Our resident tax expert Julian Block receives multiple queries from his readers and clients regarding tax-related issues. Here, he addresses some recent questions around travel deductions for freelancers.
Question: I’m a Boston-based freelancer who writes books and articles on climate change and other scientific topics. Next month, I’ll be driving to attend a conference for science writers in Portland, Oregon. I’m pretty sure that I’m entitled to claim some deductions on Schedule C of Form 1040, but what sorts of expenses can I write off, and can I deduct them totally?
Answer: The law allows you to deduct 100 percent of the conference registration fee. Also entirely deductible are travel between Boston and Portland and hotel charges.
The IRS limits write-offs for meals not covered by the fee, including both what you eat en route and while you’re in Portland. The agency allows you to deduct only 50 percent of those expenditures.
It authorizes two options for car travel. One is to deduct actual expenses. The other is a standard mileage rate.
For 2019, the rate is 58 cents per mile. Whether you claim actual expenses, the standard rate, or the cost of a rental car, also deduct parking fees, as well as bridge, tunnel and turnpike tolls.
Revenue Service spoilsports insist that you stay within the speed limit. They draw the line at deductions for traffic infractions.
Deductions for conferences and other business travel provide an additional break. They don’t just reduce the amount you show as profit on Schedule C, thereby reducing the amount of your business income subject to income taxes. They also reduce the amount of your business income subject to self-employment taxes, as calculated on Schedule SE. Many freelancers get nicked more for self-employment taxes than for income taxes.
Question: I’ll be paid for my talk at a writers’ conference. Is a charitable-contribution deduction available to a speaker who declines an honorarium and asks that the money be donated to a charity he or she picks?
Answer: Yes. But the speaker still has to declare the honorarium as income.
The snag is that tax breaks for donations vanish if speakers pass up itemizing on Schedule A of Form 1040 and use one of the no-questions-asked standard deduction amounts that were almost doubled by the Tax Cuts and Jobs Act that Congress passed and President Trump signed at the close of 2017.
The IRS says speakers who opt not to itemize can select one of those deductions. They’re flat amounts based mostly on filing status and age. The agency adjusts them annually to reflect inflation.
Additional articles. A reminder for accountants who would welcome advice on how to alert clients to tactics that trim taxes for this year and even give a head start for next year: Delve into the archive of my articles (more than 250 and counting).
About Julian Block
Attorney and author Julian Block is frequently quoted in the New York Times, Wall Street Journal, and the Washington Post. He has been cited as “a leading tax professional” (New York Times), an “accomplished writer on taxes” (Wall Street Journal), and “an authority on tax planning” (Financial Planning magazine). More information about his books can be found at julianblocktaxexpert.com.