How Much Holiday Travel Taxes Really Cost You
The holidays can bring hefty taxes for many, and whether you're traveling by plane or car this season, you might find yourself hit with countless hidden taxes. According to a 2010 study by the National Business Travel Association, travelers pay up to $101 in sales, hotel, rental car and other taxes on an average three-day trip.
Here's a breakdown of the hidden fees and taxes associated with holiday travel:
--Air travel taxes. If you travel by air, you may pay close to $60 in taxes thanks to a variety of air transportation taxes, but how much you pay varies according to your itinerary. There's a 7.5 percent tax on the base ticket price (so a round-trip ticket that costs $300 before taxes and fees will have another $22.50 added to the fare price), a domestic segment tax of $4 per person per segment (a single takeoff and single landing) and an international travel facilities tax of $17.50 per person for flights that begin or end in the U.S. If you are shipping anything, be sure to tack on 6.25 percent for a tax on transporting property by air.
--Baggage fees. In 2012, airlines raked in about $3.5 billion in fees for amenities such as checked baggage and extra legroom. With fees anywhere from $25 to $200 for checked bags, travelers who can pack a carry-on as though it were a full-sized suitcase will discover it's a cost-saving skill. If you're planning a lengthy stay at your destination, you might consider shipping your luggage by UPS. Four-day shipping for a 55 pound bag from Los Angeles to Chicago, for example, costs $66.24, compared to a $100 fee for bags weighing more than 50 pounds.
--Gasoline taxes. You won't escape taxes by driving - it's quite the opposite. In 2013, motor gasoline taxes averaged 49.4 cents per gallon, including a federal tax of 18.4 cents per gallon. As if that weren't enough, there are a few states and municipalities that charge sales tax on top of the excise taxes. You'll pay the most if you fill up in California (71.6 cents) and the least in Alaska (30.8 cents), though that's quite a distance to travel for a tank of gas for most Americans.
--Extra charges for hotel rooms and car rentals. Taxes for other travel expenses also vary from city to city. If you are spending a couple of nights in Chicago, expect to pay a whopping $101 in taxes for hotel, rental car and meals. Want to cut that amount in half? Spend the weekend in Fort Lauderdale, Fla., Detroit or Portland, where the daily tax burden on travelers is about $22 a day, according to the Global Business Travel Association.
What's refundable and what isn't?
In some cases, you might be able to receive a refund on taxes related to your airline expenses.
--Refundable: The Transportation Security Administration fee, which is $2.50 for each leg of a flight and capped at $5 each way, can be refunded if a passenger makes a request. The TSA on its website directs passengers to the airline to seek a refund.
--Non-refundable: The excise tax of 7.5 percent of an airline ticket price isn't refundable or the $3.70 tax on each leg of a flight. The international tax of $16.10 on each passenger arriving from or departing on a flight abroad also is non-refundable.
It's hard to spot the hidden fees associated with travel, so be sure to use some money-saving tactics like carrying on your luggage instead of checking it in. Also, don't forget when you file your taxes, you may be able to deduct some of your travel expenses if they are unreimbursed business expenses or if you traveled to help your favorite charity as a volunteer. For example, if you drive your vehicle somewhere for volunteer purposes, you can deduct 14 cents per mile on your taxes. Writing off these expenses may help offset the hidden travel fees you paid and put more money in your pocket at tax time.
Lisa Greene-Lewis is a certified public accountant and TurboTax tax expert. She has more than 15 years of experience in tax preparation, including positions as a public auditor, controller and operations manager. For more tax-related tips, go to blog.turbotax.intuit.com.
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