Q: How does the new tax law affect me? Are we losing tax free stipends? What about reimbursements?
A: The affects of the new tax code is relatively minimal.
I wrote a more detailed blog about it here.
Firstly, you will continue to receive tax free money for both housing as well as meals/incidentals.
However, there will definitely be some changes that can affect your tax returns from this point forward.
- Under the previous law, if your travel company paid you $35 per day for the food stipend and the GSA technically allowed $75 per day in that area, you were able to deduct the remaining amount. From now on, you cannot.
- Travelers can no longer deduct expenses such as uniforms, shoes, license expenses, phone cost, computers, union dues, equipment, conference expenses, etc.
- Lastly, you can no longer take advantage of the standard mileage deduction. Under the old law, if your travel company reimbursed $400 for travel expenses to your assignment and it ended up costing $800 to get there, you could deduct the remaining amount. Unfortunately, that ability is no more.
Second, travelers can still receive reimbursements from their travel company for expenses such as licenses, CEUs, and travel expenses as normal.
Though you are losing the ability to deduct some expenses while filing taxes, travel therapy is still well worth exploring.
What questions do you have about the new tax law? Comment below!