in the course of a business trip, you visited a family member or acquaintance, the cost of driving from the hotel to visit them would not qualify for travel expense deductions .

The IRS allows other types of ordinary and necessary expenses to be treated as related to business travel for deduction purposes. Such expenses can include transport to and from a business meal, the hiring of a public stenographer, payment for computer rental fees related to the trip, and the shipment of luggage and display materials used for business presentations.

Travel expenses can also include operating and maintaining a house trailer as part of the business trip.

Can I Deduct My Business Travel Expenses?

Business travel expenses can no longer be deducted by individuals.

If you are self-employed or operate your own business, you can deduct those "ordinary and necessary" business expenses from your return.

If you work for a company and are reimbursed for the costs of your business travel , your employer will deduct those costs at tax time.

Do I Need Receipts for Travel Expenses?

Yes. Whether you're an employee claiming reimbursement from an employer or a business owner claiming a tax deduction, you need to prepare to prove your expenditures. Keep a running log of your expenses and file away the receipts as backup.

What Are Reasonable Travel Expenses?

Reasonable travel expenses, from the viewpoint of an employer or the IRS, would include transportation to and from the business destination, accommodation costs, and meal costs. Certainly, business supplies and equipment necessary to do the job away from home are reasonable. Taxis or Ubers taken during the business trip are reasonable.

Unreasonable is a judgment call. The boss or the IRS might well frown upon a bill for a hotel suite instead of a room, or a sports car rental instead of a sedan.

Individual taxpayers need no longer fret over recordkeeping for unreimbursed travel expenses. They're no longer tax deductible by individuals, at least until 2025 when the provisions in the latest tax reform package are due to expire or be extended.

If you are self-employed or own your own business, you should keep records of your business travel expenses so that you can deduct them properly.

Internal Revenue Service. " Topic No. 511, Business Travel Expenses ."

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 13.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Page 7.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Pages 6-7, 13-14.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 4.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Pages 5, 7.

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No Receipt Tax Write Off: Maximizing Deductions Without Proof

Banking & Finance
Bookkeeping
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When it comes to filing taxes, many taxpayers may wonder about the possibility of claiming tax deductions without having receipts to back them up. While it’s generally advised to maintain detailed records of all expenses, including receipts, there are specific cases where the IRS does allow certain tax write-offs without receipts. This article will explore what these tax deductions entail and how taxpayers can take advantage of these opportunities without risking an audit.

Understanding tax deductions without receipts is crucial to ensuring that you’re maximizing your potential savings while remaining compliant with IRS regulations. Eligible expenses for non-receipt write-offs, record keeping strategies, and guidelines for such deductions will be analyzed to provide a comprehensive framework for navigating these complex tax requirements.

Key Takeaways

Certain tax deductions can be claimed without receipts, but it’s essential to understand the IRS guidelines and eligible expenses.
Good record keeping for no-receipt deductions helps taxpayers stay organized and defend their claims in case of an audit.
Working with tax professionals can further optimize deductions without receipts and ensure compliance with IRS regulations.

Understanding Tax Deductions without Receipts

The cohan rule.

The Cohan Rule , named after the Broadway producer George M. Cohan, is an important aspect to understand when discussing tax deductions without receipts. It states that if a taxpayer can reasonably prove they incurred an expense but lack the receipts to substantiate the exact amount, the IRS may still allow an estimate of the deduction. This rule is based on a legal precedent set by Cohan’s own case against the IRS in the 1930s.

While the Cohan Rule may help in certain situations, it is always best practice to keep receipts and detailed records of all expenses. Relying solely on the Cohan Rule can lead to a higher risk of an IRS audit.

IRS Guidelines for Deductions

The IRS has specific guidelines regarding what expenses can be deducted and under what circumstances. Some common tax write-offs that may be claimed without receipts, or with alternative forms of documentation, include:

Mileage deductions: If you use your vehicle for business purposes, you can claim a deduction based on the mileage driven for work-related tasks. It is recommended to keep a mileage log to support your claim, even if you do not have all the receipts.
Home office deductions: If you use a portion of your home exclusively for business, you may be eligible for a home office deduction. Keep records of your home’s square footage and the space utilized for business purposes to help support your claim.
Charitable contributions: Donations to qualified charitable organizations are deductible as long as they are not overly inflated in value. It is always wise to retain documentation such as a letter from the organization acknowledging the donation, especially for larger contributions.

It is crucial to stay informed about the IRS’ rules and guidelines regarding deductions to ensure that you maximize your tax savings while remaining compliant. Overall, the best practice is to always retain receipts and maintain accurate records for all your expenses.

Eligible Expenses for Non-Receipt Write-offs

Common non-receipt deductions.

There are several deductions that individuals and businesses can claim without necessarily needing a receipt. These deductions can include:

Home Office Expenses : Some taxpayers can deduct a portion of their home expenses if they use a dedicated space within their home for business purposes. These expenses may include rent, utilities, and mortgage interest.
Mileage : If you use your personal vehicle for work-related travel, you may claim a standard mileage rate for business miles driven. However, it is essential to maintain a log of the miles driven for business purposes to support your claim.
Out-of-Pocket Charitable Deductions : If you made small cash donations or purchased items for a charity, you might not have a receipt. These out-of-pocket expenses can still be deductible as long as you maintain adequate records of the transactions.

Business and Professional Expenses

When it comes to business and professional expenses, there are also some eligible write-offs that can be claimed without necessarily having a receipt:

Subscriptions and Memberships : For professionals and businesses, annual fees for professional organizations, journals, and magazines related to their trade can be deducted without a receipt. However, maintaining a record of these expenses is best practice.
Office Supplies : Small purchases like pens or paper might not have a receipt, but they can still be claimed as deductions on your tax return. It is important to keep a log of these expenses and attempt to substantiate them through bank statements or credit card statements.
Travel Expenses : If you incur parking fees or toll charges during business travel, these expenses can be deductible even without a receipt. It is essential to document each trip’s purpose, date, and the amount spent.

While receipts are an ideal way to substantiate deductions and make the audit process smoother, there are instances where taxpayers can make valid claims without receipts. Ensuring that proper documentation is maintained for all deductions, receipt or not, will help taxpayers stay compliant and maximize their savings in tax returns.

Record Keeping for No-Receipt Deductions

Substitutes for receipts.

In the event that an individual lacks physical receipts for tax deductions, there are alternative forms of documentation that may be used to substantiate the deductions. It is important to gather and maintain comprehensive records to support claims, in case of an IRS audit.

Credit card and bank statements: These can serve as proof for expenses when receipts are unavailable. These statements usually contain details such as the date, the name of the vendor, and the amount paid.
Mileage log: For vehicle-related deductions, keeping an accurate mileage log is crucial. The log should include the date, starting and ending locations, the purpose of the trip, and the number of miles driven.
Expense reports: If applicable, submitting expense reports for work can also serve as a substitute for receipts.

Digital Record Keeping Solutions

In today’s digital age, various software solutions facilitate more efficient and organized record keeping. These tools can help store, categorize, and easily retrieve expense information.

Mobile apps: There are numerous apps available that enable users to track expenses, mileage, and even scan receipts for safekeeping. Examples of such apps include Expensify and MileIQ.
Accounting software: Investing in accounting software such as QuickBooks or FreshBooks can help individuals and businesses manage expenses and deductions more comprehensively. These programs often integrate with other financial tools like bank accounts or credit cards, automatically importing transactions and simplifying record-keeping.
Cloud storage: Storing digital receipts and financial records securely on a cloud-based platform, like Google Drive or Dropbox, helps prevent data loss and makes it easier to access information from any location.

In conclusion, when physical receipts are unavailable, there are still several options to substantiate deductions. Leveraging modern technology and digital solutions for record keeping can not only provide peace of mind but also improve financial organization, making tax season a smoother process.

Maximizing Deductions Without Receipts

Strategies for self-employed individuals.

For self-employed individuals, it’s essential to make the most of available tax deductions to maximize income. One way to do this is by claiming tax deductions without receipts. The $75 rule, as stated in IRS Publication 463, allows business owners to deduct expenses under $75 related to:

Entertainment
Vehicle expenses¹

However, even though they are travel-related, lodging expenses require receipts as a special case.

Another common tax deduction taken without receipts is home office expenses. If you use your home as an office, you can deduct a portion of the rent, utilities, and property taxes as a business expense, provided there are certain requirements you meet.

Importance of Accurate Estimates

When it comes to claiming tax deductions without receipts, providing accurate estimates becomes crucial. While the IRS allows for certain deductions without receipts, it’s still vital to maintain accurate records.

To ensure proper record-keeping, consider the following tips:

Maintain a separate bank or credit card account for business-related expenses. This will make it easier to review transactions and estimate costs when the time comes to file taxes.
Use digital record-keeping systems to quickly capture and store expense information. Many apps and software programs are available to help track expenses and categorize them appropriately.
Consistently review and update financial records. Regularly monitoring your records will help prevent discrepancies and enable more accurate estimates of deductible expenses.

In conclusion, for self-employed individuals, maximizing income through strategic tax deductions without receipts can be highly beneficial. By following the guidelines provided by the IRS and maintaining accurate records, taxpayers can make the most of these opportunities while staying compliant with tax regulations.

Risks and Consequences of No-Receipt Claims

Chances of being audited.

The Internal Revenue Service (IRS) audits tax returns based on random selection and computer screening. When a tax return deviates from the norm, it increases the chances of being audited. Although the probability of being audited is relatively low, it is crucial for taxpayers to maintain accurate records and receipts to reduce the chances of coming under scrutiny.

Keep records : Retaining proper documentation makes the audit process smoother when substantiating deductions during an IRS audit.
Avoid red flags : File an accurate and complete tax return, without exaggeration or omissions.
Be detailed : Maintain clear logbooks or diaries for specific deductible expenses like charitable donations or gambling losses.

Penalties for Inaccurate Deductions

It is necessary to understand the potential repercussions of faulty tax deductions made without appropriate receipts or documentation. Some penalties for inaccurate tax deductions may include:

Disallowed deductions : The IRS may disallow claimed deductions if taxpayers fail to provide adequate proof of their expenses. This could lead to increased tax liability and adjustments to the reported income or deductions.
Interest charges : If disallowed deductions increase the amount of tax owed, interest charges will be levied on the additional tax due.
Penalties : Taxpayers who make inaccurate or fraudulent tax deductions can face penalties ranging from 20% to 75% of the underpayment amount.

In conclusion, it’s essential to maintain accurate records, documentation, and receipts of all deductible expenses. Claiming deductions without sufficient evidence may result in penalties, disallowed deductions, and increased tax liability. It’s always better to err on the side of caution and maintain thorough documentation for any potential tax write-offs.

IRS Allowances for Specific No-Receipt Deductions

Standard mileage rates and home office deductions.

The IRS allows taxpayers to claim certain deductions without receipts for specific categories such as Standard Mileage Rates and Home Office Deductions . When using a vehicle for business purposes, taxpayers can claim a standard mileage rate deduction without receipts. Instead, they must maintain a mileage log that documents the date, starting and ending locations, the purpose of the trip, and the number of miles driven. As of 2024, the standard mileage rate is $0.655 per mile.

For home office deductions, the IRS offers a simplified option . The simplified method allows taxpayers to deduct $5 per square foot (up to 300 square feet) without the need to substantiate expenses with receipts. However, to be eligible for the home office deduction, the space must be used regularly and exclusively for business purposes.

Charitable Contributions and Medical Expenses

In case of Charitable Contributions , the IRS allows specific deductions without receipts under certain circumstances. For donations under $250, taxpayers can provide alternative documentation such as canceled checks, bank statements, or credit card statements to substantiate the contribution. For donations of $250 or more, it’s essential to obtain a written acknowledgment from the charity confirming the contribution.

For Medical Expenses , the IRS generally requires receipts to claim deductions. However, there are some exceptions. If recordkeeping is challenging or impossible, individuals can use estimations for certain medical costs, such as dental treatments or medical mileage, provided they can justify these estimates with reasonable explanations. It is important to note that estimated expenses should not be exaggerated, and taxpayers should make their best attempt to provide accurate figures.

In conclusion, while the IRS requires receipts for most deductions, there are specific situations and categories for which they allow alternative documentation or estimations. Taxpayers should be aware of these allowances and maintain accurate records to support their claims.

Working with Tax Professionals

Benefits of consulting a tax expert.

Working with tax professionals, such as accountants or tax advisors, can provide significant advantages when claiming deductions without receipts. These experts have in-depth knowledge of tax regulations and can help ensure that taxpayers properly comply with IRS rules.

Tax professionals can:

Help identify deductible expenses without receipts
Provide guidance on the documentation required for each deduction
Minimize the risk of an audit by ensuring proper compliance
Offer tailored advice based on an individual’s unique financial situation

Selecting the Right Tax Software for Your Needs

In addition to consulting with a tax professional, using tax software can further simplify the process of claiming deductions without receipts. It’s essential to select software that is both user-friendly and sufficient for individual needs.

When choosing tax software, consider the following factors:

Features : Look for software that includes support for deductions without receipts and enables users to categorize and track expenses.
Ease of use : The user interface should be clear and straightforward, making it easy for users to navigate and input information.
Customer support : Ensure the software provider offers reliable customer support should any questions or issues arise.
Price : Compare the costs of various tax software options, balancing affordability with features and support.

By working with tax professionals and selecting the right tax software, individuals can confidently claim deductions without receipts while complying with IRS regulations.

Frequently Asked Questions

What are the allowable itemizations for individuals without a receipt.

Individuals can claim some tax deductions without needing a receipt. For instance, IRS Publication 463 allows business owners to deduct expenses under $75 related to travel, entertainment, gifts, and vehicle expenses, except lodging. However, it is essential to maintain proper records and justify the expenses if the IRS asks for verification.

How can self-employed individuals write off expenses without receipts?

In the absence of receipts, self-employed individuals can rely on the Cohan rule, which enables taxpayers to demonstrate that their expenses were spent on business operations using alternative documentation. Keeping meticulous logs, calendars, or bank statements showing the expenses, and maintaining a consistent expense reporting system can help provide the necessary evidence.

What is the maximum amount you can claim for donations without providing a receipt?

For charitable donations, you can claim up to $250 without needing a receipt. However, for donations above this amount, you must provide a written acknowledgment from the charitable organization. The acknowledgment should include the organization’s name, the date and amount of the donation, and whether any goods or services were provided in return.

Which tax deductions are often missed or overlooked?

Some commonly overlooked tax deductions include:

Home office expenses for self-employed individuals
Health Savings Account (HSA) contributions
Moving expenses for active-duty military personnel
Student loan interest paid by parents on behalf of their children

Always consult a tax professional to identify the deductions you may be eligible for but haven’t claimed yet.

What are the consequences of filing taxes without all expense receipts?

Filing taxes without all expense receipts can lead to trouble if the IRS decides to audit your return. If you are unable to provide the necessary documentation for your claimed deductions, the IRS may disallow the deductions, which could result in additional taxes, interest, and penalties.

Can you claim standard deductions if you have no proof of certain expenses?

Yes, standard deductions are available to all taxpayers who choose not to itemize their deductions. The standard deduction is a fixed amount that reduces your taxable income. Claiming the standard deduction doesn’t require proof of specific expenses and is separate from itemized deductions requiring receipts.

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What are the mileage tax deduction rules?

The mileage tax deduction rules generally allow you to claim $0.655 per mile in 2023 if you are self-employed. You may also be able to claim a tax deduction for mileage in a few other specific circumstances, including if you’re an armed forces reservist, qualified performance artist or traveling for charity work or medical reasons.

What are the mileage deduction rules, driving with navigation.

There’s a lot to unpack when talking about claiming mileage on your taxes. In this article, we’ll outline who can take a tax deduction for mileage, how to take the deduction, and other things you should consider.

If you use you your vehicle for business purposes, you should know that claiming mileage is one of two ways of claiming a tax benefit for car-related costs. The “actual car expense” method is the other way; it lets you claim a deduction for car insurance , deductible car repairs , among other costs.

Do you need help with mileage deductions on your taxes and other deduction possibilities? Check out our Guide to Gig Worker Taxes .

Who can take a tax deduction for mileage?

Before the Tax Cut and Jobs Act (TCJA) of 2017, employees were able to claim a tax deduction for mileage and other expenses that were not reimbursed by their employer. However, the TCJA suspended the deduction for employee business expenses, changing the mileage deduction rules so that most employees can no longer deduct mileage and other unreimbursed expenses.

Here’s who may still claim mileage on taxes:

Small business owners. Self-employed taxpayers who file Schedule C or Schedule F.
Other self-employed workers. This includes independent contractors, such as drivers for rideshare services.
Certain types of employees. Specifically, qualified performing artists, reservists in the armed forces, and fee-based government officials are eligible to claim mileage
Individuals traveling for volunteer work or for medical appointments.

File with H&R Block to get your max refund

Claiming mileage on your taxes.

How you deduct mileage for your taxes depends on your situation. So, if you’re claiming mileage as a medical or charitable expense, you won’t do it the same way as a business expense. The forms you use and the amounts you can deduct per mile will vary.

How to deduct mileage for taxes for the self employed

Self-employed individuals will report their mileage on the Schedule C form. In addition to providing the number of miles driven during the tax year, you’ll also need to answer a few questions about the vehicle, including when it was placed into service for business.

As mentioned above, the mileage rate for business owners and other self-employed workers is $0.655 in 2023.

If you’re not sure what to include as your business mileage, you’re not alone. We often get this question: “Can I deduct mileage to and from work?” The answer here is no; you’d just count the trips after arriving at work or first business destination.

For business owners, the trip from home to your main business location, such as an office or store, is not deductible. Trips driven from there to other business locations, such as to call on clients, and from your last stop back to your main place of business are deductible.

For rideshare drivers, such as Uber or Lyft, this means the drive from home to pick up the first passenger and the drive home after the last drop off are not deductible. Only the trips driven between the first business stop and the subsequent stops can be used for claiming mileage on your taxes.

Note: if your home office is your main business location, then trips from home to other business locations are deductible.

How to calculate mileage for certain employees

If you’re one of the types of employees listed above, you’ll also be able to claim mileage on your individual tax return at the rate of $0.655 in 2023. You’ll report your miles and also answer a few questions about the vehicle on Form 2106 .

Employees must follow the same rules that business owners and other self-employed workers follow. That is, commuting expenses – trips from home to your first destination – are not deductible. See IRS Publication 463 for more information.

How to deduct mileage for taxes in other situations

You can claim mileage for trips related to medical appointments or for volunteering or charity work if only if you’re claiming itemized deductions. You should investigate whether claiming the standard deduction (vs. itemized deductions) provides you a better tax benefit.

Mileage for medical care is included in your medical deduction. The rate is $0.16 for 2023.
Mileage for volunteer work is included in your charitable deduction. The rate is $0.14for 2023.

Limitations to know about when claiming mileage on your taxes

There are a few times when you won’t be permitted to claim the standard mileage rate option. This option is not allowed if you:

Use five or more cars at the same time (as in fleet operations)
Claimed a depreciation deduction for the car using any method other than straight line depreciation
Claimed a Section 179 deduction on the car
Claimed the special depreciation allowance on the car
Claimed actual car expenses after 1997 for a leased car, or
Are a rural mail carrier who receives a qualified reimbursement

What else should you consider when claiming a tax deduction for mileage?

Choosing the standard mileage rate vs. the actual car expense method has its own set of implications.

If you want to use the standard mileage rate for a personally owned car, you must use that method the first year the car is used for business. You must make the choice by the return due date (including extensions) of the year the car is placed in service. If you choose to switch methods in later years, specific rules for depreciation will apply.
If you chose the actual car expense method the first year the car is used for business, you must stick with that choice every year the car is used for your business.

Lastly, recordkeeping is a must for anyone who wants to claim a tax deduction for mileage. You’ll need comprehensive and contemporaneous records in the event the IRS wants to see them. Contemporaneous means you’re tracking your miles when you take business trips rather than trying to reconstruct them months or years later.

You could use pen and paper to keep track – or even log your miles from your computer – but there are also smartphone apps that can make tracking mileage a lot more convenient.

In addition to keeping records on your miles, you should also keep receipts for parking and toll fees. Even if you use the standard mileage rate, parking and tolls (other than parking and tolls related to your main place of business) may be deductible.

Have more questions about mileage deduction rules?

We understand you might want some help when it comes to claiming mileage on your taxes. That’s why we’re here.

Have a side business? Take control of your taxes and get every credit and deduction you deserve. File with H&R Block Online Deluxe (if you have no expenses) or H&R Block Online Premium (if you have expenses).

Have questions about self-employment taxes and other small business tax issues? Rely on our team of small business certified tax pros to get your taxes right and keep your business on track. Find out how Block Advisors can help with your small business taxes .

Our small business tax professional certification is awarded by Block Advisors, a part of H&R Block, based upon successful completion of proprietary training. Our Block Advisors small business services are available at participating Block Advisors and H&R Block offices nationwide.

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Line 25500 - Determine your maximum deduction

The maximum deduction you can claim for each eligible trip is the lowest of the following three amounts:

either the taxable travel benefits you received from employment for the trip or the portion of the $1,200 standard amount for the person travelling (you or your eligible family member) that you allocate to the trip (enter the amount for whichever option you choose in Step 3 , Chart B – column 3 of Form T2222 )

You can use the value of taxable travel benefits provided by your employer in the calculation in Step 3 if you meet both of the following conditions:

You are an employee dealing at arm's length with your employer
You had to include in your income (in the same year you have the travel expenses) the taxable travel benefits that you received from your employment in a prescribed zone

If you take a trip that begins and ends in one year and you are reimbursed the following year, you cannot claim the travel deduction for that trip. However, you can claim a travel deduction if you leave on a trip in one year and return the next year.

For example, you may leave on a trip in December and come back in January. If you receive non-refundable tickets or travel vouchers, the taxable travel benefit should be included in your T4 or T4A slip for the year the trip begins.

the total travel expenses paid for the trip (enter the amount in Step 3 , Chart B – column 4 of Form T2222 )
the cost of the lowest return airfare available at the time of the trip between the airport closest to your residence and the nearest designated city to that airport (enter the amount in Step 3 , Chart B – column 5 of Form T2222 )

If you or an eligible family member uses the standard amount to calculate a travel deduction in the year, $1,200 is the maximum total amount that may be claimed for each individual who travels, for all trips taken in the year by that individual.

Regardless of whether you or an eligible family member is claiming the travel deduction and whether trips were medical or non-medical , it is an amount per person, not per trip.

If you or an eligible family member uses the taxable travel benefit received from employment to calculate a travel deduction in a year for an individual, then no one (including the individual) can use any part of their $1,200 standard amount in calculating a travel deduction claim for any trip taken by that individual in that year.

You can claim a travel deduction even if you are not claiming a residency deduction. For example, if your spouse or common-law partner claims both the basic and the additional residency amounts, you can still claim a travel deduction.

You cannot claim a travel deduction if either of the following applies:

You or your eligible family member received or was entitled to receive non-taxable amounts as travel assistance, as a travel allowance, or as a reimbursement for travel expenses
Someone else has already claimed the travel deduction for this trip on their return

How many trips can you claim

You can claim up to two trips taken for non-medical reasons and up to two trips taken by each eligible family member.

You can also claim any number of medical trips taken by you or an eligible family member. However, no more than two non-medical trips taken by any individual (themself or an eligible family member) in a year can be claimed by all taxpayers combined.

Taxable travel benefits

Taxable travel benefits include:

travel assistance, such as airline tickets or a trip on a company-owned airplane
a travel allowance or lump-sum payment you received from your employer for travel expenses you incurred

Payments from your employer for travel that was not for employment purposes are generally considered taxable benefits. Box 32 of your T4 slip or box 028 of your T4A slip shows the taxable travel benefits you received in the year. This includes the benefits received specifically for medical travel which are shown in box 33 of your T4 slip or box 116 of your T4A slip .

You can use the benefit for medical travel in the calculation in Step 3, Chart B – column 3 of Form T2222 only if the medical services were for you or an eligible family member and were not available where you lived.

If you received a benefit that was not for any particular trip, you have to split it reasonably between the trips you are claiming.

Travel expenses

Travel expenses include:

air, train, and bus fare
vehicle expenses
hotel or motel accommodations
camping fees
other incidental expenses such as taxis and road or ferry tolls

To calculate meal and vehicle expenses, you may choose the detailed or simplified method. Your total travel expenses equal the total of the value of travel assistance provided by your employer and the travel expenses incurred by you. Include any travel expenses paid by your employer. For more information about the detailed or simplified methods including the different rates, go to Meal and vehicle rates used to calculate travel expenses for 2023 or call 1-800-267-6999 .

If you are claiming expenses for a medical trip on Form T2222 , no one (including you) can claim them as medical expenses on their return.

In cases of medical travel, if the patient needs an attendant while travelling, the attendant's travel expenses are included as part of the patient's total travel expenses. This includes travel assistance provided by your employer or actual expenses you incurred.

If the attendant was you or an eligible family member: Include the cost of the attendant's lowest return airfare in Step 3 , Chart B – column 5 of Form T2222 , as part of the patient's expense for airfare. Include the cost of the attendant's travel expenses (excluding airfare) in column 4 , as part of the patient's travel expenses.

If the attendant was not you or an eligible family member: Do not include the cost of the attendant's lowest return airfare in column 5 as part of the patient's expense for airfare. Include the cost of the attendant's travel expenses (including airfare) in column 4 as part of the patient's travel expenses.

Lowest return airfare (LRA)

The LRA available at the time of the trip means the LRA ordinarily available for regularly scheduled commercial flights (excluding promotions or discounts that are not ordinarily available) on the date that the travel began. The airfare includes any airport tax, as well as goods and services tax / harmonized sales tax and provincial sales tax. Additional charges, such as flight cancellation insurance, meals, and baggage surcharges are not considered part of the lowest return airfare.

To complete column 5 in Chart B of Form T2222 , Northern Residents Deductions , you must submit a lowest return airfare. To determine that airfare, you can use one of the following methods:

Use the cost of airfare for a round trip from the airport closest to your residence to the nearest designated city. In case the Canada Revenue Agency (CRA) asks for proof of the cost, keep your receipts and any supporting documents.
Use the amount in the lowest return airfare table which corresponds to your travel date and the airport closest to your residence. With this option, you do not need to have an airfare quote or any receipts or supporting documents.

Example 1 – Using the airfare table

Charlie has been living in Rankin Inlet, Nunavut, for the past three years. They travelled from Rankin Inlet to Iqaluit, Nunavut, to visit family on February 28 and returned on March 16 .

To calculate the travel deduction, Charlie needs to first figure out the three required amounts and enter them on Form T2222 . The cost of their flights was $1,633 and they did not have any other travel expenses. Charlie received a taxable travel benefit from their employer of $1,000. Since Charlie did not take any other trips in the same year, they decide to use the full $1,200 standard amount instead of the taxable travel benefit they received from their employer, because that benefit is less than the $1,200 standard amount. Although Charlie did not travel to the nearest designated city nor did they leave the territory, they still have to determine the lowest return airfare (LRA) at the time of their trip. Charlie did not obtain a quote before they traveled. However, Charlie checks the table and uses the airfare table amount. The airfare table amount for Rankin Inlet to Winnipeg is $3,143.

Now that Charlie has obtained the three amounts, they can calculate their travel deduction. The maximum that Charlie can claim is the lowest of the following three amounts:

the taxable travel benefit they received from their employer for the trip or the part of the $1,200 standard amount that Charlie allocated to that trip ($1,200)
the total travel expenses paid for the trip ($1,633)
the LRA available at the time of the trip between the airport closest to their residence and the nearest designated city to that airport ($3,143)

The CRA would accept Charlie’s amount for the LRA, because they chose to use the airfare table amount.

They will claim $1,200 for their trip, because it is the lowest of the three amounts.

Example 2 – Travelling by charter

Alex has always lived in Aklavik, Northwest Territories . They travel to Edmonton, Alberta, for a vacation and it is the only trip they take in the year. Alex can only travel from Aklavik by charter. The cost of the charter flights to the nearest commercial airport in Inuvik and back was $2,600. The cost of the flights from Inuvik to Edmonton and back was $1,210. Edmonton also happens to be the nearest designated city when flying from Inuvik. Alex spent an additional $1,000 for travel expenses in Edmonton. Alex received $2,000 as a taxable travel benefit from their employer.

To calculate the travel deduction, Alex needs to first figure out the three required amounts and enter them on Form T2222 . Since the taxable travel benefit Alex received from their employer is greater than the $1,200 standard amount, they decide to claim the taxable travel benefit. Alex bought economy tickets for the flights from Inuvik to Edmonton and back. Alex’s total flight expenses were $3,810. Their total travel expenses were $4,810.

Since Alex has all of the information they need, they can calculate their travel deduction. The maximum that Alex can claim is the lowest of the following three amounts:

the taxable travel benefit they received from their employer for the trip or the portion of the $1,200 standard amount that Alex allocated to that trip ($2,000)
the total travel expenses paid for the trip ($2,600 + $1,210 + $1,000 = $4,810)
the lowest return airfare (LRA) available at the time of the trip, between the airport closest to his residence and the nearest designated city to that airport ($2,600 + $1,210 = $3,810)

The CRA would accept the amount of $3,810 as the LRA, because the charter flight was to the nearest commercial airport and the flight from Inuvik to Edmonton was to the nearest designated city. If Alex is selected for review, they will need to provide their receipts for the flights to support their claim for the LRA.

Alex claims $2,000 for this trip, because it is the lowest of the three amounts.

Example 3 – Quote obtained before the day of travel

Chris has lived in Dawson City , Yukon, for the past 10 years. They drove to Whitehorse, Yukon, for a vacation and it is the only trip they took during the year. Chris left Dawson City on July 26 and returned on August 9 . From their employer, Chris received a taxable travel benefit of $2,000 for their trip, and the total cost of their trip was $1,500.

Since Chris’s taxable travel benefit received from their employer is greater than the $1,200 standard amount, they decide to claim the taxable travel benefit. Even though Chris did not fly for their trip, and they did not leave the territory, they still have to determine the lowest return airfare (LRA). Chris got a quote before they left for their trip. They went online July 19 and got a quote of $1,000 for the lowest return airfare for July 26 (the day their trip began) to the nearest designated city.

the taxable travel benefit they received from their employer for the trip or the portion of the $1,200 standard amount that Chris allocated to that trip ($2,000)
the total travel expenses paid for the trip ($1,500)
the LRA available at the time of the trip, between the airport closest to their residence and the nearest designated city to that airport ($1,000)

The CRA would accept the amount of $1,000 for the LRA, because the quote for the flight was for the lowest return airfare to the nearest designated city. If Chris was selected for review, they would need to send their documents to support their claim for the LRA.

Chris claims $1,000 for this trip, which is the lowest of the three amounts.

Example 4 – Using an economy return airfare

Taylor has lived in Fort McMurray , Alberta, for two years. They decided to go to Edmonton, Alberta, for a vacation in March and it was the only non-medical trip they took in the year. Taylor decided to fly business class instead of economy. Their ticket cost $1,440 and their total expenses for the trip were $2,100. From their employer, Taylor received $1,500 as a taxable travel benefit for their trip. As Taylor did not get a quote for the lowest return airfare (LRA), and the actual cost of the flight they took was not economy class, Taylor claims the airfare table value of $894 for the LRA.

Taylor decides to claim the taxable travel benefit, because the $1,500 they received from their employer is greater than the $1,200 standard amount.

Since Taylor has all the information they need, they can calculate their travel deduction. The maximum that Taylor can claim is the lowest of the following three amounts:

the taxable travel benefit they received from their employer for the trip or the portion of the $1,200 standard amount that Taylor allocated to that trip ($1,500)
the total travel expenses paid for the trip ($2,100)
the LRA available at the time of the trip, between the airport closest to their residence and the nearest designated city to that airport ( Taylor claims the table value for the LRA of $894 , rather than incorrectly claiming the cost of their business class tickets.)

Taylor claims $894 for this trip, because it is the lowest of the three amounts.

Since Taylor lives in a prescribed intermediate zone, their total travel deduction is one-half ($447) of the total of the lowest amounts for each trip they took ($894) .

Example 5 – How to calculate the travel deduction

Edward, Anna, and their two children are a family of four. They took a two week vacation and drove from Yellowknife to Edmonton in March 2022.

Edward received a $900 taxable travel benefit from his employer, which is an arms-length employer. He calculated his family’s travel expenses using the simplified method:

Simplified cost to drive round-trip to Edmonton = 2,950 km x 0.675 (cents per km from Northwest Territories) = $1,911.25
Accommodations cost = $600 (receipts always required)
Simplified cost of meals for 4 people = $69 (meal rate per day per person) x 4 people x 14 days travelling = $3,864 or $966 per person
$6,455 total travel expenses split between the eligible family members for Column 4

As Edward did not get a quote on or before the day of travel and he did not fly, he used the LRA amount available in the CRA’s airfare tables on canada.ca/lowest-return-airfare for the trip.

The LRA in the airfare table for a flight from Yellowknife to the nearest designated city, which is Edmonton, in March 2022 is $923 .

Since the LRA is the lowest of the three amounts, Edward will claim a total of $3,692 (the LRA for each person x 4 people traveling).

Screenshot of Chart A on form T2222. For line A, the travelers are identified as Edward, Anna, Child 1, and Child 2. For line B, Edward (name 1) is claiming the standard amount of $1,200 (amount 1) for each of the four travelers. For line C, the total amount in row B is identified as $1,200 for each traveler.

Screenshot of Chart B on form T2222. Under column 1, the travelers are identified as Edward, Anna, Child 1, and Child 2. Under column 2, the word vacation has been included as the purpose of the trip for each traveler. Under column 3, the standard amount of $1,200 has been included for each traveler. Under column 4, Edward is claiming $2,957, Anna is claiming $1,566, Child 1 is claiming $966, and Child 2 is claiming $966. Under column 5, $923 has been included as the cost of the lowest return airfare for each traveler. Under the Zone A column, $923 has been identified as the lowest amount from column 3, 4 or 5 for each traveler, for a total of $3,692 (box A). Box B is left empty. The total from box A ($3,692) plus the total from box B ($0) is $3,692, which is the final amount of the travel deduction that can be claimed for this trip.

Note: Individual expenses should be put under a specific family member where applicable (for example, the cost of a meal or an airline ticket).

Common expenses cannot be split and should be put under the person who paid the expense (or their spouse or common-law partner). In the example, Edward claimed the mileage expense and Anna claimed the accommodation expense.

Forms and publications

Income Tax Package
Form T2222, Northern Residents Deductions

Page details

Driving down taxes: Auto-related tax deductions

Key takeaways.

If you have a full-time job but use your vehicle for work duties (driving to meetings, picking up supplies, etc.), your reimbursements from your employer are likely to be tax-free for those driving costs.
If you’re self-employed, you typically can deduct expenses for the miles you drive or for the actual automobile costs for business purposes.
You can calculate your driving deduction by adding up your actual expenses or by multiplying the miles you drive by the IRS’s standard mileage rate.
The per-mile rate for 2023 is 65.5 cents per mile. The rate increases to 67 cents per mile for 2024.

Deducting auto expenses

You can make car expenses work for you. For many Americans, work and personal time have become increasingly intertwined over the years. While this certainly has its drawbacks, it can be a major benefit come tax time for those who drive as part of their work. Knowing all of the auto-related deductions you’re entitled to can ensure that your automobile is working as hard for you as you are for your business.

The first thing an auto-using taxpayer needs to do is determine how they are using their car, said Julian Block, a Larchmont, New York–based tax attorney who is the author of "Tax Deductible Travel and Moving Expenses: How to Take Advantage of Every Tax Break the Law Allows." One type of use includes personal use of your vehicle and the other includes business use. People often do a little of both with the same vehicle. "If you use your car exclusively in your business, you can typically deduct all of the car expenses," said IRS representative Sara Eguren. If you use your car for both business and personal purposes, you'll need to divide your expenses based on your mileage for business and your mileage for personal use."

First up: If you are self-employed, but occasionally use your personal auto for your business, you're likely qualified for a business expense deduction.

“If you use your car for anything business related, other than simply commuting from home to work, there might be deductions you can take," said Andrew Schrage, co-owner of the Chicago-based personal-finance site MoneyCrashers.com. "Don’t miss out."

More miles, more money

Mileage is a big deduction, Schrage noted, adding, "Although it may not seem like much, it adds up."

If you drive from your office to a job-related destination—a sales meeting, to get office supplies, or to the airport—those miles are typically deductible.

For 2023, the mileage rate is 65.5 cents per mile. This amount increases to 67 cents per mile for 2024. For more information, refer to IRS Publication 463, Travel, Gift, and Car Expenses . For a list of current-year and prior-year mileage rates see " Standard Mileage Rates ." There's a separate table for those who lease their vehicles. If you are self-employed, you may either deduct your actual expenses or use the optional standard mileage rate to calculate deductions provided you used the standard mileage rate in first year that you used the auto for business. Otherwise, you will need to use the actual expense method.

“If you’re using your vehicle, say, 75% of your time of use for business, that same percentage of all of your qualified auto expenses are deductible," says Block.

"If it’s a car used exclusively for business, it’s 100%. If you’re claiming actual expenses, things like gas, oil, repairs, insurance, registration fees, lease payments, depreciation, bridge and tunnel tolls, and parking can all be deducted." Just make sure to keep a detailed log and all receipts, he advises, and keep track of your yearly mileage and then deduct the percentage used exclusively for work. One smart tip, says Block: “If you have a gas guzzler, you’re likely better off taking the actual deductions.”

TurboTax Tip: If you’re self-employed and claim a home office, all the driving you do from your home to clients’ offices is typically deductible. If you don’t have an office in the home, the first and last trips of the day are typically considered non-deductible commuting.

Keeping good records

Illinois CPA Neil Johnson recommends you keep meticulous records throughout the year to ensure you are prepared when tax time arrives. The more information the better, says Johnson, who has adopted the nickname given him by one of his clients and is now known as "the Tax Dude." "When deducting your auto expenses, the most important thing is keeping detailed records of your all of your miles," he said. "Include what clients you were seeing, the purpose of the trip, the job being worked on. You could enter it into a simple Excel spreadsheet each day or use an app on your phone and soon it’ll become second nature.”

If you are self-employed and claim a dedicated home office—a space set aside exclusively for business—the driving you do from your home to clients’ offices is typically deductible.

"If you don’t have a home office," said Block, "your first and last trips of the day are typically considered non-deductible commuting." In other words, if you are a freelancer who regularly drives to different clients' offices in a day, the first trip out from home and the last drive back are typically considered commuting and are not usually deductible. However, the distance driven between each client can be deducted.

Cruise control

From Block and Schrage come a few cool, little-known auto-related expenses you may deduct—and one that you may not deduct.

If you own rental property, you may claim the mileage driven to and from your property when you go to maintain or check on it, says Block.
Transportation expenses—including parking and tolls—for volunteer work at qualifying charities (including nonprofit board meetings) are considered charitable donations and may be included as an itemized deduction on your income taxes, according to Schrage. The rate per mile, however, is lower: 14 cents per mile.
If you’re using your car for business, even car-washing and polishing expenses are deductible when claiming actual expenses rather than the standard mileage rate, Block says.
Block says that if you incur medical expenses of over 7.5% of your adjusted gross income (AGI) you may deduct health-related travel expenses. This includes travel to the medical provider and parking as well.
Fines for traffic tickets are never deductible, even if you receive them doing work-related driving, says Block.

With TurboTax Live Business , get unlimited expert help while you do your taxes, or let a tax expert file completely for you, start to finish. Get direct access to small business tax experts who are up to date with the latest federal, state and local taxes. Small business owners get access to unlimited, year-round advice and answers at no extra cost, maximize credits and deductions, and a 100% Accurate, Expert Approved guarantee.

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After you File

Family Tax Deductions: What Can I Claim?

Becoming a parent can be one of the most incredible experiences we have, but it can also be very stressful. As parents, there is a lot to think about when having a child surrounding their health, well-being, and future, and of course, our financial responsibility for their care, feeding, and education. To assist us with the costs of being a parent, the Canadian Revenue Agency (CRA) has provided a number of ways for families to save money through tax deductions and tax credits.

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Canada Child Benefit

CRA offers Canada Child Benefit , which is a non-taxable benefit, for each eligible family to cover the cost of raising children under the age of 18. Children with disabilities will receive an additional amount for the Child Disability Benefit . The benefit is paid when you register the child after birth and will stop automatically when the child turns 18. You have to file your income tax return with your spouse/common-law partner to be able to receive CCB every year. For a single parent, the parent with custody is the one who receives the benefit. For shared custody, the benefit is either split in half or according to the custody agreement.

COVID-19 Impact on CCB

Canada Child Benefit is a tax–free monthly payment paid to families to help with the expenses of raising a child. Since CRA has extended the deadline for filing the income tax return, they also extended the CCB payments until September 2020. Ideally, you and your spouse/common-law partner have to submit your income tax returns every year to assess your eligibility for the CCB. If you haven’t submitted one for 2019, the payments will be assessed based on your 2018 income. You still have to submit your 2019 income tax return if you wish to receive the CCB after September 2020.

CRA offered a one-time increase in the CCB payments in May 2020 for those who received CCB in April 2020. Individuals were able to apply for up to $300 per child (max applications for two children per family). You are not required to report this income in your 2020 tax return. Parents with shared custody who share the base CCB payments will share the increased payment.

Birth-Related Medical Expenses

All Canadian taxpayers can claim medical expenses that exceed the lesser of either the tax year’s threshold or 3 percent of your net income when you claim the medical expenses for yourself, spouse/common-law partner, and children under 18. However, if you are claiming the medical expenses paid for other dependents, you can claim the amount that exceeds 3 percent of their net income. Medical expenses are non-refundable tax credit, which means you can get a credit of 15 percent of the calculated amount against your taxes owed not resulting in a negative amount. You may include birth-related medical expenses that were not covered by your provincial health plan or your health insurance.

Eligible Dependent Amount

If you are a single parent, you may be able to claim the amount for an eligible dependent . Regardless of how many children you have, you can claim this amount for one child only. You can claim the full amount of the year of birth. If you have shared custody, only one parent can claim the amount. The amount is reduced by the child’s income from all sources such as CPP.

Canada Caregiver Amount for children under 18

If you have a child who has infirmity or disability, you can claim the Canada Caregiver Amount for your child or your spouse/common-law child. You can claim this amount for as many children as you have. For a single parent with shared custody, only the parent who claims the Eligible Dependent Amount will be able to claim the Canada Caregiver Amount for the same child.

Child Care Expense Deduction

You can claim the following childcare expenses incurred in the tax year:

Caregivers such as nannies and babysitters
Day nursery schools and daycare centers
Educational institutions that provide childcare services
Day camps and day sports schools with a primary goal of childcare
Boarding schools, overnight sports schools, or camps where lodging is involved

You may also claim advertising or placement agency costs incurred to locate a childcare specialist. Click on this link for more information on other childcare expense deductions.

What’s important to note is that if you pay an individual person – such as a nanny or babysitter – for childcare, you must provide their Social Insurance Number as well as all related receipts. A good tip to follow is asking for these ahead of time instead of at the end of the year.

As a Canadian taxpayer, the maximum amount you can claim is:

$8,000 for each child under 7 years of age at the end of the year
$5,000 for each child between 7 and 16 years of age
$11,000 for each child who qualifies for the disability tax credit

You can find the amount in the T778 form .

The deduction must be claimed by the spouse/common-law partner with the lower income. You will not qualify for this deduction if one of the parents is not working, studying, or if they are receiving Employment Insurance (EI). EI qualifies as income only for single parents. The higher income partner can claim this amount if the lower-income partner is enrolled in school, sick, confined in prison, incapable of caring for the child due to infirmity or disability. You will need the receipt from your child care provider to be able to claim this amount.

Children’s Fitness Tax Credit and Art Amount

Only Quebec , Manitoba , and Yukon still have the fitness tax credits and the children’s art amount. All other provinces have eliminated these credits.

Yukon children’s fitness tax credit which allows you to claim $1000 fees paid for children under 16 offers also a supplement of an additional $500 for children with disabilities. Yukon offers a claim of $500 fees paid for the children’s art amount for children under 16 who are enrolled in an art program and a supplement for an additional $500 for children with disabilities.
Manitoba offers the same children’s art amount as Yukon but a different Manitoba fitness amount that covers $500 in fees paid for any family member.
Quebec residents can apply for a similar credit called Tax Credit for Children’s Activity . The credit allows you to apply for $500 in fees paid per child and another $500 per child who is suffering from infirmity or disability.

Registered Education Saving Plan (RESP)

Worried about your child’s future? You can start saving for your child’s education from day one. You enter a contract with a subscriber (Bank, Insurance companies, or any financial company) where you can name one or multiple children as beneficiaries of this plan. Canada Revenue Agency registers the education saving plan contract as an RESP . CRA has set the contribution limit and the grants they will provide for each child.

The RESP contributions are not deductible since you contribute the money after you pay taxes on your income. However, when the plan reaches maturity, it is considered the income of the child. The beneficiary (child or children), will be taxed on the increased portion not the original contribution amount from his parent. If the child decided not to go join a post-secondary education, the subscriber will attribute the money back to the contributor and any government grants has to be paid back to the government. Unless the child has a disability, you can transfer the fund to a registered disability saving plan ( RDSP ). This option is available only for children with a certified disability form T2201 registered with CRA.

Transferred and Pooled Credits

As a new parent, you may be worried you can’t do your taxes yourself. TurboTax has been helping Canadians get their taxes done right, and get their maximum refund for more than 20 years! We help guide you through your taxes step-by-step and automatically search through more than 400 credits and deductions to find all the ones that apply to you.

You can also easily get answers to your questions. TurboTax SmartLook is a new feature that virtually brings tax and product experts directly to you through one-way video technology. This online, on-demand service can connect you to live, personalized advice from tax and product experts, which means that when it comes to your taxes, “do it yourself” no longer means doing it alone. SmartLook is available for family’s returns under the TurboTax Standard product and most TurboTax Standard product .

If you need more help, TurboTax Live may be for you. With TurboTax Live Assist & Review , a tax expert is available throughout your tax preparation to answer questions, then when you are done they will fully review your return to make sure it is correct and you’re claiming all the credits and deductions that apply to you.

With TurboTax Live Full Service , we can fully prepare and file your tax for you! Just upload your slips and receipts to your secure online account, we’ll prepare your return, review it with you then file it with the CRA – all without you having to leave the comfort of your home!

How to calculate your tax refund, tax tip: what should i expect during a cra audit, tax tip: what is the working income tax benefit (witb).

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For use in preparing 2023 Returns

Publication 526 - Introductory Material

For the latest information about developments related to Pub. 526 (such as legislation enacted after we release it), go to IRS.gov/Pub526 .

Disallowance of deduction for certain conservation contributions by pass-through entities. Subject to some exceptions, if you are a member of a pass-through entity (such as a partner in a partnership or a shareholder in an S corporation), and the amount of the pass-through entity’s qualified conservation contribution exceeds 2.5 times the sum of each member’s relevant basis, the contribution is not treated as a qualified conservation contribution and no one may claim a deduction for the contribution. Thus, your charitable conservation contribution deduction is disallowed. See Disallowance of deductions for certain conservation contributions by pass-through entities later.

Qualified charitable distribution one-time election. Beginning in 2023, you can elect to make a one-time distribution up to $50,000 from an individual retirement account to charities through a charitable remainder annuity trust, a charitable remainder unitrust, or a charitable gift annuity each of which is funded only by qualified charitable distributions. See Pub. 590-B for more information.

Charitable contributions for non-itemizers. The temporary deduction for charitable cash contributions for taxpayers who do not itemize their tax returns has expired and is no longer available.

Deduction over $5,000. You must complete Section B of Form 8283 for each item—or group of similar non-cash items— for which you claim a deduction of over $5,000 except as provided in Deductions Over $5,000 , later. The organization that received the property must complete and sign Part V of Section B, Form 8283.

Reduced deductibility of state and local tax credits. If you make a payment or transfer property to or for the use of a qualified organization and you receive or expect to receive a state or local tax credit or a state or local tax deduction in return, your charitable contribution deduction may be reduced. See State or local tax credit , later.

Photographs of missing children. The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC) . Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 800-THE-LOST (800-843-5678) or visiting www.missingkids.org if you recognize a child.

Introduction

This publication explains how individuals claim a deduction for charitable contributions. It discusses the types of organizations to which you can make deductible charitable contributions and the types of contributions you can deduct. It also discusses how much you can deduct, what records you must keep, and how to report charitable contributions.

A charitable contribution is a donation or gift to, or for the use of, a qualified organization. It is voluntary and is made without getting, or expecting to get, anything of equal value.

Qualified organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals. You will find descriptions of these organizations under Organizations That Qualify To Receive Deductible Contributions .

Generally, to deduct a charitable contribution, you must itemize deductions on Schedule A (Form 1040). The amount of your deduction may be limited if certain rules and limits explained in this publication apply to you.

We welcome your comments about this publication and suggestions for future editions.

You can send us comments through IRS.gov/FormComments . Or, you can write to the Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.

Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments and suggestions as we revise our tax forms, instructions, and publications. Don’t send tax questions, tax returns, or payments to the above address.

If you have a tax question not answered by this publication or the How To Get Tax Help section at the end of this publication, go to the IRS Interactive Tax Assistant page at IRS.gov/Help/ITA where you can find topics by using the search feature or viewing the categories listed.

Go to IRS.gov/Forms to download current and prior-year forms, instructions, and publications.

Go to IRS.gov/Forms to order current forms, instructions, and publications; call 800–829–3676 to order prior-year forms and instructions. The IRS will process your order for forms and publications as soon as possible. Don’t resubmit requests you’ve already sent us. You can get forms and publications faster online.

Useful Items

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Publication 526 - Main Contents

Organizations that qualify to receive deductible contributions.

You can deduct your contributions only if you make them to a qualified organization.

You can ask any organization whether it is a qualified organization, and most will be able to tell you. You can also check by going to IRS.gov/TEOS . This online tool will enable you to search for qualified organizations.

Types of Qualified Organizations

Generally, only the following types of organizations can be qualified organizations.

A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Certain organizations that foster national or international amateur sports competition also qualify.

War veterans' organizations, including posts, auxiliaries, trusts, or foundations organized in the United States or any of its possessions (including Puerto Rico).

Domestic fraternal societies, orders, and associations operating under the lodge system. (Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.)

Certain nonprofit cemetery companies or corporations. (Your contribution to this type of organization isn't deductible if it can be used for the care of a specific lot or mausoleum crypt.)

The United States or any state, the District of Columbia, a U.S. possession (including Puerto Rico), a political subdivision of a state or U.S. possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. (Your contribution to this type of organization is deductible only if it is to be used solely for public purposes.)

Example 1. You contribute cash to your city's police department to be used as a reward for information about a crime. The city police department is a qualified organization, and your contribution is for a public purpose. You can deduct your contribution.

Example 2. You make a voluntary contribution to the social security trust fund, not earmarked for a specific account. Because the trust fund is part of the U.S. Government, you contributed to a qualified organization. You can deduct your contribution.

The following list gives some examples of qualified organizations.

Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations.

Most nonprofit charitable organizations such as the American Red Cross and the United Way.

Most nonprofit educational organizations, including the Scouts BSA, Girl Scouts of America, colleges, and museums. This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. However, if your contribution is a substitute for tuition or other enrollment fee, it isn't deductible as a charitable contribution, as explained later under Contributions You Can't Deduct .

Nonprofit hospitals and medical research organizations.

Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs.

Nonprofit volunteer fire companies.

Nonprofit organizations that develop and maintain public parks and recreation facilities.

Civil defense organizations.

You may be able to deduct contributions to certain Canadian charitable organizations covered under an income tax treaty with Canada. To deduct your contribution to a Canadian charity, you must generally have income from sources in Canada. See Pub. 597, Information on the United States–Canada Income Tax Treaty, for information on how to figure your deduction.

Under the United States–Mexico income tax treaty, a contribution to a Mexican charitable organization may be deductible, but only if and to the extent the contribution would have been treated as a charitable contribution to a public charity created or organized under U.S. law. To deduct your contribution to a Mexican charity, you must have income from sources in Mexico. The limits described in Limits on Deductions , later, apply and are figured using your income from Mexican sources.

Under the United States–Israel income tax treaty, a contribution to an Israeli charitable organization is deductible if and to the extent the contribution would have been treated as a charitable contribution if the organization had been created or organized under U.S. law. To deduct your contribution to an Israeli charity, you must have income from sources in Israel. The limits described in Limits on Deductions , later, apply. The deduction is also limited to 25% of your AGI from Israeli sources.

Contributions You Can Deduct

Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement.

The contributions must be made to a qualified organization and not set aside for use by a specific person.

If you give property to a qualified organization, you can generally deduct the fair market value (FMV) of the property at the time of the contribution. See Contributions of Property , later.

Your deduction for charitable contributions generally can't be more than 60% of your AGI, but in some cases 20%, 30%, or 50% limits may apply.

Table 1 gives examples of contributions you can and can't deduct.

Table 1. Examples of Charitable Contributions—A Quick Check

Contributions from which you benefit.

If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Also see Contributions From Which You Benefit under Contributions You Can't Deduct , later.

If you pay more than FMV to a qualified organization for goods or services, the excess may be a charitable contribution. For the excess amount to qualify, you must pay it with the intent to make a charitable contribution.

You pay $65 for a ticket to a dinner dance at a church. Your entire $65 payment goes to the church. The ticket to the dinner dance has an FMV of $25. When you buy your ticket, you know its value is less than your payment. To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from your total payment ($65). You can deduct $40 as a charitable contribution to the church.

At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. The amount you pay is no more than the fair rental value. You haven't made a deductible charitable contribution.

If you pay a qualified organization more than FMV for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive.

If there is an established charge for the event, that charge is the value of your benefit. If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit. Whether you use the tickets or other privileges has no effect on the amount you can deduct. However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket.

You pay $40 to see a special showing of a movie for the benefit of a qualified organization. Printed on the ticket is “Contribution—$40.” If the regular price for the movie is $8, your contribution is $32 ($40 payment − $8 regular price).

If you make a payment or transfer property to or for the use of a qualified organization and receive or expect to receive a state or local tax credit in return, then the amount treated as a charitable contribution deduction is reduced by the amount of the state or local tax credit you receive or expect to receive in consideration for your payment or transfer, but an exception may apply. If an exception doesn’t apply, you must reduce your charitable contribution deduction even if you can’t claim the state tax credit in the year.

If the state or local tax credit you receive or expect to receive doesn’t exceed 15% of your payment amount or 15% of the FMV of the transferred property, then your charitable contribution deduction isn’t reduced.

You make a cash contribution of $1,000 to charity X, a qualified organization. In return for your payment you receive or expect to receive a state tax credit of 70% of your $1,000 contribution. The amount of your charitable contribution to charity X is reduced by $700 (70% of $1,000). The result is your charitable contribution deduction to charity X can’t exceed $300 ($1,000 donation−$700 state tax credit). The reduction applies even if you can’t claim the state tax credit for that year. Your deductible charitable contribution to charity X is $300. Your total contributions may still be subject to limitations. See Limits on Deductions , later.

You donate a painting to charity Y, a qualified organization. At the time of the donation, the painting has an FMV of $100,000. In return for the painting, you receive or expect to receive a state tax credit of 10% of the FMV of the painting. The state tax credit is $10,000 (10% of $100,000). The amount of your state tax credit does not exceed 15% of the FMV of the painting. As a result, your charitable contribution deduction to charity Y is not reduced. Your deductible charitable contribution for your noncash contribution to charity Y is $100,000. However, your total contributions may still be subject to limitations. See Limits on Deductions , later.

If you make a payment or transfer property to a qualified organization and receive or expect to receive a state or local tax deduction in return, then the amount of your charitable contribution deduction to the organization may be reduced in some circumstances. If the amount of the state or local tax deduction exceeds the amount of your cash contribution or the FMV of the transferred property, then your charitable contribution deduction is reduced. However, if the amount of the state or local tax deduction doesn’t exceed the amount of your payment or the FMV of the transferred property, then no reduction is necessary.

You make a cash contribution of $1,000 to charity Z, a qualified organization. Under state law, you are entitled to receive a state tax deduction of $1,000 in return for your payment. The amount of your charitable contribution deduction to charity Z isn’t reduced. Your charitable contribution deduction to charity Z is $1,000. However, your total contributions may still be subject to limitations. See Limits on Deductions , later.

You may be able to deduct membership fees or dues you pay to a qualified organization. However, you can deduct only the amount that is more than the value of the benefits you receive.

You can't deduct dues, fees, or assessments paid to country clubs and other social organizations. They aren't qualified organizations.

Both you and the organization can disregard the following membership benefits if you get them in return for an annual payment of $75 or less.

Any rights or privileges that you can use frequently while you are a member, such as:

Free or discounted admission to the organization's facilities or events,

Free or discounted parking,

Preferred access to goods or services, and

Discounts on the purchase of goods and services.

But, item (1) doesn’t include rights to purchase tickets for seating at an athletic event in an athletic stadium of a college or university as a result of a contribution to such institution.

Admission, while you are a member, to events open only to members of the organization if the organization reasonably projects that the cost per person (excluding any allocated overhead) isn't more than $12.50.

You don't have to reduce your contribution by the value of any benefit you receive if both of the following are true.

You receive only a small item or other benefit of token value.

The qualified organization correctly determines that the value of the item or benefit you received isn't substantial and informs you that you can deduct your payment in full.

A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. The statement must say you can deduct only the amount of your payment that is more than the value of the goods or services you received. It must also give you a good faith estimate of the value of those goods or services.

The organization can give you the statement either when it solicits or when it receives the payment from you.

An organization won't have to give you this statement if one of the following is true.

The organization is:

A governmental organization described in (5) under Types of Qualified Organizations , earlier, or

An organization formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally isn't sold in commercial transactions outside the donative context.

You receive only items whose value isn't substantial, as described under Token items , earlier.

You receive only membership benefits that can be disregarded, as described under Membership fees or dues , earlier.

Expenses Paid for Student Living With You

You may be able to deduct some expenses of having a student live with you. You can deduct qualifying expenses for a foreign or American student who:

Lives in your home under a written agreement between you and a qualified organization (defined later) as part of a program of the organization to provide educational opportunities for the student,

Isn't your relative (defined later) or dependent (also defined later), and

Is a full-time student in the 12th or any lower grade at a school in the United States.

For these purposes, a qualified organization can be any of the organizations described earlier under Types of Qualified Organizations , except those in (4) and (5). For example, if you are providing a home for a student as part of a state or local government program, you can't deduct your expenses as charitable contributions. But see Foster parents under Out-of-Pocket Expenses in Giving Services , later, if you provide the home as a foster parent.

The term “relative” means any of the following persons.

Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). A legally adopted child is considered your child.

Your sibling(s), half sibling(s), or step-sibling(s).

Your parent(s), grandparent(s), or other direct ancestor(s).

Your step-parent(s).

A child of your sibling(s).

A sibling of your parent(s).

The spouse of your child, the parent(s) of your spouse, the sibling(s) of your spouse.

For this purpose, the term “dependent” means:

A person you can claim as a dependent, or

A person you could have claimed as a dependent except that:

The person received gross income of $4,700 or more;

The person filed a joint return; or

You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2023 return.

You may be able to deduct the cost of books, tuition, food, clothing, transportation, medical and dental care, entertainment, and other amounts you actually spend for the well-being of the student.

You can't deduct depreciation on your home, the FMV of lodging, and similar items not considered amounts actually spent by you. Nor can you deduct general household expenses, such as taxes, insurance, and repairs.

In most cases, you can't claim a charitable contribution deduction if you are compensated or reimbursed for any part of the costs of having a student live with you. However, you may be able to claim a charitable contribution deduction for the unreimbursed portion of your expenses if you are reimbursed only for an extraordinary or one-time item, such as a hospital bill or vacation trip, you paid in advance at the request of the student's parents or the sponsoring organization.

You can't deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country.

For a list of what you must file with your return if you deduct expenses for a student living with you, see Reporting expenses for student living with you under How To Report , later.

Out-of-Pocket Expenses in Giving Services

Table 2. volunteers' questions and answers.

Although you can't deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be:

Unreimbursed;

Directly connected with the services;

Expenses you had only because of the services you gave; and

Not personal, living, or family expenses.

Table 2 contains questions and answers that apply to some individuals who volunteer their services.

You can deduct reasonable unreimbursed out-of-pocket expenses you pay to allow underprivileged youths to attend athletic events, movies, or dinners. The youths must be selected by a charitable organization whose goal is to reduce juvenile delinquency. Your own similar expenses in accompanying the youths aren't deductible.

If a qualified organization selects you to attend a convention as its representative, you can deduct your unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight for the convention. However, see Travel , later.

You can't deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. You also can't deduct travel, meals and lodging, and other expenses for your spouse or children.

You can't deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention.

You can deduct the cost and upkeep of uniforms that aren't suitable for everyday use and that you must wear while performing donated services for a qualified organization.

You may be able to deduct as a charitable contribution some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and aren't, in fact, making a profit. A qualified organization must select the individuals you take into your home for foster care.

You can deduct expenses that meet both of the following requirements.

They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child.

They are incurred primarily to benefit the qualified organization.

Unreimbursed expenses that you can't deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. For details, see Pub. 501, Dependents, Standard Deduction, and Filing Information.

You cared for a foster child because you wanted to adopt her, not to benefit the agency that placed her in your home. Your unreimbursed expenses aren't deductible as charitable contributions.

You can deduct as a charitable contribution any unreimbursed expenses you have while in a permanent diaconate program established by your church. These expenses include the cost of vestments, books, and transportation required in order to serve in the program as either a deacon candidate or an ordained deacon.

You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. You can't deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance.

If you don't want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution.

You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate.

You must keep reliable written records of your car expenses. For more information, see Car expenses under Substantiation Requirements , later.

Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a qualified organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. This applies whether you pay the expenses directly or indirectly. You are paying the expenses indirectly if you make a payment to the qualified organization and the organization pays for your travel expenses.

The deduction for travel expenses won't be denied simply because you enjoy providing services to the qualified organization. Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. However, if you have only nominal duties, or if for significant parts of the trip you don't have any duties, you can't deduct your travel expenses.

You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. You participate in the activities of the group and enjoy your time with them. You oversee the breaking of camp and you transport the group home. You can deduct your travel expenses.

You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. The project is sponsored by a qualified organization. In most circumstances, you can't deduct your expenses.

You work for several hours each morning on an archeological dig sponsored by a qualified organization. The rest of the day is free for recreation and sightseeing. You can't take a charitable contribution deduction even though you work very hard during those few hours.

You spend the entire day attending a qualified organization's regional meeting as a chosen representative. In the evening you go to the theater. You can claim your travel expenses as charitable contributions, but you can't claim the cost of your evening at the theater.

If you provide services for a qualified organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. You may be able to deduct any necessary travel expenses that are more than the allowance.

These include:

Air, rail, and bus transportation;

Out-of-pocket expenses for your car;

Taxi fares or other costs of transportation between the airport or station and your hotel;

Lodging costs; and

The cost of meals.

You may be able to deduct as a charitable contribution any reasonable and necessary whaling expenses you pay during the year to carry out sanctioned whaling activities. The deduction is limited to $10,000 a year. To claim the deduction, you must be recognized by the Alaska Eskimo Whaling Commission as a whaling captain charged with the responsibility of maintaining and carrying out sanctioned whaling activities.

Sanctioned whaling activities are subsistence bowhead whale hunting activities conducted under the management plan of the Alaska Eskimo Whaling Commission.

Whaling expenses include expenses for:

Acquiring and maintaining whaling boats, weapons, and gear used in sanctioned whaling activities;

Supplying food for the crew and other provisions for carrying out these activities; and

Storing and distributing the catch from these activities.

Contributions You Can't Deduct

There are some contributions you can't deduct and others you can deduct only in part.

You can't deduct as a charitable contribution:

A contribution to a specific individual,

A contribution to a nonqualified organization,

The part of a contribution from which you receive or expect to receive a benefit,

The value of your time or services,

Your personal expenses,

A qualified charitable distribution from an individual retirement arrangement (IRA),

Appraisal fees,

Certain contributions to donor-advised funds,

Certain contributions of partial interests in property, or

Certain conservation contributions by pass-through entities.

Detailed discussions of these items follow.

You can't deduct contributions to specific individuals, including the following.

Contributions to fraternal societies made for the purpose of paying medical or burial expenses of members.

Contributions to individuals who are needy or worthy. You can't deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you don't indicate that your contribution is for a specific person.

Example. You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. However, you can’t deduct contributions earmarked for relief of a particular individual or family.

Payments to a member of the clergy that can be spent as they wish, such as for personal expenses.

Expenses you paid for another person who provided services to a qualified organization.

Example. Your child does missionary work. You pay their expenses. You can’t claim a deduction for the expenses you paid related to their contribution of services.

Payments to a hospital that are for a specific patient's care or for services for a specific patient. You can’t deduct these payments even if the hospital is operated by a city, state, or other qualified organization.

You can't deduct contributions to organizations that aren't qualified to receive tax-deductible contributions, including the following.

Certain state bar associations if:

The bar isn't a political subdivision of a state;

The bar has private, as well as public, purposes, such as promoting the professional interests of members; and

Your contribution is unrestricted and can be used for private purposes.

Chambers of commerce and other business leagues or organizations.

Civic leagues and associations.

Country clubs and other social clubs.

Foreign organizations other than certain Canadian, Israeli, or Mexican charitable organizations. (See Canadian charities , Mexican charities , and Israeli charities under Organizations That Qualify To Receive Deductible Contributions , earlier.) Also, you can't deduct a contribution you made to any qualifying organization if the contribution is earmarked to go to a foreign organization. However, certain contributions to a qualified organization for use in a program conducted by a foreign charity may be deductible as long as they aren't earmarked to go to the foreign charity. For the contribution to be deductible, the qualified organization must approve the program as furthering its own exempt purposes and must keep control over the use of the contributed funds. The contribution is also deductible if the foreign charity is only an administrative arm of the qualified organization.

Homeowners' associations.

Labor unions.

Political organizations and candidates.

If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you can't deduct the part of the contribution that represents the value of the benefit you receive. See Contributions From Which You Benefit under Contributions You Can Deduct , earlier. These contributions include the following.

Contributions to a college or university if the amount paid is to (or for the benefit of) a college or university in exchange for tickets (or the right to buy tickets) to an athletic event in an athletic stadium of the college or university.

Contributions from which you receive or expect to receive a credit or deduction against state or local taxes unless an exception applies. See State or local tax credit and State or local tax deduction , earlier.

Contributions for lobbying. This includes amounts you earmark for use in, or in connection with, influencing specific legislation.

Contributions to a retirement home for room, board, maintenance, or admittance. Also, if the amount of your contribution depends on the type or size of apartment you will occupy, it isn't a charitable contribution.

Costs of raffles, bingo, lottery, etc. You can't deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets or to play bingo or other games of chance. For information on how to report gambling winnings and losses, see Expenses You Can Deduct in Pub. 529.

Dues to fraternal orders and similar groups. However, see Membership fees or dues under Contributions From Which You Benefit , earlier.

Tuition, or amounts you pay instead of tuition. You can't deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. You also can't deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation.”

Contributions connected with split-dollar insurance arrangements. You can't deduct any part of a contribution to a qualified organization if, in connection with the contribution, the organization directly or indirectly pays, has paid, or is expected to pay any premium on any life insurance, annuity, or endowment contract for which you, any member of your family, or any other person chosen by you (other than a qualified charitable organization) is a beneficiary.

Example. You donate money to a qualified organization. The charity uses the money to purchase a cash value life insurance policy. The beneficiaries under the insurance policy include members of your family. Even though the charity may eventually get some benefit out of the insurance policy, you can't deduct any part of the donation.

Qualified Charitable Distributions

A qualified charitable distribution (QCD) is a distribution made directly by the trustee of your individual retirement arrangement (IRA), other than an SEP or SIMPLE IRA, to certain qualified organizations. You must have been at least age 70½ when the distribution was made. Your total QCDs for the year can't be more than $100,000. If all the requirements are met, a QCD may be nontaxable; however, if the QCD is nontaxable, you may not be able to claim it as a charitable contribution deduction. You may be able to claim a charitable contribution deduction if you claim the income you are deducting as a qualified contribution. See Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs), for more information about QCDs.

For tax years beginning after 2022, you can elect to make a one-time distribution of up to $50,000 from an individual retirement account. This one-time distribution may be made through a charitable remainder trust, a charitable remainder unitrust, or a charitable gift annuity funded only by qualified charitable distributions.

You can't deduct the value of your time or services, including:

Blood donations to the American Red Cross or to blood banks, and

The value of income lost while you work as an unpaid volunteer for a qualified organization.

You can't deduct personal, living, or family expenses, such as the following items.

The cost of meals you eat while you perform services for a qualified organization, unless it is necessary for you to be away from home overnight while performing the services.

Adoption expenses, including fees paid to an adoption agency and the costs of keeping a child in your home before the adoption is final. However, you may be able to claim a tax credit for these expenses. Also, you may be able to exclude from your gross income amounts paid or reimbursed by your employer for your adoption expenses. See Form 8839, Qualified Adoption Expenses, and its instructions, for more information.

You can't deduct as a charitable contribution any fees you pay to find the FMV of donated property.

You can't deduct a contribution to a donor-advised fund if:

The qualified organization that sponsors the fund is a war veterans' organization, a fraternal society, or a nonprofit cemetery company; or

You don't have an acknowledgment from that sponsoring organization that it has exclusive legal control over the assets contributed.

Generally, a donor-advised fund is a fund or account in which a donor can, because of being a donor, advise the fund how to distribute or invest amounts held in the fund. For details, see Internal Revenue Code section 170(f)(18).

Generally, you can't deduct a contribution of less than your entire interest in property. For details, see Partial Interest in Property under Contributions of Property , later.

Contributions of Property

If you contribute property to a qualified organization, the amount of your charitable contribution is generally the FMV of the property at the time of the contribution. However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. See Giving Property That Has Increased in Value , later.

For information about the records you must keep and the information you must furnish with your return if you donate property, see Substantiation Requirements and How To Report , later.

Contributions Subject to Special Rules

Special rules apply if you contribute:

Clothing or household items;

A car, boat, or airplane;

Taxidermy property;

Property subject to a debt;

A partial interest in property;

A fractional interest in tangible personal property;

A qualified conservation contribution;

A future interest in tangible personal property;

Inventory from your business; or

A patent or other intellectual property.

These special rules are described next.

Clothing and Household Items

You can't take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better.

You can take a deduction for a contribution of an item of clothing or a household item that isn't in good used condition or better if you deduct more than $500 for it, and include a qualified appraisal prepared by a qualified appraiser and a completed Form 8283, Section B.

Household items include:

Furniture and furnishings,

Electronics,

Appliances,

Linens, and

Other similar items.

Household items don't include:

Paintings, antiques, and other objects of art;

Jewelry and gems; and

Collections.

To determine the FMV of these items, use the rules under Determining FMV , later.

Cars, Boats, and Airplanes

The following rules apply to any donation of a qualified vehicle.

A qualified vehicle is:

A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways;

An airplane.

If you donate a qualified vehicle with a claimed FMV of more than $500, you can deduct the smaller of:

The gross proceeds from the sale of the vehicle by the organization, or

The vehicle's FMV on the date of the contribution. If the vehicle's FMV was more than your cost or other basis, you may have to reduce the FMV to figure the deductible amount, as described under Giving Property That Has Increased in Value , later.

You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle.

If you e-file your return, you must:

Attach Copy B of Form 1098-C to Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, and mail the forms to the IRS; or

Include Copy B of Form 1098-C as a pdf attachment if your software program allows it.

If you don't attach Form 1098-C (or other statement), you can't deduct your contribution.

You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. But if Exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation.

If the filing deadline is approaching and you still don't have a Form 1098-C, you have two choices.

Request an automatic 6-month extension of time to file your return. You can get this extension by filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. For more information, see the Instructions for Form 4868.

File the return on time without claiming the deduction for the qualified vehicle. After receiving the Form 1098-C, file an amended return, Form 1040-X, Amended U.S. Individual Income Tax Return, claiming the deduction. Attach Copy B of Form 1098-C (or other statement) to the amended return.

There are two exceptions to the rules just described for deductions of more than $500.

If the qualified organization makes a significant intervening use of, or material improvement to, the vehicle before transferring it, you can generally deduct the vehicle's FMV at the time of the contribution. But if the vehicle's FMV was more than your cost or other basis, you may have to reduce the FMV to get the deductible amount, as described under Giving Property That Has Increased in Value , later. The Form 1098-C (or other statement) will show whether this exception applies.

If the qualified organization will give the vehicle, or sell it for a price well below FMV, to a needy individual to further the organization's charitable purpose, you can generally deduct the vehicle's FMV at the time of the contribution. But if the vehicle's FMV was more than your cost or other basis, you may have to reduce the FMV to get the deductible amount, as described under Giving Property That Has Increased in Value , later. The Form 1098-C (or other statement) will show whether this exception applies.

This exception doesn't apply if the organization sells the vehicle at auction. In that case, you can't deduct the vehicle's FMV.

You donate a used car to a qualified organization. You bought it 3 years ago for $9,000. A used car guide shows the FMV for this type of car is $6,000. However, you get a Form 1098-C from the organization showing the car was sold for $2,900. Neither Exception 1 nor Exception 2 applies. If you itemize your deductions, you can deduct $2,900 for the donation. You must attach Form 1098-C and Form 8283, Noncash Charitable Contributions, to your tax return.

If the qualified organization sells the vehicle for $500 or less and Exceptions 1 and 2 don't apply, you can deduct the smaller of:

The vehicle's FMV on the date of the contribution. But if the vehicle's FMV was more than your cost or other basis, you may have to reduce the FMV to get the deductible amount, as described under Giving Property That Has Increased in Value , later.

If the vehicle's FMV is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. The statement must contain the information and meet the tests for an acknowledgment described under Deductions of at Least $250 but Not More Than $500 under Substantiation Requirements , later.

To determine a vehicle's FMV, use the rules described under Determining FMV , later.

The vehicle donation rules just described don't apply to donations of inventory. For example, these rules don't apply if you are a car dealer who donates a car you had been holding for sale to customers. See Inventory , later.

If you donate taxidermy property to a qualified organization, your deduction is limited to your basis in the property or its FMV, whichever is less. This applies if you prepared, stuffed, or mounted the property or paid or incurred the cost of preparing, stuffing, or mounting the property.

Your basis for this purpose includes only the cost of preparing, stuffing, and mounting the property. Your basis doesn't include transportation or travel costs. It also doesn't include the direct or indirect costs for hunting or killing an animal, such as equipment costs. In addition, it doesn't include the value of your time.

Taxidermy property means any work of art that:

Is the reproduction or preservation of an animal, in whole or in part;

Is prepared, stuffed, or mounted to recreate one or more characteristics of the animal; and

Contains a part of the body of the dead animal.

If you contribute property subject to a debt (such as a mortgage), you must reduce the FMV of the property by:

Any allowable deduction for interest you paid (or will pay) that is attributable to any period after the contribution, and

If the property is a bond, the lesser of:

Any allowable deduction for interest you paid (or will pay) to buy or carry the bond that is attributable to any period before the contribution; or

The interest, including bond discount, receivable on the bond that is attributable to any period before the contribution, and that isn't includible in your income due to your accounting method.

If the recipient (or another person) assumes the debt, you must also reduce the FMV of the property by the amount of the outstanding debt assumed.

The amount of the debt is also treated as an amount realized on the sale or exchange of property for purposes of figuring your taxable gain (if any). For more information, see Bargain Sales under Giving Property That Has Increased in Value , later.

Generally, you can't deduct a charitable contribution of less than your entire interest in property.

A contribution of the right to use property is a contribution of less than your entire interest in that property and isn't deductible.

You own a 10-story office building and donate rent-free use of the top floor to a qualified organization. Because you still own the building, you have contributed a partial interest in the property and can't take a deduction for the contribution.

You own a vacation home at the beach and sometimes rent it to others. For a fundraising auction at church, you donated the right to use the vacation home for 1 week. At the auction, the church received and accepted a bid equal to the fair rental value of the home for 1 week. You can't claim a deduction because of the partial interest rule. The auction winner can't claim a deduction either, because of the received benefit equal to the amount of the auction winner’s payment. See Contributions From Which You Benefit , earlier.

You can deduct a charitable contribution of a partial interest in property only if that interest represents one of the following items.

A remainder interest in your personal home or farm. A remainder interest is one that passes to a beneficiary after the end of an earlier interest in the property.

Example. You keep the right to live in your home during your lifetime and give your church a remainder interest that begins upon your death. You can deduct the value of the remainder interest.

An undivided part of your entire interest. This must consist of a part of every substantial interest or right you own in the property and must last as long as your interest in the property lasts. But see Fractional Interest in Tangible Personal Property , later.

Example. You contribute voting stock to a qualified organization but keep the right to vote the stock. The right to vote is a substantial right in the stock. You haven't contributed an undivided part of your entire interest and can't deduct your contribution.

A partial interest that would be deductible if transferred to certain types of trusts.

A qualified conservation contribution (defined later).

For information about how to figure the value of a contribution of a partial interest in property, see Partial Interest in Property Not in Trust in Pub. 561.

Fractional Interest in Tangible Personal Property

You can't deduct a charitable contribution of a fractional interest in tangible personal property unless all interests in the property are held immediately before the contribution by:

You and the qualifying organization receiving the contribution.

If you make an additional contribution later, the FMV of that contribution will be determined by using the smaller of:

The FMV of the property at the time of the initial contribution, or

The FMV of the property at the time of the additional contribution.

Tangible personal property is defined later under Future Interest in Tangible Personal Property . A fractional interest in property is an undivided portion of your entire interest in the property.

An undivided one-quarter interest in a painting that entitles an art museum to possession of the painting for 3 months of each year is a fractional interest in the property.

You must recapture your charitable contribution deduction by including it in your income if both of the following statements are true.

You contributed a fractional interest in tangible personal property after August 17, 2006.

You don't contribute the rest of your interests in the property to the original recipient or, if it no longer exists, another qualified organization on or before the earlier of:

The date that is 10 years after the date of the initial contribution, or

The date of your death.

Recapture is also required if the qualified organization hasn't taken substantial physical possession of the property and used it in a way related to the organization's purpose during the period beginning on the date of the initial contribution and ending on the earlier of:

If you must recapture your deduction, you must also pay interest and an additional tax equal to 10% of the amount recaptured.

A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes.

For purposes of a qualified conservation contribution, a qualified organization is:

A governmental unit;

A publicly supported charity; or

An organization controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity.

A publicly supported charity is an organization of the type described in (1) under Types of Qualified Organizations , earlier, that normally receives a substantial part of its support, other than income from its exempt activities, from direct or indirect contributions from the general public or from governmental units.

This is any of the following interests in real property.

Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals).

A remainder interest.

A restriction (granted in perpetuity) on the use that may be made of the real property, such as a conservation easement.

Your contribution must be made only for one of the following conservation purposes.

Preserving land areas for outdoor recreation by, or for the education of, the general public.

Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem.

Preserving open space, including farmland and forest land, if it yields a significant public benefit. The open space must be preserved either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy.

Preserving a historically important land area or a certified historic structure.

A certified historic structure is a building that is listed individually in the National Register of Historic Places (National Register building) or a building that is located in a registered historic district and has been certified by the Secretary of the Interior as contributing to the historic significance of that district (historically significant building). If the individual listing in the National Register of Historic Places consists of a more than one building (e.g., a house, a garage, a mill complex, etc.), the Secretary of the Interior may have to certify which of the multiple buildings qualify as certified historic structures.

A registered historic district is any district listed in the National Register of Historic Places. A state or local historic district may also qualify as a registered historic district if the district and the enabling structures are certified by the Secretary of the Interior. You can claim a deduction for a qualified conservation contribution of a historically significant building. This contribution can take the form of a qualified real property interest that is an easement or other restriction on all or part of the exterior or interior of the building. You can claim a deduction for a qualified conservation contribution of a historically significant building. This contribution can take the form of a contribution of a qualified real property interest that is an easement or other restriction on all or part of the interior of the building. However, you cannot claim a deduction for a contribution of a qualified real property interest that is an easement or other restriction on the exterior of the building unless the easement or other restriction meets all of the following conditions:

The restriction must preserve the entire exterior of the building (including its front, sides, rear, and height) and must prohibit any change to the exterior of the building that is inconsistent with its historical character.

You and the organization receiving the contribution must enter into a written agreement certifying, under penalty of perjury, that the organization:

Is a qualified organization with a purpose of environmental protection, land conservation, open space preservation, or historic preservation; and

Has the resources to manage and enforce the restriction and a commitment to do so.

You must include with your return:

Form 8283, completed as specified in the instructions to Form 8283;

A signed Qualified appraisal , performed by a Qualified appraiser ;

Photographs of the building's entire exterior;

A description of all restrictions on development of the building, such as zoning laws and restrictive covenants; and

The National Park Service project number (NPS #), if applicable. See the Form 8283 instructions for more information.

If you claim a deduction of more than $10,000 and donated an exterior restriction on a National Register building or historic district building, your deduction won’t be allowed unless you pay a $500 filing fee. See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions.

If you claimed the rehabilitation credit for a National Register building or historically significant building for any of the 5 years before the year of the qualified conservation contribution, your charitable deduction is reduced. For more information, see Form 3468, Investment Credit, and Internal Revenue Code section 170(f)(14). For more information on how an NPS # applies to a certified historic structure, see Easements on certified historic structures , in the instructions for Form 8283.

Subject to three exceptions, if you are a member of a pass-through entity (such as a partner in a partnership or a shareholder in an S corporation) and the amount of a qualified conservation contribution by the pass-through entity exceeds 2.5 times the sum of each member’s relevant basis, the contribution is not treated as a qualified conservation contribution and no one may claim a deduction for the contribution. Thus, your charitable conservation contribution deduction is disallowed.

The pass-through entity must determine each member’s relevant basis. Relevant basis is, with respect to any member, the portion of the member’s modified basis in its interest in the pass-through entity which is allocable to the portion of the real property with respect to which the qualified conservation contribution is made. Modified basis is, with respect to any member, the adjusted basis in the member’s interest in the pass-through entity as determined:

immediately before the qualified conservation contribution;

without regard to the member’s share of any liabilities of the pass-through entity; and

by the pass-through entity after taking into account the adjustments described in items (1) and (2).

As before mentioned, there are three exceptions to this disallowance.

Exception 1—Contribution outside three-year period. This disallowance does not apply if the qualified conservation contribution is made at least three years after the latest of:

the last date on which the pass-through entity acquired any portion of the real property;

the last date any members of the pass-through entity acquired any interest in the pass-through entity; and

if the interest in the donating pass-through entity is held through one or more pass-through entities:

the last date any such pass-through entity acquired any interest in any other such pass-through entity, and

the last date on which any member in any such pass-through entity acquired any interest in such pass-through entity.

Exception 2—Family partnership. This disallowance does not apply to a qualified conservation contribution made by a family pass-through entity. Family pass-through entities are pass-through entities in which substantially all of the interests are held, directly or indirectly, by an individual and members of the family of such individual. For these purposes, members of the family are defined as the spouse of such individual and any individual described in Internal Revenue Code section 152(d)(2)(A)–(G).

Exception 3—Historic structure. This disallowance does not apply if the purpose of the qualified conservation contribution is the preservation of a certified historic structure. See Certified historic structures , earlier.

For information about determining the FMV of qualified conservation contributions, see Pub. 561 and the instructions for Form 8283. For information about the limits that apply to deductions for this type of contribution, see Limits on Deductions , later. For more information about qualified conservation contributions, see Regulations section 1.170A-14.

Future Interest in Tangible Personal Property

You can't deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. But see Fractional Interest in Tangible Personal Property , earlier, and Tangible personal property put to unrelated use , later.

Related persons include your spouse, children, grandchildren, sibling(s), and parents. Related organizations may include a partnership or corporation in which you have an interest, or an estate or trust with which you have a connection.

This is any property, other than land or buildings, that can be seen or touched. It includes furniture, books, jewelry, paintings, and cars.

This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law.

You own an antique car that you contribute to a museum. You give up ownership, but retain the right to keep the car in your garage with your personal collection. Because you keep an interest in the property, you can't deduct the contribution. If you turn the car over to the museum in a later year, giving up all rights to its use, possession, and enjoyment, you can take a deduction for the contribution in that later year.

If you contribute inventory (property you sell in the course of your business), the amount you can deduct is the smaller of its FMV on the day you contributed it or its basis. The basis of contributed inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. You must remove the amount of your charitable contribution deduction from your opening inventory. It isn't part of the cost of goods sold.

If the cost of donated inventory isn't included in your opening inventory, the inventory's basis is zero and you can't claim a charitable contribution deduction. Treat the inventory's cost as you would ordinarily treat it under your method of accounting. For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year.

A special rule applies to certain donations of food inventory. See Food Inventory , later.

Patents and Other Intellectual Property

If you donate intellectual property to a qualified organization, your deduction is limited to the basis of the property or the FMV of the property, whichever is smaller. Intellectual property means any of the following.

Copyrights (other than a copyright described in Internal Revenue Code sections 1221(a)(3) or 1231(b)(1)(C)).

Trademarks.

Trade names.

Trade secrets.

Software (other than software described in Internal Revenue Code section 197(e)(3)(A)(i)).

Other similar property or applications or registrations of such property.

You may be able to claim additional charitable contribution deductions in the year of the contribution and years following, based on the income, if any, from the donated property.

The following table shows the percentage of income from the property that you can deduct for each of your tax years ending on or after the date of the contribution. In the table, “tax year 1,” for example, means your first tax year ending on or after the date of the contribution. However, you can take the additional deduction only to the extent the total of the amounts figured using this table is more than the amount of the deduction claimed for the original donation of the property.

After the legal life of the intellectual property ends, or after the 10th anniversary of the donation, whichever is earlier, no additional deduction is allowed.

The additional deductions can't be taken for intellectual property donated to certain private foundations.

You must inform the organization at the time of the donation that you intend to treat the donation as a contribution subject to the provisions just discussed.

The organization is required to file an information return showing the income from the property, with a copy to you. This is done on Form 8899, Notice of Income From Donated Intellectual Property.

Determining FMV

This section discusses general guidelines for determining the FMV of various types of donated property. Pub. 561 contains a more complete discussion.

FMV is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.

The FMV of used clothing and other personal items is usually far less than the price you paid for them. There are no fixed formulas or methods for finding the value of items of clothing.

You should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops.

Also see Clothing and Household Items , earlier.

You donated a coat to a thrift store operated by a place of worship. You paid $300 for the coat 3 years ago. Similar coats in the thrift store sell for $50. The FMV of the coat is $50. Your donation is limited to $50.

The FMV of used household items, such as furniture, appliances, and linens, is usually much lower than the price paid when new. These items may have little or no market value because they are in a worn condition, out of style, or no longer useful. For these reasons, formulas (such as using a percentage of the cost to buy a new replacement item) aren't acceptable in determining value.

You should support your valuation with photographs, canceled checks, receipts from your purchase of the items, or other evidence. Magazine or newspaper articles and photographs that describe the items and statements by the recipients of the items are also useful. Don't include any of this evidence with your tax return.

If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art in Pub. 561.

Form 8283, Section B, must be completed and the Form 8283 attached to the tax return if you are contributing a single article of clothing or household item over $500 that is not in good used condition. See the Form 8283 instructions for more information.

If you contribute a car, boat, or airplane to a qualified organization, you must determine its FMV.

You don’t need a written appraisal for a qualified vehicle — such as a car, boat, or airplane — if your deduction for the qualified vehicle is limited to the gross proceeds from its sale and you obtained a contemporaneous written acknowledgment (CWA) , defined later. If you donate a qualified vehicle with a claimed value of more than $500, you can’t claim a deduction unless you attach to Form 8283 a copy of the CWA you received from the donee organization. See Qualified Vehicle Donations in the Instructions for Form 8283.

Except for small, inexpensive boats, the valuation of boats should be based on an appraisal by a marine surveyor or appraiser because the physical condition is critical to the value.

Certain commercial firms and trade organizations publish used car pricing guides, commonly called “blue books,” containing complete dealer sale prices or dealer average prices for recent model years. The guides may be published monthly or seasonally, and for different regions of the country. These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. The prices aren't “official” and these publications aren't considered an appraisal of any specific donated property. But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area.

These publications are sometimes available from public libraries, or from the loan officer at a bank, credit union, or finance company. You can also find used car pricing information on the Internet.

To find the FMV of a donated car, use the price listed in a used car guide for a private party sale, not the dealer retail value. However, the FMV may be less if the car has engine trouble, body damage, high mileage, or any type of excessive wear. The FMV of a donated car is the same as the price listed in a used car guide for a private party sale only if the guide lists a sales price for a car that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated car.

You donate a used car in poor condition to a local high school for use by students studying car repair. A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. However, the guide shows the price for a private party sale of the car is only $750. The FMV of the car is considered to be $750.

If you contribute a large number of the same item, FMV is the price at which comparable numbers of the item are being sold.

You purchase 500 copies of a religious book for $1,000. The person who sells them to you says the retail value of these books is $3,000. If you contribute the books to a qualified organization, you can claim a deduction only for the price at which similar numbers of the same books are currently being sold. Your charitable contribution is $1,000, unless you can show that similar numbers of that book were selling at a different price at the time of the contribution.

If you contribute property with an FMV that is less than your basis in it, your deduction is limited to its FMV. You can't claim a deduction for the difference between the property's basis and its FMV.

Your basis in property is generally what you paid for it. If you need more information about basis, see Pub. 551, Basis of Assets. You may want to see Pub. 551 if you contribute property that you:

Received as a gift or inheritance;

Used in a trade, business, or activity conducted for profit; or

Claimed a casualty loss deduction for.

Common examples of property that decrease in value include clothing, furniture, appliances, and cars.

Giving Property That Has Increased in Value

If you contribute property with an FMV that is more than your basis in it, you may have to reduce the FMV by the amount of appreciation (increase in value) when you figure your deduction.

Your basis in property is generally what you paid for it. If you need more information about basis, see Pub. 551.

Different rules apply to figuring your deduction, depending on whether the property is:

Ordinary income property, or

Capital gain property.

Ordinary Income Property

Property is ordinary income property if you would have recognized ordinary income or short-term capital gain had you sold it at FMV on the date it was contributed. Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets (defined later, under Capital Gain Property ) held 1 year or less.

Property used in a trade or business is considered ordinary income property to the extent of any gain that would have been treated as ordinary income because of depreciation had the property been sold at its FMV at the time of contribution. See chapter 3 of Pub. 544, Sales and Other Dispositions of Assets, for the kinds of property to which this rule applies.

The amount you can deduct for a contribution of ordinary income property is its FMV minus the amount that would be ordinary income or short-term capital gain if you sold the property for its FMV. Generally, this rule limits the deduction to your basis in the property.

You donate stock you held for 5 months to your synagogue. The FMV of the stock on the day you donate it is $1,000, but you paid only $800 (your basis). Because the $200 of appreciation would be short-term capital gain if you sold the stock, your deduction is limited to $800 (FMV minus the appreciation).

Don't reduce your charitable contribution if you include the ordinary or capital gain income in your gross income in the same year as the contribution. See Ordinary or capital gain income included in gross income under Capital Gain Property next, if you need more information.

Capital Gain Property

Property is capital gain property if you would have recognized long-term capital gain had you sold it at FMV on the date of the contribution. Capital gain property includes capital assets held more than 1 year.

Capital assets include most items of property you own and use for personal purposes or investment. Examples of capital assets are stocks, bonds, jewelry, coin or stamp collections, and cars or furniture used for personal purposes.

For purposes of figuring your charitable contribution, capital assets also include certain real property and depreciable property used in your trade or business and, generally, held more than 1 year. You may, however, have to treat this property as partly ordinary income property and partly capital gain property. See Property used in a trade or business under Ordinary Income Property , earlier.

Real property is land and generally anything built on, growing on, or attached to land.

Depreciable property is property used in business or held for the production of income and for which a depreciation deduction is allowed.

For more information about what is a capital asset, see chapter 2 of Pub. 544.

When figuring your deduction for a contribution of capital gain property, you can generally use the FMV of the property.

However, in certain situations, you must reduce the FMV by any amount that would have been long-term capital gain if you had sold the property for its FMV. Generally, this means reducing the FMV to the property's cost or other basis. You must do this if:

The property (other than qualified appreciated stock) is contributed to certain private nonoperating foundations,

You choose the 50% limit instead of the 30% limit for capital gain property given to 50% limit organizations, discussed later,

The contributed property is intellectual property (as defined earlier under Patents and Other Intellectual Property ),

The contributed property is certain taxidermy property, as explained earlier, or

The contributed property is tangible personal property (defined earlier) that:

Is put to an unrelated use (defined later) by the charity, or

Has a claimed value of more than $5,000 and is sold, traded, or otherwise disposed of by the qualified organization during the year in which you made the contribution, and the qualified organization hasn't made the required certification of exempt use (such as on Form 8282, Donee Information Return, Part IV). See also Recapture if no exempt use , later.

The reduced deduction applies to contributions to all private nonoperating foundations other than those qualifying for the 50% limit, discussed later.

However, the reduced deduction doesn't apply to contributions of qualified appreciated stock. Qualified appreciated stock is any stock in a corporation that is capital gain property and for which market quotations are readily available on an established securities market on the day of the contribution. But stock in a corporation doesn't count as qualified appreciated stock to the extent you and your family contributed more than 10% of the value of all the outstanding stock in the corporation.

Tangible personal property is defined earlier under Future Interest in Tangible Personal Property .

The term “unrelated use” means a use unrelated to the exempt purpose or function of the qualified organization. For a governmental unit, it means the use of the contributed property for other than exclusively public purposes.

If a painting contributed to an educational institution is used by that organization for educational purposes by being placed in its library for display and study by art students, the use isn't an unrelated use. But if the painting is sold and the proceeds are used by the organization for educational purposes, the use is an unrelated use.

Your deduction for a contribution of tangible personal property may be limited. See (5) under Exceptions , earlier.

You must recapture part of your charitable contribution deduction by including it in your income if all the following statements are true.

You donate tangible personal property with a claimed value of more than $5,000, and your deduction is more than your basis in the property.

The organization sells, trades, or otherwise disposes of the property after the year it was contributed but within 3 years of the contribution.

The organization doesn't provide a written statement (such as on Form 8282, Part IV), signed by an officer of the organization under penalty of perjury, that either:

Certifies its use of the property was substantial and related to the organization's purpose, or

Certifies its intended use of the property became impossible.

If all the preceding statements are true, include in your income:

The deduction you claimed for the property, minus

Your basis in the property when you made the contribution.

You don't reduce your charitable contribution if you include the ordinary or capital gain income in your gross income in the same year as the contribution. This may happen when you transfer installment or discount obligations or when you assign income to a qualified organization. If you contribute an obligation received in a sale of property that is reported under the installment method, see Pub. 537, Installment Sales.

You donate an installment note to a qualified organization. The note has an FMV of $10,000 and a basis to you of $7,000. As a result of the donation, you have a short-term capital gain of $3,000 ($10,000 − $7,000), which you include in your income for the year. Your charitable contribution is $10,000.

Food Inventory

Special rules apply to certain donations of food inventory to a qualified organization. These rules apply if all the following conditions are met.

You made a contribution of apparently wholesome food from your trade or business. Apparently wholesome food is food intended for human consumption that meets all quality and labeling standards imposed by federal, state, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions.

The food is to be used only for the care of the ill, the needy, or infants.

The use of the food is related to the organization's exempt purpose or function.

The organization doesn't transfer the food for money, other property, or services.

You receive a written statement from the organization stating it will comply with requirements (2), (3), and (4).

The organization isn't a private nonoperating foundation.

The food satisfies any applicable requirements of the Federal Food, Drug, and Cosmetic Act and regulations on the date of transfer and for the previous 180 days.

If all the conditions just described are met, use the following worksheet to figure your deduction.

When determining the FMV to enter on line 1 of the worksheet, take into account the price at which the same or substantially the same food items (as to both type and quality) were sold by you at the time of the contribution. Don’t reduce this amount because the food wasn’t or couldn’t be sold by reason of your internal standards, lack of market, or similar circumstances. Also, don’t reduce this amount even though you produced the food exclusively for the purpose of transferring the food to a qualified organization.

If you don’t account for inventories under section 471 and you aren’t required to capitalize indirect costs under section 263A, you may elect, solely for the purpose of line 2 of the worksheet, to treat the basis of any apparently wholesome food as being equal to 25% of the FMV of such food.

Enter on line 11 of the worksheet, 15% of your net income for the year from all sole proprietorships, S corporations, or partnerships (or other entity that isn't a C corporation) from which contributions of food inventory were made. Figure net income before any deduction for a charitable contribution of food inventory.

If you made more than one contribution of food inventory, complete a separate worksheet for each contribution. Complete lines 11 and 12 on only one worksheet. On that worksheet, complete line 11. Then compare line 11 and the total of the line 10 amounts on all worksheets and enter the smaller of those amounts on line 12.

If line 11 is smaller than line 10, you can carry over the excess as a qualifying food inventory contribution to the following year. You may be able to include the excess in your charitable contribution deduction for the food in each of the next 5 years in order of time until it is used up, but not beyond that time.

See Inventory , earlier, for information about determining the basis of donated inventory and the effect on cost of goods sold. For additional details, see section 170(e)(3) of the Internal Revenue Code.

Bargain Sales

A bargain sale of property is a sale or exchange for less than the property's FMV. A bargain sale to a qualified organization is partly a charitable contribution and partly a sale or exchange.

The part of the bargain sale that is a sale or exchange may result in a taxable gain. For more information on figuring the amount of any taxable gain, see Bargain sales to charity in chapter 1 of Pub. 544.

Figure the amount of your charitable contribution in three steps.

Subtract the amount you received for the property from the property's FMV at the time of sale. This gives you the FMV of the contributed part.

Find the adjusted basis of the contributed part. It equals:

Adjusted basis of entire property x fair market value of contributed part ÷ fair market value of entire property

Calculation

Summary: This is the calculation used to figure the adjusted basis of the contributable amount of property. To calculate: Multiply the Adjusted basis of entire property by (the FMV of contributed part divided by the FMV of entire property).

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Determine whether the amount of your charitable contribution is the FMV of the contributed part (which you found in Step 1 ) or the adjusted basis of the contributed part (which you found in Step 2 ). Generally, if the property sold was capital gain property, your charitable contribution is the FMV of the contributed part. If it was ordinary income property, your charitable contribution is the adjusted basis of the contributed part. See Ordinary Income Property and Capital Gain Property , both earlier, for more information.

You sell ordinary income property with an FMV of $10,000 to a mosque for $2,000. Your basis is $4,000 and your AGI is $20,000. You make no other contributions during the year. The FMV of the contributed part of the property is $8,000 ($10,000 − $2,000). The adjusted basis of the contributed part is $3,200 ($4,000 × ($8,000 ÷ $10,000)). Because the property is ordinary income property, your charitable deduction is limited to the adjusted basis of the contributed part. You can deduct $3,200.

You may be liable for a penalty if you overstate the value or adjusted basis of contributed property.

The penalty is 20% of the amount by which you underpaid your tax because of the overstatement, if:

The value or adjusted basis claimed on your return is 150% or more of the correct amount, and

You underpaid your tax by more than $5,000 because of the overstatement.

The penalty is 40%, rather than 20%, if:

The value or adjusted basis claimed on your return is 200% or more of the correct amount, and

When To Deduct

You can deduct your contributions only in the year you actually make them in cash or other property (or in a later carryover year, as explained under How To Figure Your Deduction When Limits Apply , later). This applies whether you use the cash or an accrual method of accounting.

Usually, you make a contribution at the time of its unconditional delivery.

A check you mail to a charity is considered delivered on the date you mail it.

Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account.

Contributions charged on your bank credit card are deductible in the year you make the charge.

Contributions made through a pay-by-phone account are considered delivered on the date the financial institution pays the amount. This date should be shown on the statement the financial institution sends you.

A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity's agent. However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution isn't delivered until the date the stock is transferred on the books of the corporation.

If you issue and deliver a promissory note to a charity as a contribution, it isn't a contribution until you make the note payments.

If you grant a charity an option to buy real property at a bargain price, it isn't a contribution until the charity exercises the option.

If you contribute borrowed funds, you can deduct the contribution in the year you deliver the funds to the charity, regardless of when you repay the loan.

If your contribution depends on a future act or event to become effective, you can't take a deduction unless there is only a negligible chance the act or event won't take place.

If your contribution would be undone by a later act or event, you can't take a deduction unless there is only a negligible chance the act or event will take place.

You contribute cash to a local school board, which is a political subdivision of a state, to help build a school gym. The school board will refund the money to you if it doesn't collect enough to build the gym. You can't deduct your contribution until there is no chance (or only a negligible chance) of a refund.

You donate land to a city for as long as the city uses it for a public park. The city plans to use the land for a park, and there is no chance (or only a negligible chance) of the land being used for any different purpose. You can deduct your charitable contribution in the year you make the contribution.

Limits on Deductions

The amount you can deduct for charitable contributions is generally limited to no more than 60% of your AGI. Your deduction may be further limited to 50%, 30%, or 20% of your AGI, depending on the type of property you give and the type of organization you give it to. Starting with tax year 2022, your deduction for cash contributions is limited to 60% of your AGI minus your deductions for all other contributions. These limits are described in detail in this section.

Your AGI is the amount on Form 1040, line 11.

If your contributions are more than any of the limits that apply, see Carryovers under How To Figure Your Deduction When Limits Apply , later.

Amounts you spend performing services for a charitable organization may be deductible as a contribution to a qualified organization. If so, your deduction is subject to the limit applicable to donations to that organization. For example, the 30% limit applies to amounts you spend on behalf of a private nonoperating foundation.

For the purpose of applying the deduction limits to your charitable contributions, qualified organizations can be divided into two categories.

The first category includes only the following types of qualified organizations. (These organizations are also sometimes referred to as “50% limit organizations.”)

Churches and conventions or associations of churches.

Educational organizations with a regular faculty and curriculum that normally have a regularly enrolled student body attending classes on site.

Hospitals and certain medical research organizations associated with these hospitals.

Organizations that are operated only to receive, hold, invest, and administer property and to make expenditures to or for the benefit of state and municipal colleges and universities and that normally receive substantial support from the United States or any state or their political subdivisions, or from the general public.

Publicly supported charities, defined earlier under Qualified Conservation Contribution .

Organizations that may not qualify as “publicly supported” but that meet other tests showing they respond to the needs of the general public, not a limited number of donors or other persons. They must normally receive more than one-third of their support either from organizations described in (1) through (6), or from persons other than “disqualified persons.”

Most organizations operated or controlled by, and operated for the benefit of, those organizations described in (1) through (7).

Private operating foundations.

Private nonoperating foundations that make qualifying distributions of 100% of contributions within 2½ months following the year they receive the contribution. A deduction for charitable contributions to any of these private nonoperating foundations must be supported by evidence from the foundation confirming it made the qualifying distributions timely. Attach a copy of this supporting data to your tax return.

A private foundation whose contributions are pooled into a common fund, if the foundation would be described in (8) but for the right of substantial contributors to name the public charities that receive contributions from the fund. The foundation must distribute the common fund's income within 2½ months following the tax year in which it was realized and must distribute the corpus not later than 1 year after the donor's death (or after the death of the donor's surviving spouse if the spouse can name the recipients of the corpus).

You can ask any organization whether it is a 50% limit organization, and most will be able to tell you. Also see How to check whether an organization can receive deductible charitable contributions , earlier.

The second category includes any type of qualified organization that isn’t in the first category.

The limit that applies to a contribution depends on the type of property you give and which category of qualified organization you give it to. The amount of a contribution you can deduct is generally limited to a percentage of your AGI, but may be further reduced if you make contributions that are subject to more than one of the limits discussed in this section.

Your total deduction of charitable contributions can’t exceed your AGI. If your contributions are subject to more than one of the limits, you include all or part of each contribution in a certain order, carrying over any excess to a subsequent year (if allowed). See How To Figure Your Deduction When Limits Apply and Carryovers , later, for more information about ordering and carryovers.

Limit based on 100% of AGI

If you are a qualified farmer or rancher, your deduction for a qualified conservation contribution (QCC) is limited to 100% of your AGI minus your deduction for all other charitable contributions. However, if the donated property is used in agriculture or livestock production (or is available for such production), the contribution must be subject to a restriction that the property remain available for such production. If not, the limit is 50%. For more information about applying the 50% limit to a QCC, see Qualified conservation contributions , later, under Limits based on 50% of AGI .

You are a qualified farmer or rancher if your gross income from the trade or business of farming is more than 50% of your gross income for the year.

Limit based on 60% of AGI

If you make cash contributions during the year to an organization described earlier under First category of qualified organizations (50% limit organizations) , your deduction for the cash contributions is 60% of your AGI. See Cash Contributions for what is included in cash contributions.

This 60% limit doesn’t apply to noncash charitable contributions. See Noncash contributions to 50% limit organizations , later, if you contribute something other than cash to a 50% limit organization.

You gave your temple a $200 cash contribution. The limit based on 60% of AGI will apply to the cash contribution to the temple because it is an organization described earlier under First category of qualified organizations (50% limit organizations) and because the contribution was cash.

You donated clothing to your synagogue with an FMV of $200. The limit based on 60% of AGI doesn’t apply because the contribution is not cash. Instead, a limit based on 50% of AGI discussed later will apply to the contribution to the synagogue because it is an organization described earlier under First category of qualified organizations (50% limit organizations) .

A 30% limit applies to cash contributions that are “for the use of” the qualified organizations instead of “to” the qualified organization. A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. See Contributions to the second category of qualified organizations or for the use of any qualified organization , later, under Limits based on 30% of AGI , for more information.

Limits based on 50% of AGI

There are two 50% limits that may apply to your contributions.

If you make noncash contributions to organizations described earlier under First category of qualified organizations (50% limit organizations) , your deduction for the noncash contributions is limited to 50% of your AGI minus your cash contributions subject to the 60% limit.

A 30% limit applies to noncash contributions of capital gain property if you figure your deduction using FMV without reduction for appreciation. See Certain capital gain property contributions to 50% limit organizations , later, under Limits based on 30% of AGI , for more information.

A 20% or 30% limit applies to noncash contributions that are “for the use of” the qualified organization instead of “to” the qualified organization. A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. If the noncash contribution is capital gain property, see Limit based on 20% of AGI , later, for more information; otherwise, see Contributions to the second category of qualified organizations or for the use of any qualified organization , later, under Limits based on 30% of AGI , for more information.

Your deduction for qualified conservation contributions (QCCs) is limited to 50% of your AGI minus your deduction for all other charitable contributions.

Limits Based on 30% of AGI

These are two 30% limits that may apply to your contributions. The 30% limit for capital gain property contributions to a 50% limit organization is separate from the 30% limit that applies to your other contributions. Both are separately reduced by contributions made to a 50% limit organization, but the amount allowed after applying one of the 30% limits doesn't reduce the amount allowed after applying the other 30% limit. However, as a result of applying the separate limits, the total contributions subject to a 30% limit will never be more than 50% of your AGI.

Your AGI is $50,000. During the year, you gave capital gain property with an FMV of $15,000 to an organization described earlier under First category of qualified organizations (50% limit organizations) . You don’t choose to reduce the property’s FMV by its appreciation in value. You also gave $10,000 cash to a qualified organization that is described earlier under Second category of qualified organizations (meaning it isn’t a 50% limit organization). The $15,000 contribution of capital gain property is subject to one 30% limit and the $10,000 cash contribution is subject to the other 30% limit. The $10,000 cash contribution is fully deductible because the contribution is not more than the smaller of (i) 30% of your AGI ($15,000) and (ii) 50% of your AGI minus all contributions to a 50% limit organization ($25,000−$15,000 = $10,000). The $15,000 is also fully deductible because the contribution is not more than 30% of your AGI minus all contributions to a 50% limit organization subject to the 60% or 50% limit (other than qualified conservation contributions) ($25,000−$10,000 = $15,000). Neither amount is reduced by the other, so the total deductible contribution is $25,000 (which is also not more than 50% of your AGI).

If you make cash contributions or noncash contributions (other than capital gain property) during the year (1) to an organization described earlier under Second category of qualified organizations , or (2) “for the use of” any qualified organization, your deduction for those contributions is limited to 30% of your AGI, or if less, 50% of your AGI minus all your contributions to 50% limit organizations (other than contributions subject to a 100% limit or qualified conservation contributions). For this purpose, contributions to 50% limit organizations include all capital gain property contributions to a 50% limit organization (other than qualified conservation contributions), even those that are subject to the 30% limit, discussed later.

A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement.

If you make a contribution of capital gain property to an organization other than a 50% limit organization or “for the use of” any qualified organization, see Limit based on 20% of AGI , later.

Deductible amounts you spend on behalf of a student living with you are subject to this 30% limit. These amounts are considered a contribution for the use of a qualified organization. See Expenses Paid for Student Living With You , earlier, for more information.

Your noncash contributions of capital gain property to 50% limit organizations is limited to 30% of your AGI minus all your contributions to 50% limit organizations that are subject to the 60% and 50% limits (other than qualified conservation contributions). The limit that applies to capital gain property contributions to 50% limit organizations doesn’t apply to qualified conservation contributions. If you are making a qualified conservation contribution (QCC), see Qualified conservation contributions and Qualified conservation contributions of farmers and ranchers , earlier, for the limits to apply to a QCC.

You may choose the 50% limit for contributions of capital gain property to organizations described earlier under First category of qualified organizations (50% limit organizations) instead of the 30% limit that would otherwise apply. See Capital gain property election , later, under How To Figure Your Deduction When Limits Apply , for more information about making this election and how to adjust the amount of your contribution.

If you make noncash contributions of capital gain property during the year (1) to an organization described earlier under Second category of qualified organizations , or (2) “for the use of” any qualified organization, your deduction for those contributions is limited to 20% of your AGI or, if less, the smallest of the following.

30% of your AGI minus all your contributions that are subject to a limit based on 30% of AGI.

30% of your AGI minus all your capital gain contributions that are subject to the limit based on 30% of AGI.

50% of your AGI minus all contributions subject to the limits based on 60%, 50%, and 30% of AGI (other than qualified conservation contributions).

How To Figure Your Deduction When Limits Apply

If your contributions are subject to more than one of the limits discussed earlier, use the following steps to figure the amount of your contributions that you can deduct.

Cash contributions subject to the limit based on 60% of AGI. Deduct the contributions that don't exceed 60% of your AGI.

Noncash contributions (other than qualified conservation contributions) subject to the limit based on 50% of AGI. Deduct the contributions that don’t exceed 50% of your AGI minus your cash contributions to a 50% limit organization.

Cash and noncash contributions (other than capital gain property) subject to the limit based on 30% of AGI. Deduct the contributions that don’t exceed the smaller of:

30% of your AGI, or

50% of your AGI minus your contributions to a 50% limit organization (other than qualified conservation contributions), including capital gain property subject to the limit based on 30% of AGI.

Contributions of capital gain property subject to the limit based on 30% of AGI. Deduct the contributions that don’t exceed the smaller of:

50% of your AGI minus your contributions subject to the limits based on 60% or 50% of AGI (other than qualified conservation contributions).

Contributions of capital gain property subject to the limit based on 20% of AGI. Deduct the contributions that don’t exceed the smaller of:

20% of your AGI,

30% of your AGI minus your contributions of capital gain property subject to the limit based on 30% of AGI,

30% of your AGI minus your other contributions subject to the limit based on 30% of AGI, or

50% of your AGI minus your contributions subject to the limits based on 60%, 50%, and 30% of AGI (other than qualified conservation contributions).

Qualified conservation contributions subject to the limit based on 50% of AGI. Deduct the contributions that don’t exceed 50% of your AGI minus any deductible contributions figured in (1) through (5).

Qualified conservation contributions of farmers and ranchers subject to the limit based on 100% of AGI. Deduct the contributions that don't exceed 100% of your AGI minus any deductible contributions figured in (1) through (6).

Carryovers of qualified contributions for relief efforts in a qualified disaster area subject to the limit based on 60% of AGI. Deduct the carryover contributions that don't exceed 60% of your AGI minus all your other deductible contributions.

These steps are incorporated into Worksheet 2.

Your AGI is $50,000. In March, you gave your place of worship $2,000 cash and land with an FMV of $28,000 and a basis of $22,000. You held the land for investment purposes for more than 1 year. You don't make the capital gain property election for this year. See Capital gain property election , later. Therefore, the amount of your charitable contribution for the land would be its FMV of $28,000. You also gave $5,000 cash to a private nonoperating foundation to which the 30% limit applies.

The $2,000 cash donated to the your place of worship is considered first and is fully deductible. Your contribution to the private nonoperating foundation is considered next. Because the total of your cash contribution of $2,000 and your capital gain property of $28,000 to a 50% limit organization ($30,000) is more than $25,000 (50% of $50,000), your contribution to the private nonoperating foundation isn't deductible for the year. It can be carried over to later years. See Carryovers , later. The contribution of land is considered next. Your deduction for the land is limited to $15,000 (30% × $50,000). The unused part of the contribution ($13,000) can be carried over. For this year, your deduction is limited to $17,000 ($2,000 + $15,000).

You may choose the 50% limit for contributions of capital gain property to qualified organizations described earlier under First category of qualified organizations (50% limit organizations) instead of the 30% limit that would otherwise apply. If you make this choice, you must reduce the FMV of the property contributed by the appreciation in value that would have been long-term capital gain if the property had been sold.

This choice applies to all capital gain property contributed to 50% limit organizations during a tax year. It also applies to carryovers of this kind of contribution from an earlier tax year. For details, see Carryover of capital gain property , later.

You must make the choice on your original return or on an amended return filed by the due date for filing the original return.

In the previous example, if you choose to have the 50% limit apply to the land (the 30% capital gain property) given to your place of worship, you must reduce the FMV of the property by the appreciation in value. Therefore, the amount of your charitable contribution for the land would be its basis to you of $22,000. You add this amount to the $2,000 cash contributed to the place of worship. You can now deduct $1,000 of the amount donated to the private nonoperating foundation because the total of your contributions of cash ($2,000) and capital gain property ($22,000) to 50% limit organizations is $1,000 less than the limit based on 50% of AGI. Your total deduction for the year is $25,000 ($2,000 cash to your place of worship, $22,000 for property donated to your place of worship, and $1,000 cash to the private nonoperating foundation). You can carry over to later years the part of your contribution to the private nonoperating foundation that you couldn't deduct ($4,000).

Instructions for Worksheet 2

You can use Worksheet 2 if you made charitable contributions during the year, and one or more of the limits described in this publication under Limits on Deductions apply to you. You can't use this worksheet if you have a carryover of a charitable contribution from an earlier year. If you have a carryover from an earlier year, see Carryovers , later.

The following list gives instructions for completing the worksheet.

The terms used in the worksheet are explained earlier in this publication.

If the result on any line is less than zero, enter zero.

For contributions of property, enter the property's FMV unless you elected (or were required) to reduce the FMV as explained under Giving Property That Has Increased in Value . In that case, enter the reduced amount.

Don’t use this worksheet to figure the contributions you can deduct this year if you have a carryover of a charitable contribution from an earlier year.

You can carry over any contributions you can't deduct in the current year because they exceed the limits based on your AGI. Except for qualified conservation contributions, you may be able to deduct the excess in each of the next 5 years until it is used up, but not beyond that time.

A carryover of a qualified conservation contribution can be carried forward for 15 years.

Generally, contributions you carry over are subject to the same percentage limits in the year to which they are carried as they were in the year of the contribution. For example, contributions subject to the 20% limit in the year in which they are made are 20% limit contributions in the year to which they are carried. But see Carryover of capital gain property , later.

For each category of contributions, you deduct carryover contributions only after deducting all allowable contributions in that category for the current year. If you have carryovers from 2 or more prior years, use the carryover from the earlier year first.

A carryover of a contribution to a 50% limit organization must be used before contributions in the current year to organizations other than 50% limit organizations. See Example 2 .

Last year, you made cash contributions of $11,000 to 50% limit organizations. Because of the limit based on 60% of AGI, you deducted only $10,000 and carried over $1,000 to this year. This year, your AGI is $20,000 and you made cash contributions of $9,500 to 50% limit organizations. The limit based on 60% of AGI applies to your current year cash contribution of $9,500 and carryover contribution of $1,000. You can deduct this year’s cash contribution and your carryover cash contribution in full because your total cash contributions of $10,500 ($9,500 + $1,000) is less than $12,000 (60% of $20,000).

This year, your AGI is $24,000. You make cash contributions of $6,000 to which the 60% limit applies and $3,000 to which the 30% limit applies. You have a contribution carryover from last year of $5,000 for capital gain property contributed to a 50% limit organization and subject to the special 30% limit for contributions of capital gain property.

Your cash contribution of $6,000 is fully deductible because it is less than $14,400 (which is 60% of your AGI).

The deduction for your 30% limit contributions of $3,000 is limited to $1,000. This is the lesser of:

$7,200 (30% of $24,000), or

$1,000 ($12,000 minus $11,000).

The deduction for your $5,000 carryover is subject to the special 30% limit for contributions of capital gain property. This means it is limited to the smaller of:

$7,200 (your 30% limit), or

$5,000 ($12,000, your 50% limit, minus your allowable cash contributions to which the 60% limit applies ($6,000) and minus your allowable contribution to which the 30% limit applies ($1,000)).

Your deduction is $12,000 ($6,000 + $1,000 + $5,000). You carry over the $2,000 balance of your 30% limit contributions for this year to next year.

If you carry over contributions of capital gain property subject to the special 30% limit and you choose in the next year to use the 50% limit and take appreciation into account, you must refigure the carryover. Reduce the FMV of the property by the appreciation and reduce that result by the amount actually deducted in the previous year.

Last year, your AGI was $50,000 and you contributed capital gain property valued at $27,000 to a 50% limit organization and didn't choose to use the 50% limit. Your basis in the property was $20,000. Your deduction was limited to $15,000 (30% of $50,000), and you carried over $12,000. This year, your AGI is $60,000 and you contribute capital gain property valued at $25,000 to a 50% limit organization. Your basis in the property is $24,000 and you choose to use the 50% limit. You must refigure your carryover as if you had taken appreciation into account last year as well as this year. Because the amount of your contribution last year would have been $20,000 (the property's basis) instead of the $15,000 you actually deducted, your refigured carryover is $5,000 ($20,000 − $15,000). Your total deduction this year is $29,000 (your $24,000 current contribution plus your $5,000 carryover).

Special rules exist for computing carryovers if you:

Are married in some years but not others,

Have different spouses in different years,

Change from a separate return to a joint return in a later year,

Change from a joint return to a separate return in a later year,

Have a net operating loss,

Claim the standard deduction in a carryover year, or

Become a surviving spouse.

Substantiation Requirements

You must keep records to prove the amount of the contributions you make during the year. The kind of records you must keep depends on the amount of your contributions and whether they are:

Cash contributions,

Noncash contributions, or

Out-of-pocket expenses when donating your services.

An organization must generally give you a written statement if it receives a payment from you that is more than $75 and is partly a contribution and partly for goods or services. (See Contributions From Which You Benefit under Contributions You Can Deduct , earlier.) Keep the statement for your records. It may satisfy all or part of the recordkeeping requirements explained in the following discussions.

Cash Contributions

Cash contributions include payments made by cash, check, electronic funds transfer, online payment service, debit card, credit card, payroll deduction, or a transfer of a gift card redeemable for cash.

You can't deduct a cash contribution, regardless of the amount, unless you keep one of the following.

A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Bank records may include:

A canceled check.

A bank or credit union statement.

A credit card statement.

An electronic fund transfer receipt.

A scanned image of both sides of a canceled check obtained from a bank or credit union website.

A receipt (or a letter or other written communication such as an email) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution.

The payroll deduction records described next.

If you make a contribution by payroll deduction, you must keep:

A pay stub, Form W-2, or other document furnished by your employer that shows the date and amount of the contribution; and

A pledge card or other document prepared by or for the qualified organization that shows the name of the organization and states the organization doesn’t provide goods or services in return for any contribution made to it by payroll deduction.

Contributions of $250 or More

You can claim a deduction for a contribution of $250 or more only if you have a contemporaneous written acknowledgment of your contribution from the qualified organization or certain payroll deduction records. See Contemporaneous written acknowledgment (CWA) , later, for a description of when a written acknowledgement is considered “contemporaneous” with your contribution.

If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that lists each contribution and the date of each contribution and shows your total contributions.

In figuring whether your contribution is $250 or more, don't combine separate contributions. For example, if you gave your church $25 each week, your weekly payments don't have to be combined. Each payment is a separate contribution.

If contributions are made by payroll deduction, the deduction from each paycheck is treated as a separate contribution.

If you made a payment that is partly for goods and services, as described earlier under Contributions From Which You Benefit , your contribution is the amount of the payment that is more than the value of the goods and services.

The acknowledgment must meet these tests.

It must be written.

It must include:

The amount of cash you contributed,

Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits),

A description and good faith estimate of the value of any goods or services described in (b). If the only benefit you received was an intangible religious benefit (such as admission to a religious ceremony) that generally isn’t sold in a commercial transaction outside the donative context, the acknowledgement must say so and doesn’t need to describe or estimate the value of the benefit.

If the acknowledgment doesn't show the date of the contribution, you must also have a bank record or receipt, as described earlier, that does show the date of the contribution. If the acknowledgment shows the date of the contribution and meets the other tests just described, you don't need any other records.

Organizations typically send written acknowledgements to donors no later than January 31 of the year following the donation. For the written acknowledgement to be considered contemporaneous with the contribution it must meet both of the following requirements.

Meet all the tests described under Acknowledgment , earlier; and

You must get it on or before the earlier of:

The date you file your return for the year you make the contribution; or

The due date, including extensions, for filing the return.

If you make a contribution by payroll deduction and your employer withholds $250 or more from a single paycheck, you must keep:

A pay stub, Form W-2, or other document furnished by your employer that shows the amount withheld as a contribution; and

A pledge card or other document prepared by or for the qualified organization that shows the name of the organization and states the organization doesn't provide goods or services in return for any contribution made to it by payroll deduction.

If the pay stub, Form W-2, pledge card, or other document doesn't show the date of the contribution, you must have another document that does show the date of the contribution. If the pay stub, Form W-2, pledge card, or other document shows the date of the contribution, you don't need any other records except those just described in (1) and (2).

Noncash Contributions

Substantiation requirements for contributions not made in cash depend on whether your deduction for the contribution is:

Less than $250,

At least $250 but not more than $500,

Over $500 but not more than $5,000, or

Over $5,000.

The substantiation requirements for noncash contributions of more than $500 also apply to any return filed for any carryover year.

In figuring whether your deduction is $500 or more, combine your claimed deductions for all similar items of property donated to any qualified organization during the year.

If you received goods or services in return, as described earlier in Contributions From Which You Benefit , reduce your contribution by the value of those goods or services. If you figure your deduction by reducing the FMV of the donated property by its appreciation, as described earlier in Giving Property That Has Increased in Value , your contribution is the reduced amount.

Except as provided below, no deduction will be allowed for a noncash contribution of less than $250 unless you get and keep a receipt from the qualified organization showing:

The name and address of the qualified organization to which you contributed;

The date and location of the charitable contribution;

A description of the property in sufficient detail under the circumstances (taking into account the value of the property) for a person not generally familiar with the type of property to understand that the description is of the contributed property; and

For a security, the name of the issuer, the type of security, and whether it is publicly traded as of the date of the contribution. For example, a security is generally considered to be publicly traded if the security is (a) listed on a recognized stock exchange whose quotations are published daily, (b) regularly traded on a national or regional over-the-counter market, or (c) quoted daily in a national newspaper of general circulation in the case of mutual fund shares. Note: Digital assets are not publicly traded securities for the purposes of Form 8283, unless the digital asset is publicly traded stock or indebtedness.

If it is impractical to get a receipt (for example, if you leave property at a charity’s unattended drop site), you may satisfy the substantiation requirements by maintaining reliable written records for each item of the donated property.

Your reliable written records must include the following information.

The information in (1), (2), (3), and (4) above.

If you claim a deduction for clothing or a household item, a description of the condition of the clothing or item.

The FMV of the property at the time of the contribution and how you figured the FMV.

If you claim a deduction of at least $250 but not more than $500 for a noncash charitable contribution, you must get and keep a contemporaneous written acknowledgment of your contribution from the qualified organization. If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that shows your total contributions. See CWA , earlier.

The acknowledgment must:

Be written.

A description (but not necessarily the value) of any property you contributed,

Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), and

A description and good faith estimate of the value of any goods or services described in (b). If the only benefit you received was an intangible religious benefit (such as admission to a religious ceremony) that generally isn't sold in a commercial transaction outside the donative context, the acknowledgment must say so and doesn't need to describe or estimate the value of the benefit.

Be received by you on or before the earlier of:

The date you file your return for the year you make the contribution, or

If you claim a deduction over $500 but not over $5,000 for a noncash charitable contribution, you must complete Form 8283 and have the CWA , earlier. Your completed Form 8283 must include:

Your name and taxpayer identification number,

The name and address of the qualified organization,

The date of the charitable contribution, and

The following information about the contributed property:

The FMV of the property on the contribution date and the method used in figuring the FMV;

In the case of real or tangible property, its condition;

In the case of tangible personal property, whether the donee has certified it for a use related to the purpose or function constituting the donee’s basis for exemption under Section 501 of the Internal Revenue Code or, in the case of a governmental unit, an exclusively public purpose;

In the case of securities, the name of the issuer, the type of securities, and whether they were publicly traded as of the date of the contribution;

How you got the property, for example, by purchase, gift, bequest, inheritance, or exchange;

The approximate date you got the property or, if created, produced, or manufactured by or for you, the approximate date the property was substantially completed; and

The cost or other basis, and any adjustments to the basis, of property held less than 12 months and, if available, the cost or other basis of property held 12 months or more. This requirement, however, doesn't apply to publicly traded securities.

If you claim a deduction of over $5,000 for a noncash charitable contribution, you must have the CWA , earlier, obtain a qualified written appraisal of the donated property from a qualified appraiser, and complete Form 8283. A qualified appraisal is not required for contributions of qualified vehicles for which you obtain a CWA, certain inventory, publicly traded securities, or certain intellectual property. See Deductions More Than $5,000 in Publication 561 for more information. Note: Digital assets are not publicly traded securities for the purposes of Form 8283, unless the digital asset is publicly traded stock or indebtedness. If the value of the digital asset exceeds $5,000, appraisal requirements will apply.

In addition to, or in lieu of, the items described in Deductions Over $500 but Not Over $5,000 earlier, your completed Form 8283 must include:

The qualified organization’s taxpayer identification number, signature, the date signed by the qualified organization, and the date the qualified organization received the property;

The appraiser’s name, address, taxpayer identification number, appraiser declaration, signature, and the date signed by the appraiser; and

The following additional information about the contributed property:

The FMV on the valuation effective date; and

A statement explaining whether the charitable contribution was made by means of a bargain sale and, if so, the amount of any consideration received for the contribution.

The appraiser declaration must include the following statement: “I understand that my appraisal will be used in connection with a return or claim for refund. I also understand that, if there is a substantial or gross valuation misstatement of the value of the property claimed on the return or claim for refund that is based on my appraisal, I may be subject to a penalty under section 6695A of the Internal Revenue Code, as well as other applicable penalties. I affirm that I have not been at any time in the 3-year period ending on the date of the appraisal barred from presenting evidence or testimony before the Department of the Treasury or the Internal Revenue Service pursuant to 31 U.S.C. 330(c).”

If the contribution was a qualified conservation contribution, your records must also include the FMV of the underlying property before and after the contribution and the conservation purpose furthered by the contribution.

For more information, see Qualified Conservation Contribution , earlier, and in Pub. 561.

Out-of-Pocket Expenses

If you give services to a qualified organization and have unreimbursed out-of-pocket expenses, considered separately, of $250 or more (for example, you pay $250 for an airline ticket to attend a convention of a qualified organization as a chosen representative), related to those services, the following two rules apply.

You must have adequate records to prove the amount of the expenses.

You must get an acknowledgment from the qualified organization that contains:

A description of the services you provided,

A statement of whether or not the organization provided you any goods or services to reimburse you for the expenses you incurred,

A description and a good faith estimate of the value of any goods or services (other than intangible religious benefits) provided to reimburse you, and

A statement that the only benefit you received was an intangible religious benefit, if that was the case. The acknowledgment doesn't need to describe or estimate the value of an intangible religious benefit (defined earlier under Acknowledgment ).

If you claim expenses directly related to use of your car in giving services to a qualified organization, you must keep reliable written records of your expenses. Whether your records are considered reliable depends on all the facts and circumstances. Generally, they may be considered reliable if you made them regularly and at or near the time you had the expenses.

For example, your records might show the name of the organization you were serving and the dates you used your car for a charitable purpose. If you use the standard mileage rate of 14 cents a mile, your records must show the miles you drove your car for the charitable purpose. If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to a charitable purpose.

See Car expenses under Out-of-Pocket Expenses in Giving Services , earlier, for the expenses you can deduct.

How To Report

Report your charitable contributions on Schedule A (Form 1040), lines 11 through 14.

If you made noncash contributions, you may also be required to fill out parts of Form 8283. See Noncash contributions , later.

Enter your cash contributions, including out-of-pocket expenses, on Schedule A (Form 1040), line 11.

If you claim amounts paid for a student who lives with you, as described earlier under Expenses Paid for Student Living With You , you must submit with your return:

A copy of your agreement with the organization sponsoring the student placed in your household,

A summary of the various items you paid to maintain the student, and

A statement that gives:

The date the student became a member of your household,

The dates of the student’s full-time attendance at school, and

The name and location of the school.

For each noncash contribution described below, you must file with your return, a Form 8283 completed as specified in the instructions to Form 8283. Enter your noncash contributions on Schedule A (Form 1040), line 12.

If your total deduction for all noncash contributions for the year is over $500, you must complete Form 8283 and attach it to your Form 1040. Use Section A of Form 8283 to report noncash contributions for which you claimed a deduction of $5,000 or less per item (or group of similar items). Also use Section A to report contributions of publicly traded securities. Note: Digital assets are not publicly traded securities for the purposes of Form 8283, unless the digital asset is publicly traded stock or indebtedness. If value of digital asset exceeds $5,000, appraisal requirements will apply. See Deduction over $5,000 next, for the items you must report on Section B.

The IRS may disallow your deduction for noncash charitable contributions if it is more than $500 and you don't submit Form 8283 with your return.

You must complete Section B of Form 8283 for each item or group of similar items for which you claim a deduction of over $5,000. (However, if you contributed publicly traded securities or the specified properties listed in the instructions for Form 8283, complete Section A instead.) In figuring whether your deduction for a group of similar items was more than $5,000, consider all items in the group, even if items in the group were donated to more than one organization. However, you must file a separate Form 8283, Section B, for each organization. The organization that received the property must complete and sign Part V of Section B.

If you donated a car, boat, airplane, or other vehicle, you may have to attach a copy of Form 1098-C (or other statement) to your return. For details, see Cars, Boats, and Airplanes , earlier.

You must include with your return a Qualified appraisal , which is prepared by a Qualified appraiser , of any single donated item of clothing or any donated household item that isn't in good used condition or better and for which you deduct more than $500. See Clothing and Household Items , earlier.

A qualified appraisal is an appraisal document that:

Is made, signed, and dated by a qualified appraiser (defined later) in accordance with the substance and principles of the Uniform Standards of Professional Appraisal Practice, as developed by the Appraisal Standards Board of the Appraisal Foundation;

Meets the relevant requirements of Regulations section 1.170A-17(a);

Has a valuation effective date no earlier than 60 days before the date of the contribution and no later than the date of the contribution. For an appraisal report dated on or after the date of the contribution, the valuation effective date must be the date of the contribution; and

Does not involve a prohibited appraisal fee.

You must receive the qualified appraisal before the due date, including extensions, of the return on which a charitable contribution deduction is first claimed for the donated property. If the deduction is first claimed on an amended return, the qualified appraisal must be received before the date on which the amended return is filed. An appraisal is not a qualified appraisal if you fail to disclose or you misrepresent facts to your appraiser and a reasonable person would expect this failure or misrepresentation to cause the appraiser to misstate the value of the property you contributed.

A qualified appraiser is an individual with verifiable education and experience in valuing the type of property for which the appraisal is performed.

The individual:

Has earned an appraisal designation from a generally recognized professional appraiser organization, or

Has met certain minimum education requirements and 2 or more years of experience. To meet the minimum education requirement, the individual must have successfully completed professional or college-level coursework obtained from:

A professional or college-level educational organization,

A professional trade or appraiser organization that regularly offers educational programs in valuing the type of property, or

An employer as part of an employee apprenticeship or education program similar to professional or college-level courses.

The individual regularly prepares appraisals for which they are paid.

The individual is not an excluded individual.

See Pub. 561 for more information.

If you claim a deduction for a qualified conservation contribution for an easement on the exterior of a building in a registered historic district, you must include a qualified appraisal (defined earlier), photographs, and certain other information with your return. See Qualified Conservation Contribution , earlier.

If you claim a deduction of more than $500,000 for a contribution of property, you must attach a Qualified appraisal , which is prepared by a Qualified appraiser , of the property to your return. This doesn't apply to contributions of cash, qualified vehicles for which you obtained a CWA , certain inventory, publicly traded securities, or intellectual property. See Regulations section 1.170A-16(e)(2).

In figuring whether your deduction is over $500,000, combine the claimed deductions for all similar items donated to any qualified organization during the year.

If you don't attach the appraisal, you can't deduct your contribution, unless your failure to attach it is due to reasonable cause and not to willful neglect.

An organization must file Form 8282 if, within 3 years of receiving property for which it was required to sign a Form 8283, it sells, exchanges, consumes, or otherwise disposes of the property. The organization must also send you a copy of the form. However, the organization need not file Form 8282 to report the sale of an item if you signed a statement on Section B of Form 8283 stating that the appraised value of the item, or a specific item within a group of similar items, was $500 or less. For this purpose, all shares of nonpublicly traded stock or securities, or items that form a set (such as a collection of books written by the same author or a group of place settings), are considered to be one item.

How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, forms, or instructions, go to IRS.gov to find resources that can help you right away.

After receiving all your wage and earnings statements (Forms W-2, W-2G, 1099-R, 1099-MISC, 1099-NEC, etc.); unemployment compensation statements (by mail or in a digital format) or other government payment statements (Form 1099-G); and interest, dividend, and retirement statements from banks and investment firms (Forms 1099), you have several options to choose from to prepare and file your tax return. You can prepare the tax return yourself, see if you qualify for free tax preparation, or hire a tax professional to prepare your return.

Go to IRS.gov to see your options for preparing and filing your return online or in your local community, if you qualify, which include the following.

Free File. This program lets you prepare and file your federal individual income tax return for free using brand-name tax-preparation-and-filing software or Free File fillable forms. However, state tax preparation may not be available through Free File. Go to IRS.gov/FreeFile to see if you qualify for free online federal tax preparation, e-filing, and direct deposit or payment options.

VITA. The Volunteer Income Tax Assistance (VITA) program offers free tax help to people with low-to-moderate incomes, persons with disabilities, and limited-English-speaking taxpayers who need help preparing their own tax returns. Go to IRS.gov/VITA , download the free IRS2Go app, or call 800-906-9887 for information on free tax return preparation.

TCE. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors. Go to IRS.gov/TCE , download the free IRS2Go app for information on free tax return preparation.

MilTax. Members of the U.S. Armed Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military OneSource. For more information, go to MilitaryOneSource ( MilitaryOneSource.mil/MilTax ).

Also, the IRS offers Free Fillable Forms, which can be completed online and then filed electronically regardless of income.

Go to IRS.gov/Tools for the following.

The Earned Income Tax Credit Assistant ( IRS.gov/EITCAssistant ) determines if you’re eligible for the earned income credit (EIC).

The Online EIN Application ( IRS.gov/EIN ) helps you get an employer identification number (EIN) at no cost.

The Tax Withholding Estimator ( IRS.gov/W4app ) makes it easier for you to estimate the federal income tax you want your employer to withhold from your paycheck. This is tax withholding. See how your withholding affects your refund, take-home pay, or tax due.

The First-Time Homebuyer Credit Account Look-up ( IRS.gov/HomeBuyer ) tool provides information on your repayments and account balance.

The Sales Tax Deduction Calculator ( IRS.gov/SalesTax ) figures the amount you can claim if you itemize deductions on Schedule A (Form 1040).

IRS.gov/Help : A variety of tools to help you get answers to some of the most common tax questions.

IRS.gov/ITA : The Interactive Tax Assistant, a tool that will ask you questions and, based on your input, provide answers on a number of tax law topics.

IRS.gov/Forms : Find forms, instructions, and publications. You will find details on the most recent tax changes and interactive links to help you find answers to your questions.

You may also be able to access tax law information in your electronic filing software.

There are various types of tax return preparers, including enrolled agents, certified public accountants (CPAs), accountants, and many others who don’t have professional credentials. If you choose to have someone prepare your tax return, choose that preparer wisely. A paid tax preparer is:

Primarily responsible for the overall substantive accuracy of your return,

Required to sign the return, and

Required to include their preparer tax identification number (PTIN).

Although the tax preparer always signs the return, you're ultimately responsible for providing all the information required for the preparer to accurately prepare your return. Anyone paid to prepare tax returns for others should have a thorough understanding of tax matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov.

The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure online W-2 filing options to CPAs, accountants, enrolled agents, and individuals who process Form W-2, Wage and Tax Statement, and Form W-2c, Corrected Wage and Tax Statement.

Go to IRS.gov/SocialMedia to see the various social media tools the IRS uses to share the latest information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our highest priority. We use these tools to share public information with you. Don’t post your social security number (SSN) or other confidential information on social media sites. Always protect your identity when using any social networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, Spanish, and ASL.

Youtube.com/irsvideos .

Youtube.com/irsvideosmultilingua .

Youtube.com/irsvideosASL .

The IRS Video portal ( IRSVideos.gov ) contains video and audio presentations for individuals, small businesses, and tax professionals.

You can find information on IRS.gov/MyLanguage if English isn’t your native language.

The IRS is committed to serving our multilingual customers by offering OPI services. The OPI Service is a federally funded program and is available at Taxpayer Assistance Centers (TACs), other IRS offices, and every VITA/TCE return site. The OPI Service is accessible in more than 350 languages.

Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and future accessibility products and services available in alternative media formats (for example, braille, large print, audio, etc.). The Accessibility Helpline does not have access to your IRS account. For help with tax law, refunds, or account-related issues, go to IRS.gov/LetUsHelp .

Form 9000, Alternative Media Preference, or Form 9000(SP) allows you to elect to receive certain types of written correspondence in the following formats.

Standard Print.

Large Print.

Audio (MP3).

Plain Text File (TXT).

Braille Ready File (BRF).

Go to Disaster Assistance and Emergency Relief for Individuals and Businesses to review the available disaster tax relief.

Go to IRS.gov/Forms to view, download, or print all the forms, instructions, and publications you may need. Or, you can go to IRS.gov/OrderForms to place an order.

You can also download and view popular tax publications and instructions (including the Instructions for Form 1040) on mobile devices as eBooks at IRS.gov/eBooks .

IRS eBooks have been tested using Apple's iBooks for iPad. Our eBooks haven’t been tested on other dedicated eBook readers, and eBook functionality may not operate as intended.

Go to IRS.gov/Account to securely access information about your federal tax account.

View the amount you owe and a breakdown by tax year.

See payment plan details or apply for a new payment plan.

Make a payment or view 5 years of payment history and any pending or scheduled payments.

Access your tax records, including key data from your most recent tax return, and transcripts.

View digital copies of select notices from the IRS.

Approve or reject authorization requests from tax professionals.

View your address on file or manage your communication preferences.

This tool lets your tax professional submit an authorization request to access your individual taxpayer IRS online account . For more information, go to IRS.gov/TaxProAccount .

The fastest way to receive a tax refund is to file electronically and choose direct deposit, which securely and electronically transfers your refund directly into your financial account. Direct deposit also avoids the possibility that your check could be lost, stolen, destroyed, or returned undeliverable to the IRS. Eight in 10 taxpayers use direct deposit to receive their refunds. If you don’t have a bank account, go to IRS.gov/DirectDeposit for more information on where to find a bank or credit union that can open an account online.

Tax-related identity theft happens when someone steals your personal information to commit tax fraud. Your taxes can be affected if your SSN is used to file a fraudulent return or to claim a refund or credit.

The IRS doesn’t initiate contact with taxpayers by email, text messages (including shortened links), telephone calls, or social media channels to request or verify personal or financial information. This includes requests for personal identification numbers (PINs), passwords, or similar information for credit cards, banks, or other financial accounts.

Go to IRS.gov/IdentityTheft , the IRS Identity Theft Central webpage, for information on identity theft and data security protection for taxpayers, tax professionals, and businesses. If your SSN has been lost or stolen or you suspect you’re a victim of tax-related identity theft, you can learn what steps you should take.

Get an Identity Protection PIN (IP PIN). IP PINs are six-digit numbers assigned to taxpayers to help prevent the misuse of their SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with your SSN. To learn more, go to IRS.gov/IPPIN .

Go to IRS.gov/Refunds .

Download the official IRS2Go app to your mobile device to check your refund status.

Call the automated refund hotline at 800-829-1954.

Payments of U.S. tax must be remitted to the IRS in U.S. dollars. Digital Assets are not accepted. Go to IRS.gov/Payments for information on how to make a payment using any of the following options.

IRS Direct Pay : Pay your individual tax bill or estimated tax payment directly from your checking or savings account at no cost to you.

Debit, Credit Card, or Digital Wallet : Choose an approved payment processor to pay online or by phone.

Electronic Funds Withdrawal : Schedule a payment when filing your federal taxes using tax return preparation software or through a tax professional.

Electronic Federal Tax Payment System : Best option for businesses. Enrollment is required.

Check or Money Order : Mail your payment to the address listed on the notice or instructions.

Cash : You may be able to pay your taxes with cash at a participating retail store.

Same-Day Wire : You may be able to do same-day wire from your financial institution. Contact your financial institution for availability, cost, and time frames.

The IRS uses the latest encryption technology to ensure that the electronic payments you make online, by phone, or from a mobile device using the IRS2Go app are safe and secure. Paying electronically is quick, easy, and faster than mailing in a check or money order.

Go to IRS.gov/Payments for more information about your options.

Apply for an online payment agreement ( IRS.gov/OPA ) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once you complete the online process, you will receive immediate notification of whether your agreement has been approved.

Use the Offer in Compromise Pre-Qualifier to see if you can settle your tax debt for less than the full amount you owe. For more information on the Offer in Compromise program, go to IRS.gov/OIC .

Go to IRS.gov/Form1040X for information and updates.

Go to IRS.gov/WMAR to track the status of Form 1040-X amended returns.

Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

You can now upload responses to all notices and letters using the Document Upload Tool. For notices that require additional action, taxpayers will be redirected appropriately on IRS.gov to take further action. To learn more about the tool, go to IRS.gov/Upload

You can schedule LEP (Form 1040). Request for Change in Language Preference, to state a preference to receive notices, letters, or other written communications from the IRS in an alternative language. You may not immediately receive written communications in the requested language. The IRS’s commitment to LEP taxpayers is a part of a multi-year timeline that began providing translations in 2023. You will continue to receive communications, including notices and letters, in English until they are translated to your preferred language.

Keep in mind, many questions can be answered on IRS.gov without visiting a TAC. Go to IRS.gov/LetUsHelp for the topics people ask about most. If you still need help, TACs provide tax help when a tax issue can’t be handled online or by phone. All TACs now provide service by appointment, so you’ll know in advance that you can get the service you need without long wait times. Before you visit, go to IRS.gov/TACLocator to find the nearest TAC and to check hours, available services, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate Service (TAS) Is Here To Help You

TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. TAS strives to ensure that every taxpayer is treated fairly and that you know and understand your rights under the Taxpayer Bill of Rights .

The Taxpayer Bill of Rights describes 10 basic rights that all taxpayers have when dealing with the IRS. Go to TaxpayerAdvocate.IRS.gov to help you understand what these rights mean to you and how they apply. These are your rights. Know them. Use them.

TAS can help you resolve problems that you can’t resolve with the IRS. And their service is free. If you qualify for their assistance, you will be assigned to one advocate who will work with you throughout the process and will do everything possible to resolve your issue. TAS can help you if:

Your problem is causing financial difficulty for you, your family, or your business;

You face (or your business is facing) an immediate threat of adverse action; or

You’ve tried repeatedly to contact the IRS but no one has responded, or the IRS hasn’t responded by the date promised.

TAS has offices in every states, the District of Columbia, and Puerto Rico . To find your advocate’s number:

Go to TaxpayerAdvocate.IRS.gov/Contact-Us ;

Download Pub. 1546, The Taxpayer Advocate Service Is Your Voice at the IRS, available at IRS.gov/pub/irs-pdf/p1546.pdf

Call the IRS toll free at 800–TAX-FORM (800–829–3676) to order a copy of Pub. 1546;

Check your local directory; or

Call TAS toll free at 877–777–4778.

TAS works to resolve large-scale problems that affect many taxpayers. If you know of one of these broad issues, report it to TAS at IRS.gov/SAMS . Be sure to not include any personal taxpayer information.

LITCs are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, go to the LITC page at TaxpayerAdvocate.IRS.gov/LITC or see IRS Pub. 4134, Low Income Taxpayer Clinic List , at IRS.gov/pub/irs-pdf/p4134.pdf .

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IMAGES

Travel expense tax deduction guide: How to maximize write-offs
Guide to travel related work expenses
EXCEL of Travel Expenses Report.xls
How to estimate travel expenses
PPT
Travel Expense Deduction

VIDEO

Maximum Deduction Limit under:- #accounting #accountancy #gst
Deduction of Medical Insurance Premium from Total Income of an Assessee

COMMENTS

Publication 463 (2023), Travel, Gift, and Car Expenses
Section 179 deduction is explained in chapter 4.Also, the maximum section 179 expense deduction for sport utility vehicles placed in service in tax years beginning in 2023 is $28,900. ... You may have other deductible travel expenses that aren't covered there, depending on the facts and your circumstances..
How to Deduct Business Travel Expenses: Do's, Don'ts, Examples
To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn't your home. 2. You should be working regular hours. In general, that means eight hours a day of work-related activity. It's fine to take personal time in the evenings, and you can still take weekends off.
How to Deduct Travel Expenses (with Examples)
For example, let's say a hotel room for one person costs $100, but a hotel room that can accommodate your family costs $150. You can rent the $150 option and deduct $100 of the cost as a business expense—because $100 is how much you'd be paying if you were staying there alone.
7 Rules You Should Know About Deducting Business Travel Expenses
7 Rules You Should Know About Deducting Business Travel Expenses. By Jean Murray. Updated on September 19, 2022. Fact checked by. Daniel Rathburn. In This Article. View All.
Tax Deductions for Business Travelers
You can deduct business travel expenses when you are away from both your home and the location of your main place of business (tax home). Deductible expenses include transportation, baggage fees, car rentals, taxis and shuttles, lodging, tips, and fees. You can also deduct 50% of either the actual cost of meals or the standard meal allowance ...
Determining Tax Deductions for Travel Expenses + List of Deductions
Step 1: Determine Your Trip Meets the Requirements of a Business Trip. A business trip for tax purposes is one that meets the following criteria: There must be a business purposes for the travel. You are required to be away from your tax home. The trip lasts overnight or a period long enough to require rest. The trip is temporary.
Deductions For Business Travel Expenses
If you travel away from home overnight on business, you can deduct these travel expenses: Airline, train, or bus fares — This includes first-class. Operation and maintenance of an automobile, like: Actual expenses or standard mileage rate. Business-related tolls and parking. You might rent a car while you're away from home on business.
PDF THE COMPLETE GUIDE TO DEDUCTING BUSINESS TRAVEL EXPENSES
Not only that, but all travel expenses are deductible in that case. However, it's a different story if the trip is not entirely for business purposes. In order to deduct the travel, the taxpayer must meet one of the following exceptions. The trip will be considered entirely for business IF: 1. The taxpayer did not have substantial control ...
Can I deduct travel expenses?
SOLVED • by TurboTax • 5278 • Updated November 30, 2023. If you're self-employed or own a business, you can deduct work-related travel expenses, including vehicles, airfare, lodging, and meals. The expenses must be ordinary and necessary. For vehicle expenses, you can choose between the standard mileage rate or the actual cost method ...
How to find deductions for travel expenses
If traveling abroad, you must spend a minimum of 25% of your time conducting business to qualify as a business trip and claim travel expense deductions. If you conduct business for less than 25% of the time while on a trip, you can still deduct travel costs. This deduction must be proportional to the amount of time spent on business.
Travel Expenses Definition and Tax Deductible Categories
Travel expenses are costs associated with traveling for the purpose of conducting business-related activities. Travel expenses can generally be deducted by employees as non-reimbursed travel ...
How to Deduct Your Meal Expenses for Business Travel in 2024
Deducting Meal Expenses for Business Travel in 2024. Meals you eat while traveling for business in 2024 are 50% deductible if you follow the rules. When you're on the road, there's nothing more enjoyable than a good meal. But the food will likely taste even better if you can deduct the cost from your taxes.
Are Travel Expenses Tax Deductible? A Comprehensive Guide
Now that you understand are travel expenses tax deductible or not, let's explore the specific types of costs that may qualify for business travel expense deductions: Transportation Costs: This includes airfare, train tickets, rental cars, and other transportation expenses incurred while traveling for business purposes.
No Receipt Tax Write Off: Maximizing Deductions Without Proof
For self-employed individuals, it's essential to make the most of available tax deductions to maximize income. One way to do this is by claiming tax deductions without receipts. The $75 rule, as stated in IRS Publication 463, allows business owners to deduct expenses under $75 related to: Travel. Entertainment.
What Are the Mileage Deduction Rules?
The mileage tax deduction rules generally allow you to claim $0.655 per mile in 2023 if you are self-employed. You may also be able to claim a tax deduction for mileage in a few other specific circumstances, including if you're an armed forces reservist, qualified performance artist or traveling for charity work or medical reasons. There's ...
Here's what taxpayers need to know about business related travel deductions
Tips paid for services related to any of these expenses. Other similar ordinary and necessary expenses related to the business travel. Self-employed or farmers with travel deductions. Those who are self-employed can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship).
Declaring your travel allowance and claiming expenses
A travel allowance expense is a deductible travel expense: for accommodation, meals (food or drink), or incidentals. You incur a travel allowance expense when you either: have an obligation to pay an amount for the expense. You can't claim a deduction if your employer either pays for or reimburses you for the expense.
Line 25500
The maximum deduction you can claim for each eligible trip is the lowest of the following three amounts:. either the taxable travel benefits you received from employment for the trip or the portion of the $1,200 standard amount for the person travelling (you or your eligible family member) that you allocate to the trip (enter the amount for whichever option you choose in Step 3, Chart B ...
Deduction for travel expenses
The actual deduction is approx. 26%. So if your travel deduction amounts to DKK 3,000, you will save approx. DKK 780 in tax. Maximum deduction for travel expenses in 2024 is DKK 31,600 (DKK 30,500 in 2023) Enter your travel deduction in your tax assessment notice, box 53. Enter your travel deduction in your preliminary income assessment, field 429
Publication 502 (2023), Medical and Dental Expenses
Medical expenses include dental expenses, and in this publication the term "medical expenses" is often used to refer to medical and dental expenses. You can deduct on Schedule A (Form 1040) only the part of your medical and dental expenses that is more than 7.5% of your adjusted gross income (AGI). This publication also explains how to ...
Driving down taxes: Auto-related tax deductions
If you're self-employed, you typically can deduct expenses for the miles you drive or for the actual automobile costs for business purposes. You can calculate your driving deduction by adding up ...
Family Tax Deductions: What Can I Claim?
A good tip to follow is asking for these ahead of time instead of at the end of the year. As a Canadian taxpayer, the maximum amount you can claim is: $8,000 for each child under 7 years of age at the end of the year. $5,000 for each child between 7 and 16 years of age. $11,000 for each child who qualifies for the disability tax credit.
Publication 526 (2023), Charitable Contributions
The $11,000 amount is the sum of your current and carryover contributions to 50% limit organizations, $6,000 + $5,000.) The deduction for your $5,000 carryover is subject to the special 30% limit for contributions of capital gain property. This means it is limited to the smaller of: $7,200 (your 30% limit), or.