Tax Deductible travel! What I need to know.
There are two classes of travel which you will encounter as an employee of a business:
The first is travel between home and work. Unless your home is also your place of business and employment, every employee will bear some expense in the daily commute to and from work. Despite what logic dictates, the ATO and Australian common law see this expense as private in nature. As such, this expense is difficult to claim as a deduction in your tax return.
The second class of travel is business travel. A major perk of your job may be travelling to different work locations, or conferences, or work-related activities. Unlike travel between home and work, expenses incurred in the course of business travel are deductible in your tax return.
To claim a deduction for work related travel, apply these ATO expectations:
Keep receipts – The golden rule of your tax return applies here as well. Though small expenses (like coffee at the convention centre) are not expected to be kept, it is still a good idea to keep all receipts of expenses related to your business trip. Large expenses, such as flights or accommodation, need to have a written receipt/invoice.
Keep a travel diary – If your travel is more than six consecutive nights, the ATO expects you to keep a travel diary of your business trips to ensure the right work/private balance is met and applied. Your diary will detail your work activities (location, times, duration) on days where this is relevant and include the unrelated days as “private”. Remember to apportion expenses which are both for work and private use, and to not include expenses which are only private in nature.