On occasion, you may get the opportunity to tour with a show or to shoot on a location that's well beyond your normal travel circles. The Internal Revenue Service calls it "traveling away from home" when your job requires you to be away from home substantially longer than an ordinary day's work, necessitating that you sleep or rest on location.
Within reason, almost every expense related to your business as an actor is deductible, but you must keep all your receipts and a log of your activities to be able to take full advantage of those deductions. If you're traveling for a union job, the producer will likely pay you a per diem (a Latin term meaning "per day") to cover any expenses you may incur. But don't let that stop you from recording those expenses and writing them off. All too often, per diem payments are included in your taxable income, so if you don't deduct those expenses, you're essentially being double taxed. So add up your actual costs, subtract the total per diem you received, and whatever's left over is a deductible expense.
Deductible expenses while traveling away from home include (but are not necessarily limited to):
1) Meals and lodging (more about these below).
2) Travel by airplane, train, bus, or car -- assuming you incurred the expense. If you were reimbursed or used frequent-traveler miles, then your cost is zero.
4) Tips you paid for services related to any of these expenses.
5) Dry cleaning and laundry while on location.
6) Business calls or computer usage while on your business trip.
There are two ways to deduct your travel meals. You can save all your receipts and deduct your actual expenses, or you can use the per diem rates that the government has established for most large American cities. Acceptable meal costs range from $39 to $64 per day, depending on the city. You can go to the General Services Administration website General Services Administration to see the rate for each location you visited. The website includes the figures for 2009 and for years going back to 1997.
The government's per diem rates usually far exceed actual meal expenses. We don't know too many actors who eat $64 worth of food every day, but that shouldn't stop them or anyone else from taking the maximum write-off.
Whether you deduct your actual costs or the per diem rate, meal deductions are generally limited to 50 percent of the total you spent on meals. Many taxpayers are confused by this and subtract 50 percent from the total before entering the figure on the return. Wrong. You should enter your total expense, then let the form do the rest: It will automatically subtract the 50 percent the IRS disallows.
When deducting the cost of lodging, you must be able to prove the expenses you incurred, so keep all the relevant receipts. The amounts you write off must be reasonable and appropriate, as deducting "extravagant expenses" is not allowed.
If you visit the GSA website, don't be confused by the lodging per diems listed there. You can't deduct this amount without valid receipts, as you can for meals. This is just a reference number for businesses to prevent them from reimbursing their employees for the "extravagant expenses" the IRS disallows.
If you're in a single location for more than a year, you're generally considered to be on an "indefinite work assignment" and no longer traveling. That means you can't write off your travel costs. Same thing if you travel to a specific location with the "realistic intention" of being there longer than a year: You also lose the right to deduct your travel expenses.