The Rules on Business Travel
If you travel a few times a year — or even more than that — for work, those flights, hotels, and client dinners can start to add up. The good news: Many of those costs are tax deductible as long as the trip qualifies as a business expense.
Knowing what counts and what doesn't can make it easier to plan smarter trips, avoid stress at tax time, and make sure you're not leaving money on the table.
The trip has to be primarily for business
To qualify, the primary purpose of the trip needs to be work-related, such as visiting a client, attending a conference, or scoping out a new market. A few quick rules:
The trip must take you away from your regular work location and be long enough that you need to sleep while you're gone.
The expenses must be both ordinary and necessary, meaning nothing lavish or purely personal.
If it's a temporary assignment, it can't exceed one year.
Conventions or industry events can count, but special rules apply for events held outside North America.
Examples of deductible travel expenses
Here's what the IRS generally allows you to deduct, as long as the trip meets the criteria above:
Air, train, bus, or car travel to and from your destination
Transportation between airports, train stations, hotels, and worksites
Shipping of display materials, product samples, or luggage
Business use of your personal vehicle, including mileage, tolls, and parking
Lodging, such as hotels or vacation rentals
Meals
Dry cleaning or laundry
Business-related phone or internet charges
Tips related to any of the above
If you're planning to deduct travel, make sure most of the time on your trip is spent on business, not sightseeing. Also, the expenses of spouses, kids, or friends tagging along aren't deductible unless they're also employees and the trip is work-related for them, too.
The basics to qualify for business travel deductions
You must be traveling away from your "tax home," the general area where your main business is located.
The trip's primary purpose has to be business, even if there's some personal time mixed in.
Expenses must be considered ordinary and necessary in your industry (basically, things that are expected and justifiable).
Travel includes airfare, car rentals, mileage, taxis, tolls, parking, and more.
Lodging includes hotel stays, vacation rentals, or other accommodations.
Meals are 50% deductible, whether it's a solo dinner or lunch with a client.
Event registration fees and equipment rentals (such as a projector or laptop) are also deductible.
Don't forget the minor stuff, such as tips, laundry, shipping, or business calls.
What you can't deduct
Travel and hotel costs for your family or friends, unless they're working with you.
Entertainment expenses, even if they are technically related to business, e.g., no sports games or concerts.
Any part of the trip that's primarily for vacation or leisure.
How to report travel expenses on your taxes
If you're self-employed, report your travel deductions on Schedule C (Form 1040). Farmers use Schedule F. National Guard members and military reservists may qualify to deduct unreimbursed travel tied to their service.
Keep every receipt, canceled check, and record of the expenses. Good recordkeeping is your best defense if the IRS ever comes knocking.
Quick examples: If you take a client out to lunch while on a personal vacation, that meal is deductible. But booking a hotel room for your best friend? That one's on you.
Get help if you need it
Travel deductions can get murky — especially if you're blending personal and business time. We can help you understand what qualifies, how to calculate everything correctly, and how to avoid triggering an audit, because no one wants a tax bill surprise six months after a trip.