Business owners often travel for work purposes once or more per year. Many of the associated expenses can be written off as tax deductions. However, we have to make the standard disclaimer that this article is for information purposes only, and not intended as tax advice. That’s because there are lots of rules about deductible business travel expenses and other write-offs, and we can really only make generalizations here; it’s important to consult a tax professional for personalized guidance on your situation and your tax returns.
With that out of the way, we can certainly give you a good general sense of what you can and cannot write off as deductible business travel expenses. And, of course, remember to save all your receipts.
Basic Rules About Deductible Business Travel Expenses
Here are a few things to keep in mind when considering whether certain expenses can be written off as business travel expenses:
- It’s considered travel if your work requires that you be away from the vicinity of your tax home (your primary location of business) for significantly longer than a typical work day, and you’ll require sleep or rest while there.
- Because travel must be away from your business location for work purposes, you cannot deduct associated travel expenses if you live in a different city than you work in, no matter how far apart. For example, if you live in Jacksonville, Florida and work in Miami, Florida, and you stay in a hotel in Miami during the work week and go back to Jacksonville for the weekend, none of these expenses are tax deductible.
- The expenses must be necessary and reasonable, resulting from your need to travel for business purposes—and not lavish, extravagant, or personal.
- If a family member travels with you for personal reasons, none of their expenses are generally tax deductible.
- Expenses associated with “indefinite travel” for a work assignment—meaning it lasts one year or more—are not deductible business travel expenses. This includes if you expect to work in the location for more than one year, whether or not you do.
- Travel for professional conventions is considered deductible if you can demonstrate that your attendance benefits your business. However, there are many rules concerning international travel to attend a convention, so be sure you talk to a qualified professional about this situation.
- You can only write off the business-related portion when something is also used for personal reasons during a business trip (e.g., a rental car used to travel for business and personal reasons).
Types of Business Travel Expenses You Can Write Off
Speaking generally, here are common deductible business travel expenses. Keep in mind that not all listed items can be written off in all circumstances, nor is this necessarily an exhaustive list of what you might be able to deduct from a particular business trip.
- The transportation costs to and from your destination (plane, train, or bus ticket; standard mileage deduction or actual expenses if you drive your vehicle; cost of a rental vehicle; tolls; etc.)
- Transportation costs of getting to and from business functions (taxi, ridesharing, or public transportation; standard mileage or actual expenses on your personal vehicle; parking; tolls; etc.) as well as travel between the airport/station and your lodgings
- Fees for shipping or traveling with baggage and work materials
- Lodging (but get an itemized bill, because extras like movie rentals and minibar charges aren’t deductible business travel expenses)
- 50 percent of meals (including tips) for non-entertainment purposes, within reason
- Tips for baggage handlers, hotel staff, and on other eligible expenses
- Laundry and dry cleaning costs for work attire
- Internet, telephone, and fax charges or equipment rental fees for business use
- Convention or conference fees