Many people travel for their job — some for an occasional conference and some travel year-round. Whatever their time on the road, business travelers should know how and when to deduct business travel expenses.
What to know about tax deductions for business travel
Business travel deductions are available for certain people who travel away from their home or main place of work for business reasons. A taxpayer is traveling away from home if they are away for longer than an ordinary day’s work and they need to sleep in a location other than their home to meet the demands of their work while away.
Travel expenses must be ordinary and necessary. They can’t be lavish, extravagant or for personal purposes.
Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment is less than one year.
Travel expenses for conventions are deductible if attending them benefits the business. There are special rules for conventions held outside of North America.
Deductible travel expenses include:
- Travel by plane, train, bus or car between home and a business destination
- Fares for taxis or other types of transportation between an airport or train station and a hotel, or from a hotel to a work location
- Shipping of baggage and sample or display material between regular and temporary work locations
- Using a personally owned car for business
- Lodging and meals
- Dry cleaning and laundry
- Business calls and communication
- Tips paid for services related to any of these expenses
- Other similar ordinary and necessary expenses related to the business travel
Taxpayers can find more about the rules for travel deductions with Publication 463, Travel, Gift, and Car Expenses.
Self-employed individuals or farmers with travel deductions
- Self-employed people can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship).
- Farmers can deduct travel expenses on Schedule F (Form 1040), Profit or Loss From Farming.
Travel deductions for Armed Forces reservists
Members of a reserve component of the Armed Forces of the United States can claim a deduction for unreimbursed travel expenses paid during the performance of their duty. These travel expenses must be for travel more than 100 miles away from their home.
Recordkeeping is important
It’s easier to prepare a tax return with organized records. Taxpayers should keep records such as receipts, canceled checks and other documents that support a deduction.