News & Updates

Whether someone travels for work once a year or once a month, figuring out travel expense tax write-offs might seem confusing. The IRS has information to help all business travelers properly claim these valuable deductions.

Here are some tax details all business travelers should know

Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. A taxpayer is traveling away from home if they are away for longer than an ordinary day's work and they need to sleep to meet the demands of their work while away.

Travel expenses must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes.

Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year.

Travel expenses for conventions are deductible if attendance benefits the business. There are special rules for conventions held outside North America.

Deductible travel expenses include:

• Travel by airplane, train, bus or car between your home and your business destination.
• Fares for taxis or other types of transportation between an airport or train station and a hotel, or from a hotel to a work location.
• Shipping of baggage and sample or display material between regular and temporary work locations.
• Using a personally owned car for business.
• Lodging and meals.
• Dry cleaning and laundry.
• Business calls and communication.
• Tips paid for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to the business travel.

Self-employed individuals 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).
• Farmers can use Schedule F (Form 1040), Profit or Loss From Farming.

Travel deductions for the National Guard or military reserves

National Guard or military reserve servicemembers can claim a deduction for unreimbursed travel expenses paid during the performance of their duty.

Recordkeeping

Well-organized records make it easier to prepare a tax return. Keep records such as receipts, canceled checks and other documents that support a deduction.

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Receiving a tax refund is happy news to any taxpayer; getting it quickly is even better. Direct deposit is the safest and most convenient way to receive a tax refund. The IRS encourages taxpayers to file when they are ready and choose direct deposit to receive any refund they may be owed.

Benefits of choosing IRS direct deposit:

• It's fast. The fastest way for taxpayers to get their refund is to file electronically and choose direct deposit. Visit IRS.gov for details about IRS Free File, Free File Fillable Forms, free tax return preparation and more. Taxpayers who file a paper return can also choose direct deposit, but it will take longer to process the return and get a refund.
  
• It's secure. Since refunds are electronically deposited, there's no risk of having a paper check stolen or lost in the mail.
  
• It's easy. Taxpayers can simply follow the instructions when selecting direct deposit as a refund method and enter their account information as directed. They must enter the correct account and routing numbers when they file.
  
• It provides options. Taxpayers can split a refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts. They should use IRS Form 8888, Allocation of Refund, Including Savings Bond Purchases to deposit a refund in up to three accounts. This form cannot be used to designate part of a refund to pay tax preparers.

Taxpayers should deposit refunds into U.S. bank accounts in their own name, their spouse's name or both. They should avoid making a deposit into accounts owned by others. Some banks require both spouses' names on the account to deposit a tax refund from a joint return. Taxpayers should check with their bank for direct deposit rules.

Get a bank account

Taxpayers who don't have a bank account can visit the FDIC website for information on banks that let them open an account online and how to choose the right account. Veterans can use the Veterans Benefits Banking Program for access to financial services at participating banks.

Mobile apps may be an option

Some mobile apps and prepaid debit cards allow for direct deposit of tax refunds. They must have routing and account numbers associated with them that can be entered on a tax return. Taxpayers should check with the mobile app provider or financial institution to confirm which numbers to use.

Taxpayers must have their routing and account numbers for direct deposit available when they are ready to file. The IRS can't accept this information after a return is filed.

There is a limit of three direct deposit refunds made into a single financial account or prepaid debit card.

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As people get ready to file a 2022 tax return, they may have questions or need additional information. IRS.gov has tools and resources that can put the information a taxpayer needs at their fingertips. Taxpayers can bookmark the links below or save them as favorites on their computer or other device. Having this info just a click away can help taxpayers approach tax season with confidence.

• Let Us Help You page. This page has links to information and resources on a wide range of topics for both individual taxpayers and businesses.
  
• Online Account. An IRS Online Account lets taxpayers securely access their personal tax information, including tax return transcripts, payment history, certain notices, prior year adjusted gross income (AGI) and power of attorney information. They can also log in to verify if their name and address is correct. Taxpayers should notify the IRS if their address has changed. It's also important taxpayers notify the Social Security Administration of a legal name change to avoid a delay in processing their tax return.
  
• IRS Free File. Most taxpayers can file their tax return electronically for free using IRS Free File at IRS.gov/freefile. This program is available only through IRS.gov and offers brand-name tax preparation software packages at no cost. The software does all the work of finding deductions, credits and exemptions for filers. It's free for those who qualify. Some IRS Free File packages also offer free state tax return preparation. Those who are comfortable preparing their own taxes can use Free File Fillable Forms, regardless of their income, to file their tax return.
  
• Find a tax professional. The Choosing a Tax Professional page on IRS.gov has a wealth of information to help filers find professional tax help. The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers find preparers in their area who hold professional credentials recognized by the IRS.
  
• Interactive Tax Assistant. The Interactive Tax Assistant tool answers many tax questions. It can determine if a type of income is taxable or if a taxpayer is eligible to claim certain credits or deductions. It also answers general questions, such as determining whether a taxpayer needs to file, what their filing status is, or if they're eligible to claim a dependent.
  
• Where's My Refund? Taxpayers can use this tool to check the status of their refund. Current year refund information is usually available online within 24 hours after the IRS receives an e-filed tax return. Status on a paper return can take up to four weeks to appear. The tool updates once every 24 hours, usually overnight, so taxpayers need to check only once a day.
  
• Free Tax Assistance. The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer free basic tax return preparation to qualified individuals.

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The due date to file 2022 Form W-2, Form W-3, and Form 1099-NEC is January 31, 2023. Employers and other businesses should be sure to make this important deadline.

Form W-2, Wage and Tax Statement and Form W-3, Transmittal of Wage and Tax Statements

Employers must file copy A of Form W-2 and Form W-3 with the Social Security Administration by January 31. Businesses can find filing information on the Topic No. 752, Filing Forms W-2 and W-3 webpage.

Form 1099-NEC, Nonemployee Compensation

The Jan. 31 deadline also applies to Forms 1099-NEC filed with the IRS to report non-employee compensation to independent contractors. Employers and payers can review the Instructions for Forms 1099-MISC and 1099-NECPDF for details and other due dates.

Filing on time helps avoid penalties

Automatic extensions of time to file Form W-2 and Form 1099-NEC are not available. The IRS will grant extensions only for very specific reasons. The general instructions for Form 8809, Application for Time to File Information Returns has details.

Employers should also read the Form W-2 and W-3 instructions and the Information Return Penalties page at IRS.gov.

Businesses should be prepared

It's important to have everything prepared to file on time. Employers should verify or update employee and payee information such as names, addresses and Social Security numbers or Individual Taxpayer Identification Numbers. They should also ensure their company's account information is current and active with the Social Security Administration and order paper Forms W-2 if needed.

Timely filing helps detect fraud

The filing date for Form W-2 and other wage statements allows the IRS to detect refund fraud more easily by verifying income that individuals report on their tax returns. Employers can help support this process and avoid penalties by filing the forms on time and without errors. E-filing is the quickest, most accurate and convenient way to file these forms.

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Most of the common errors taxpayers make on their tax returns are easily avoidable. By carefully reviewing their return, taxpayers can save time and effort by not having to correct it later. Filing electronically also helps prevent mistakes. Tax software does the math, flags common errors and prompts taxpayers for missing information. It can also help taxpayers claim valuable credits and deductions. Taxpayers who qualify may use IRS Free File to file their return electronically for free.

Here are some of the mistakes to avoid:

• Filing too early. While taxpayers should not file late, they also should not file prematurely. They should wait to file until they're certain they've received all their tax reporting documents, or they risk making a mistake that may lead to a processing delay.
  
• Missing or inaccurate Social Security numbers. Each SSN on a tax return should appear exactly as printed on the Social Security card.
  
• Misspelled names. The names of all taxpayers and dependents listed on the return should match the names on their Social Security cards.
  
• Inaccurate information. Taxpayers should carefully enter any wages, dividends, bank interest and other income they received to make sure they report the correct amounts. This includes any information taxpayers need to calculate credits and deductions.
  
• Incorrect filing status. Some taxpayers choose the wrong filing status. Publication 501 has detailed information about filing statuses.
  
• Math mistakes. Math errors are some of the most common mistakes. They range from simple addition and subtraction to more complex calculations. Taxpayers should always double check their math. Better yet, tax prep software will check it automatically.
  
• Figuring credits or deductions. Taxpayers can make mistakes figuring things like their earned income tax credit, child and dependent care credit and child tax credit. Tax software will calculate these credits and deductions and include any required forms and schedules.
  
• Incorrect bank account numbers. Taxpayers who are due a refund should choose direct deposit. This is the fastest way for them to get their money. However, taxpayers need to make sure they use the correct routing and account numbers on their tax return.
  
• Unsigned forms. An unsigned tax return isn't valid. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have a valid power of attorney.
  
• Disreputable tax preparers. Taxpayers should remember they, not the tax preparer, are responsible for the information on their tax return The IRS has resources to help taxpayers find someone to prepare their tax return. Some taxpayers may even be able to get free help from IRS-certified volunteers. Certified public accountants, enrolled agents or other tax professionals can also help taxpayers avoid errors.

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