Overnight Travel | 2023 Gotax

Overnight Travel and Allowances: Tips and Traps for Claiming Tax Deductions in 2023

If you have to travel overnight for work, you may be eligible to claim some tax deductions for your travel expenses. And for all things tax, there are certain rules and conditions that you need to be aware of before you lodge your tax return. We've put together some tips and traps for claiming tax deductions for overnight travel and allowances in 2023.

Tips Overnight Travel and Allowances

- Keep records of your travel expenses. You need to keep receipts, invoices, bank statements, or other evidence of your travel expenses, such as accommodation, meals, incidentals, transport, and parking fees. You also need to keep a travel diary if your travel lasts for six or more consecutive nights. A travel diary is a document that records the dates, places, times, and duration of your work activities and travel.
- Claim the reasonable amount for your travel expenses. The Australian Taxation Office (ATO) publishes annual determinations of the reasonable amounts for travel expenses based on the location, duration, and nature of your travel. These amounts are updated every year and can be found on the ATO website. If you claim the reasonable amount or less for your travel expenses, you do not need to keep detailed records of your actual expenses. However, you still need to show that you spent the money and that it was related to your work.
-Check if you received a travel allowance from your employer. What is a travel allowance?, I'm glad you asked, it's an amount of money that your employer pays you to cover your travel expenses when you travel away from your usual place of work for work purposes. If you received a travel allowance from your employer, you need to declare it as income in your tax return. You can then claim a deduction for your travel expenses up to the amount of your allowance. If your travel expenses are more than your allowance, you can claim the excess amount as a deduction, but you need to keep records of all your expenses. If your travel expenses are less than your allowance, you can only claim a deduction for the amount that you actually spent.

Gotax has all that spelt out for you in the deduction area of your tax return.  We've taken all the confusing stuff out so It's nice and easy to follow and get right.

Traps Overnight Travel and Allowances

• Do not claim private or domestic travel expenses. You can only claim a deduction for travel expenses that are directly related to your work duties. You cannot claim a deduction for any private or domestic portion of your travel, such as sightseeing, visiting friends or relatives, or extending your stay for personal reasons. You also cannot claim a deduction for any travel expenses that are reimbursed by your employer or another party.
• Do not claim a deduction for normal trips between home and work. You cannot claim a deduction for the cost of travelling between your home and your usual place of work, even if you work irregular hours or have to carry bulky equipment¹. This is considered to be a private expense. In some cases there are exceptions, such as if you have to travel between two separate workplaces on the same day, or if you have to work at different locations on a regular basis.
• Do not overestimate your travel expenses. You need to be honest and accurate when claiming tax deductions for your travel expenses. If you overestimate or inflate your expenses, you may be penalised by the ATO if they audit your tax return. The ATO has access to various sources of information to verify your claims, such as data matching with third parties, online platforms, and other government agencies. If you are unsure about how much you can claim or how to calculate your expenses, you should talk to Gotax and clear up any fuzzy information.

Overnight travel and allowances can be a significant source of tax deductions for employees who travel for work. There are also some pitfalls that you need to avoid when claiming these deductions. By following the tips and traps outlined, you can maximise your tax savings and minimise your risk of getting into trouble with the ATO.