can you claim work travel expenses

Everything You Need to Know About the Business Travel Tax Deduction

Justin is an IRS Enrolled Agent, allowing him to represent taxpayers before the IRS. He loves helping freelancers and small business owners save on taxes. He is also an attorney and works part-time with the Keeper Tax team.

You don’t have to fly first class and stay at a fancy hotel to claim travel expense tax deductions. Conferences, worksite visits, and even a change of scenery can (sometimes) qualify as business travel.

What counts as business travel?

The IRS does have a few simple guidelines for determining what counts as business travel. Your trip has to be:

• Mostly business
• An “ordinary and necessary” expense
• Someplace far away from your “tax home”

What counts as "mostly business"?

The IRS will measure your time away in days. If you spend more days doing business activities than not, your trip is considered "mostly business". Your travel days are counted as work days.

Special rules for traveling abroad

If you are traveling abroad for business purposes, you trip counts as " entirely for business " as long as you spend less than 25% of your time on personal activities (like vacationing). Your travel days count as work days.

So say you you head off to Zurich for nine days. You've got a seven-day run of conference talks, client meetings, and the travel it takes to get you there. You then tack on two days skiing on the nearby slopes.

Good news: Your trip still counts as "entirely for business." That's because two out of nine days is less than 25%.

What is an “ordinary and necessary” expense?

“Ordinary and necessary” means that the trip:

• Makes sense given your industry, and
• Was taken for the purpose of carrying out business activities

If you have a choice between two conferences — one in your hometown, and one in London — the British one wouldn’t be an ordinary and necessary expense.

What is your tax home?

A taxpayer can deduct travel expenses anytime you are traveling away from home but depending on where you work the IRS definition of “home” can get complicated.

Your tax home is often — but not always — where you live with your family (what the IRS calls your "family home"). When it comes to defining it, there are two factors to consider:

• What's your main place of business, and
• How large is your tax home

What's your main place of business?

If your main place of business is somewhere other than your family home, your tax home will be the former — where you work, not where your family lives.

For example, say you:

• Live with your family in Chicago, but
• Work in Milwaukee during the week (where you stay in hotels and eat in restaurants)

Then your tax home is Milwaukee. That's your main place of business, even if you travel back to your family home every weekend.

How large is your tax home?

In most cases, your tax home is the entire city or general area where your main place of business is located.

The “entire city” is easy to define but “general area” gets a bit tricker. For example, if you live in a rural area, then your general area may span several counties during a regular work week.

Rules for business travel

Want to check if your trip is tax-deductible? Make sure it follows these rules set by the IRS.

1. Your trip should take you away from your home base

A good rule of thumb is 100 miles. That’s about a two hour drive, or any kind of plane ride. To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn’t your home.

2. You should be working regular hours

In general, that means eight hours a day of work-related activity.

It’s fine to take personal time in the evenings, and you can still take weekends off. But you can’t take a half-hour call from Disneyland and call it a business trip.

Here's an example. Let’s say you’re a real estate agent living in Chicago. You travel to an industry conference in Las Vegas. You go to the conference during the day, go out in the evenings, and then stay the weekend. That’s a business trip!

3. The trip should last less than a year

Once you’ve been somewhere for over a year, you’re essentially living there. However, traveling for six months at a time is fine!

For example, say you’re a freelancer on Upwork, living in Seattle. You go down to stay with your sister in San Diego for the winter to expand your client network, and you work regular hours while you’re there. That counts as business travel.

What about digital nomads?

With the rise of remote-first workplaces, many freelancers choose to take their work with them as they travel the globe. There are a couple of requirements these expats have to meet if they want to write off travel costs.

Requirement #1: A tax home

Digital nomads have to be able to claim a particular foreign city as a tax home if they want to write off any travel expenses. You don't have to be there all the time — but it should be your professional home base when you're abroad.

For example, say you've rent a room or a studio apartment in Prague for the year. You regularly call clients and finish projects from there. You still travel a lot, for both work and play. But Prague is your tax home, so you can write off travel expenses.

Requirement #2: Some work-related reason for traveling

As long as you've got a tax home and some work-related reason for traveling, these excursion count as business trips. Plausible reasons include meeting with local clients, or attending a local conference and then extending your stay.

However, if you’re a freelance software developer working from Thailand because you like the weather, that unfortunately doesn't count as business travel.

The travel expenses you can write off

As a rule of thumb, all travel-related expenses on a business trip are tax-deductible. You can also claim meals while traveling, but be careful with entertainment expenses (like going out for drinks!).

Here are some common travel-related write-offs you can take.

🛫 All transportation

Any transportation costs are a travel tax deduction. This includes traveling by airplane, train, bus, or car. Baggage fees are deductible, and so are Uber rides to and from the airport.

Just remember: if a client is comping your airfare, or if you booked your ticket with frequent flier miles, then it isn't deductible since your cost was $0.

If you rent a car to go on a business trip, that rental is tax-deductible. If you drive your own vehicle, you can either take actual costs or use the standard mileage deduction. There's more info on that in our guide to deducting car expenses .

Hotels, motels, Airbnb stays, sublets on Craigslist, even reimbursing a friend for crashing on their couch: all of these are tax-deductible lodging expenses.

🥡 Meals while traveling

If your trip has you staying overnight — or even crashing somewhere for a few hours before you can head back — you can write off food expenses. Grabbing a burger alone or a coffee at your airport terminal counts! Even groceries and takeout are tax-deductible.

One important thing to keep in mind: You can usually deduct 50% of your meal costs. For 2021 and 2022, meals you get at restaurants are 100% tax-deductible. Go to the grocery store, though, and you’re limited to the usual 50%.

{upsell_block}

🌐 Wi-Fi and communications

Wi-Fi — on a plane or at your hotel — is completely deductible when you’re traveling for work. This also goes for other communication expenses, like hotspots and international calls.

If you need to ship things as part of your trip — think conference booth materials or extra clothes — those expenses are also tax-deductible.

👔 Dry cleaning

Need to look your best on the trip? You can write off related expenses, like laundry charges.

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Travel expenses you can't deduct

Some travel costs may seem like no-brainers, but they're not actually tax-deductible. Here are a couple of common ones to watch our for.

The cost of bringing your child or spouse

If you bring your child or spouse on a business trip, your travel expense deductions get a little trickier. In general, the cost of bring other people on a business trip is considered personal expense — which means it's not deductible.

You can only deduct travel expenses if your child or spouse:

• Is an employee,
• Has a bona fide business purpose for traveling with you, and
• Would otherwise be allowed to deduct the travel expense on their own

Some hotel bill charges

Staying in a hotel may be required for travel purposes. That's why the room charge and taxes are deductible.

Some additional charges, though, won't qualify. Here are some examples of fees that aren't tax-deductible:

• Gym or fitness center fees
• Movie rental fees
• Game rental fees

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Where to claim travel expenses when filing your taxes

If you are self-employed, you will claim all your income tax deduction on the Schedule C. This is part of the Form 1040 that self-employed people complete ever year.

What happens if your business deductions are disallowed?

If the IRS challenges your business deduction and they are disallowed, there are potential penalties. This can happen if:

• The deduction was not legitimate and shouldn't have been claimed in the first place, or
• The deduction was legitimate, but you don't have the documentation to support it

When does the penalty come into play?

The 20% penalty is not automatic. It only applies if it allowed you to pay substantially less taxes than you normally would. In most cases, the IRS considers “substantially less” to mean you paid at least 10% less.

In practice, you would only reach this 10% threshold if the IRS disqualified a significant number of your travel deductions.

How much is the penalty?

The penalty is normally 20% of the difference between what you should have paid and what you actually paid. You also have to make up the original difference.

In total, this means you will be paying 120% of your original tax obligation: your original obligation, plus 20% penalty.

Justin W. Jones, EA, JD

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How to Deduct Travel Expenses (with Examples)

Reviewed by

November 3, 2022

This article is Tax Professional approved

Good news: most of the regular costs of business travel are tax deductible.

Even better news: as long as the trip is primarily for business, you can tack on a few vacation days and still deduct the trip from your taxes (in good conscience).

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Even though we advise against exploiting this deduction, we do want you to understand how to leverage the process to save on your taxes, and get some R&R while you’re at it.

Follow the steps in this guide to exactly what qualifies as a travel expense, and how to not cross the line.

The travel needs to qualify as a “business trip”

Unfortunately, you can’t just jump on the next plane to the Bahamas and write the trip off as one giant business expense. To write off travel expenses, the IRS requires that the primary purpose of the trip needs to be for business purposes.

Here’s how to make sure your travel qualifies as a business trip.

1. You need to leave your tax home

Your tax home is the locale where your business is based. Traveling for work isn’t technically a “business trip” until you leave your tax home for longer than a normal work day, with the intention of doing business in another location.

2. Your trip must consist “mostly” of business

The IRS measures your time away in days. For a getaway to qualify as a business trip, you need to spend the majority of your trip doing business.

For example, say you go away for a week (seven days). You spend five days meeting with clients, and a couple of days lounging on the beach. That qualifies as business trip.

But if you spend three days meeting with clients, and four days on the beach? That’s a vacation. Luckily, the days that you travel to and from your location are counted as work days.

3. The trip needs to be an “ordinary and necessary” expense

“Ordinary and necessary ” is a term used by the IRS to designate expenses that are “ordinary” for a business, given the industry it’s in, and “necessary” for the sake of carrying out business activities.

If there are two virtually identical conferences taking place—one in Honolulu, the other in your hometown—you can’t write off an all-expense-paid trip to Hawaii.

Likewise, if you need to rent a car to get around, you’ll have trouble writing off the cost of a Range Rover if a Toyota Camry will get you there just as fast.

What qualifies as “ordinary and necessary” can seem like a gray area at times, and you may be tempted to fudge it. Our advice: err on the side of caution. if the IRS chooses to investigate and discovers you’ve claimed an expense that wasn’t necessary for conducting business, you could face serious penalties .

4. You need to plan the trip in advance

You can’t show up at Universal Studios , hand out business cards to everyone you meet in line for the roller coaster, call it “networking,” and deduct the cost of the trip from your taxes. A business trip needs to be planned in advance.

Before your trip, plan where you’ll be each day, when, and outline who you’ll spend it with. Document your plans in writing before you leave. If possible, email a copy to someone so it gets a timestamp. This helps prove that there was professional intent behind your trip.

The rules are different when you travel outside the United States

Business travel rules are slightly relaxed when you travel abroad.

If you travel outside the USA for more than a week (seven consecutive days, not counting the day you depart the United States):

You must spend at least 75% of your time outside of the country conducting business for the entire getaway to qualify as a business trip.

If you travel outside the USA for more than a week, but spend less than 75% of your time doing business, you can still deduct travel costs proportional to how much time you do spend working during the trip.

For example, say you go on an eight-day international trip. If you spend at least six days conducting business, you can deduct the entire cost of the trip as a business expense—because 6 is equivalent to 75% of your time away, which, remember, is the minimum you must spend on business in order for the entire trip to qualify as a deductible business expense.

But if you only spend four days out of the eight-day trip conducting business—or just 50% of your time away—you would only be able to deduct 50% of the cost of your travel expenses, because the trip no longer qualifies as entirely for business.

List of travel expenses

Here are some examples of business travel deductions you can claim:

• Plane, train, and bus tickets between your home and your business destination
• Baggage fees
• Laundry and dry cleaning during your trip
• Rental car costs
• Hotel and Airbnb costs
• 50% of eligible business meals
• 50% of meals while traveling to and from your destination

On a business trip, you can deduct 100% of the cost of travel to your destination, whether that’s a plane, train, or bus ticket. If you rent a car to get there, and to get around, that cost is deductible, too.

The cost of your lodging is tax deductible. You can also potentially deduct the cost of lodging on the days when you’re not conducting business, but it depends on how you schedule your trip. The trick is to wedge “vacation days” in between work days.

Here’s a sample itinerary to explain how this works:

Thursday: Fly to Durham, NC. Friday: Meet with clients. Saturday: Intermediate line dancing lessons. Sunday: Advanced line dancing lessons. Monday: Meet with clients. Tuesday: Fly home.

Thursday and Tuesday are travel days (remember: travel days on business trips count as work days). And Friday and Monday, you’ll be conducting business.

It wouldn’t make sense to fly home for the weekend (your non-work days), only to fly back into Durham for your business meetings on Monday morning.

So, since you’re technically staying in Durham on Saturday and Sunday, between the days when you’ll be conducting business, the total cost of your lodging on the trip is tax deductible, even if you aren’t actually doing any work on the weekend.

It’s not your fault that your client meetings are happening in Durham—the unofficial line dancing capital of America .

Meals and entertainment during your stay

Even on a business trip, you can only deduct a portion of the meal and entertainment expenses that specifically facilitate business. So, if you’re in Louisiana closing a deal over some alligator nuggets, you can write off 50% of the bill.

Just make sure you make a note on the receipt, or in your expense-tracking app , about the nature of the meeting you conducted—who you met with, when, and what you discussed.

On the other hand, if you’re sampling the local cuisine and there’s no clear business justification for doing so, you’ll have to pay for the meal out of your own pocket.

Meals and entertainment while you travel

While you are traveling to the destination where you’re doing business, the meals you eat along the way can be deducted by 50% as business expenses.

This could be your chance to sample local delicacies and write them off on your tax return. Just make sure your tastes aren’t too extravagant. Just like any deductible business expense, the meals must remain “ordinary and necessary” for conducting business.

How Bench can help

Surprised at the kinds of expenses that are tax-deductible? Travel expenses are just one of many unexpected deductible costs that can reduce your tax bill. But with messy or incomplete financials, you can miss these tax saving expenses and end up with a bigger bill than necessary.

Enter Bench, America’s largest bookkeeping service. With a Bench subscription, your team of bookkeepers imports every transaction from your bank, credit cards, and merchant processors, accurately categorizing each and reviewing for hidden tax deductions. We provide you with complete and up-to-date bookkeeping, guaranteeing that you won’t miss a single opportunity to save.

Want to talk taxes with a professional? With a premium subscription, you get access to unlimited, on-demand consultations with our tax professionals. They can help you identify deductions, find unexpected opportunities for savings, and ensure you’re paying the smallest possible tax bill. Learn more .

Bringing friends & family on a business trip

Don’t feel like spending the vacation portion of your business trip all alone? While you can’t directly deduct the expense of bringing friends and family on business trips, some costs can be offset indirectly.

Driving to your destination

Have three or four empty seats in your car? Feel free to fill them. As long as you’re traveling for business, and renting a vehicle is a “necessary and ordinary” expense, you can still deduct your business mileage or car rental costs even when others join you for the ride.

One exception: If you incur extra mileage or “unnecessary” rental costs because you bring your family along for the ride, the expense is no longer deductible because it isn’t “necessary or ordinary.”

For example, let’s say you had to rent an extra large van to bring your children on a business trip. If you wouldn’t have needed to rent the same vehicle to travel alone, the expense of the extra large van no longer qualifies as a business deduction.

Renting a place to stay

Similar to the driving expense, you can only deduct lodging equivalent to what you would use if you were travelling alone.

However, there is some flexibility. If you pay for lodging to accommodate you and your family, you can deduct the portion of lodging costs that is equivalent to what you would pay only for yourself .

For example, let’s say a hotel room for one person costs $100, but a hotel room that can accommodate your family costs $150. You can rent the $150 option and deduct $100 of the cost as a business expense—because $100 is how much you’d be paying if you were staying there alone.

This deduction has the potential to save you a lot of money on accommodation for your family. Just make sure you hold on to receipts and records that state the prices of different rooms, in case you need to justify the expense to the IRS

Heads up. When it comes to AirBnB, the lines get blurry. It’s easy to compare the cost of a hotel room with one bed to a hotel room with two beds. But when you’re comparing significantly different lodgings, with different owners—a pool house versus a condo, for example—it becomes hard to justify deductions. Sticking to “traditional” lodging like hotels and motels may help you avoid scrutiny during an audit. And when in doubt: ask your tax advisor.

So your trip is technically a vacation? You can still claim any business-related expenses

The moment your getaway crosses the line from “business trip” to “vacation” (e.g. you spend more days toasting your buns than closing deals) you can no longer deduct business travel expenses.

Generally, a “vacation” is:

• A trip where you don’t spend the majority of your days doing business
• A business trip you can’t back up with correct documentation

However, you can still deduct regular business-related expenses if you happen to conduct business while you’re on vacay.

For example, say you visit Portland for fun, and one of your clients also lives in that city. You have a lunch meeting with your client while you’re in town. Because the lunch is business related, you can write off 50% of the cost of the meal, the same way you would any other business meal and entertainment expense . Just make sure you keep the receipt.

Meanwhile, the other “vacation” related expenses that made it possible to meet with this client in person—plane tickets to Portland, vehicle rental so you could drive around the city—cannot be deducted; the trip is still a vacation.

If your business travel is with your own vehicle

There are two ways to deduct business travel expenses when you’re using your own vehicle.

• Actual expenses method
• Standard mileage rate method

Actual expenses is where you total up the actual cost associated with using your vehicle (gas, insurance, new tires, parking fees, parking tickets while visiting a client etc.) and multiply it by the percentage of time you used it for business. If it was 50% for business during the tax year, you’d multiply your total car costs by 50%, and that’d be the amount you deduct.

Standard mileage is where you keep track of the business miles you drove during the tax year, and then you claim the standard mileage rate .

The cost of breaking the rules

Don’t bother trying to claim a business trip unless you have the paperwork to back it up. Use an app like Expensify to track business expenditure (especially when you travel for work) and master the art of small business recordkeeping .

If you claim eligible write offs and maintain proper documentation, you should have all of the records you need to justify your deductions during a tax audit.

Speaking of which, if your business is flagged to be audited, the IRS will make it a goal to notify you by mail as soon as possible after your filing. Usually, this is within two years of the date for which you’ve filed. However, the IRS reserves the right to go as far back as six years.

Tax penalties for disallowed business expense deductions

If you’re caught claiming a deduction you don’t qualify for, which helped you pay substantially less income tax than you should have, you’ll be penalized. In this case, “substantially less” means the equivalent of a difference of 10% of what you should have paid, or $5,000—whichever amount is higher.

The penalty is typically 20% of the difference between what you should have paid and what you actually paid in income tax. This is on top of making up the difference.

Ultimately, you’re paying back 120% of what you cheated off the IRS.

If you’re slightly confused at this point, don’t stress. Here’s an example to show you how this works:

Suppose you would normally pay $30,000 income tax. But because of a deduction you claimed, you only pay $29,000 income tax.

If the IRS determines that the deduction you claimed is illegitimate, you’ll have to pay the IRS $1200. That’s $1000 to make up the difference, and $200 for the penalty.

Form 8275 can help you avoid tax penalties

If you think a tax deduction may be challenged by the IRS, there’s a way you can file it while avoiding any chance of being penalized.

File Form 8275 along with your tax return. This form gives you the chance to highlight and explain the deduction in detail.

In the event you’re audited and the deduction you’ve listed on Form 8275 turns out to be illegitimate, you’ll still have to pay the difference to make up for what you should have paid in income tax—but you’ll be saved the 20% penalty.

Unfortunately, filing Form 8275 doesn’t reduce your chances of being audited.

Where to claim travel expenses

If you’re self-employed, you’ll claim travel expenses on Schedule C , which is part of Form 1040.

When it comes to taking advantage of the tax write-offs we’ve discussed in this article—or any tax write-offs, for that matter—the support of a professional bookkeeping team and a trusted CPA is essential.

Accurate financial statements will help you understand cash flow and track deductible expenses. And beyond filing your taxes, a CPA can spot deductions you may have overlooked, and represent you during a tax audit.

Learn more about how to find, hire, and work with an accountant . And when you’re ready to outsource your bookkeeping, try Bench .

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• Credits and deductions
• Business expenses

Can I deduct travel expenses?

By turbotax • 578 • updated 10 months ago.

If you’re self-employed or own a business , you can deduct work-related travel expenses, including vehicles, airfare, lodging, and meals. The expenses must be ordinary and necessary.

For vehicle expenses, you can choose between the standard mileage rate or the actual cost method where you track what you paid for gas and maintenance.

You can generally only claim 50% of the cost of your meals while on business-related travel away from your tax home, provided your trip requires an overnight stay. You can also deduct 50% of the cost of meals for entertaining clients (regardless of location), but due to the Tax Cuts and Jobs Act of 2017 (TCJA), you can no longer deduct entertainment expenses in tax years 2018 through 2025. In 2021 and 2022, the law allows a deduction for 100% of your cost of food and beverages that are provided by a restaurant, instead of the usual 50% deduction.

On the other hand, employees can no longer deduct out-of-pocket travel costs in tax years 2018 through 2025 per the TCJA (this does not apply to Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses). Prior to the tax rule change, employees could claim 50% of the cost of unreimbursed meals while on business-related travel away from their tax home if the trip required an overnight stay, as well as other unreimbursed job-related travel costs. These expenses were handled as a 2% miscellaneous itemized deduction.

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Here's how to claim work expenses when filing your taxes

You can claim work expenses if you're a freelancer or business owner, but W-2 employees are limited in what they can claim.

The way we work has shifted significantly over the past two years -- and if you were part of the Great Resignation, you might have even started your own business or opted for a freelance or a remote position. More people have had to navigate working from home and the workplace expenses that come with it. And currently, the best-known employment-related tax deduction -- for home office expenses -- is reserved for those who are both self-employed and have a dedicated home space for working. 

• Everything you need to know about when to file your 2021 tax return with the IRS
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Still, there are a handful of other work-related expenses that both corporate employees and the self-employed may be eligible to claim on  their taxes  this season. Remember: For most taxpayers, the deadline to submit your 2021 federal tax return or request for an extension is Monday, Apr. 18, 2022. 

Here's an overview of work expenses and deductions on your taxes.

Claiming work expenses: First, choose a deduction

Before you start going through every line item of every receipt, you may want to save yourself the trouble and figure out which you'll take: the standard deduction or the itemized deduction.

Standard deduction: The standard deduction is an all-encompassing flat rate, no questions asked. For tax year 2021, the flat rate is $12,550 for single filers and those married filing separately. The rate is $25,100 for married filing jointly. Taking this route is much easier than itemizing.

Itemized deduction: If you want to claim work expenses, medical payments, charitable contributions or other expenses, you'll use the itemized deduction. It's more time-consuming than the standard deduction -- and you'll need proof of the expenses you wish to deduct.

If you're going to claim and itemize your work expenses, you'll need to complete Schedule A of Form 1040 . You need to have sufficient proof for each itemized expense, which means tracking down receipts. If your standard deduction is greater than the sum of your itemized deductions, save yourself the trouble and take the flat rate. 

• Best tax software for 2022: TurboTax, H&R Block, Jackson Hewitt and others compared

Common tax deductions to claim

Before you start adding up all the line-items, make sure you know what's covered and what isn't. Here are some of the most common deductions for folks working from home.

1. Home office deduction

The home office deduction may be the largest deduction available if you're self-employed. If you work 100% remotely as a W-2 employee, you do not qualify for this deduction. The other main requirement is that the space be reserved for and dedicated entirely to your work.

"Can you deduct a home office if you work at your kitchen table? Unfortunately, no," says Lisa Greene-Lewis, CPA, and tax expert with TurboTax said. "You not only have to be self-employed -- but have a dedicated space in your home that is exclusively related to your business. You can't deduct the space at your kitchen table if your family also eats dinner there."

If you have a dedicated workspace at home, you can use the IRS  regular method or simplified option , though you can't use a combination of them in a single tax year. Some things that qualify for home office deductions:

• Insurance:  You can deduct a percentage of your home insurance that covers the business space in your home.
• Utilities: Expenses for utilities, like electricity and gas, can be deducted -- but only the percentage used in your home office.
• Depreciation: If you own your home, you can deduct the cost of wear and tear on the portion used exclusively for business. 

All of these calculations are based on the percentage of your home that you use for business. To find the percentage, compare the size of space you use for business to that of your entire home, and then apply the percentage to the specific expenses. For instance, if your home is 1,800 square feet total, and your home office measures 300 square feet, your home office deductions could be applied at a rate of 16%.

Greene-Lewis says that if you take the simplified option, you can deduct $5 per square foot, up to 300 square feet, or $1,500 total. This would be an alternative to calculating the various individual home expenses.

If you're self-employed or own your own business, regular commutes from your home to work are considered non-deductible personal expenses. If you have to commute between multiple locations or travel for work, however, some of those costs may be deductible. Flights, hotel rooms, rental cars, meals and tips for service are all considered travel expenses , if they're business-related. If a passport is required for your travel, you can claim that as well.

In the past, mileage accrued while driving your own car for business travel was an expense you could claim on your taxes -- but the  Tax Cuts and Jobs Act  of 2017 eliminated that for employees. The self-employed and business owners, however, are still eligible for this deduction.

3. Work uniform

If you have to buy clothes that you only wear for work, some individuals may be able to write off the cost. For example, if you're a qualifying performing artist, you may be able to deduct the cost of costumes or other theatrical clothing that you can't wear everyday. You must fall under one of a  few specific categories in order to claim this deduction, though, due to the TCJA tax changes.

4. Continuing education and certifications

If you're self-employed, or work for an employer and fall into one of these IRS categories , you may be able to can claim the enrollment cost of any required continuing education courses, classes or certifications. You may also be able to deduct professional organization dues and fees -- as long as the organization isn't political. 

If you're a teacher, the Teacher Education Deduction lets you claim up to $250 of out-of-pocket costs related to teaching supplies. And Green-Lewis says if you and your partner are both teachers, you both can claim the deduction.

5. Supplies

If you own your own business, you can deduct the cost of some business supplies. And the deduction threshold is generous.

"Self-employed business owners can deduct up to $1,020,000 for qualified business equipment like computers, printers and office furniture," Greene-Lewis says.

Your tax questions, answered:

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• Boost your refund with these 13 tax deductions and credits
• Tax Season 2022: 7 ways to dodge an IRS audit

• Life Stages
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• View all Tax Center topics

Is Your Working Vacation Tax Deductible?

Would it not be nice to take a fantastic trip to a big city with endless things to do, and have the IRS let you take a tax deduction for it? In fact, with careful planning and detailed record keeping, the “bizcation” dream could easily be made a reality.

If your trip is primarily for business reasons and the stay is long enough to require sleep to continue business activities, transportation expenses are generally fully deductible. On the days where you conduct business, you are able to deduct 50% of your business-related food and entertainment costs and fully deduct other ordinary and reasonable expense incurred to do your business — i.e., lodging, taxis, rental cars, etc.

Planning Your Work Trip Is Key

The key to maximizing the business travel deduction is to plan meetings wisely to schedule in some “me” time to do some sightseeing. Travel days count as business days. Weekends and holidays falling between business days also count as business days. So, if you fly in early on Thursday to get a lower airfare or another common-sense reason not merely to extend your stay for personal purposes, you have a fully deductible business day to enjoy a nice city. A work meeting on Friday and another on Monday would mean that the weekend nights are business days for purposes of deducting lodging and meals. Staying longer than the workdays will not allow additional deductions for lodgings or meals for those personal days, but the transportation cost to the city would still be fully deductible.

With Working Vacations, The Proof is Always in the Pudding

It’s very important that you substantiate the business justification for deducting any expense on your taxes. However, travel and entertainment deductions are often abused and closely scrutinized by the IRS. You should retain any and all documentation that provides insight into the business activity you conduct while on your trip. Receipts are just the bare minimum here — keep itineraries, meeting agendas, and the like. If you have a smart phone, there are many applications that make it easy and simple to keep detailed information on your phone while on the go.

Bringing the Family Along

If you want to bring your significant other or maybe even your kids, you have to do a little extra planning. The key here is that you are only able to deduct expenses that only you would deduct if you traveled alone. Only your airfare is deductible, you may not deduct the travel costs of family. However, if you drive, the expenses associated with that drive are deducted because the expenses would be the same if you did not have a car full of family. Additionally, only your meals and business entertainment and those of business associates are eligible for the fifty percent deduction.

The bottom line is that you must be reasonable when claiming travel and entertainment deductions and keep meticulous tax return records . If contested, you should be able to show that your “bizcation” remained primarily for business purposes and did not co-mingle personal expenses with deductible business expenses.

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Are Unreimbursed Employee Expenses Deductible?

The miscellaneous itemized deduction for unreimbursed employee expenses was suspended from 2018 to 2025 by the Tax Cuts and Jobs Act of 2017. However, reservists, performing artists, fee-basis government, disabled workers with impairment-related work expenses, and educators can still deduct certain job-related expenses that aren’t reimbursed.

Who can deduct unreimbursed employee expenses?

What unreimbursed employee expenses are deductible, how to claim a deduction for unreimbursed employee expenses, deducting unreimbursed employee expenses before 2018 and after 2025.

Key Takeaways

• Unreimbursed employee expenses were once broadly deductible for W-2 employees, but the Tax Cuts and Jobs Act of 2017 suspended the deductions for most workers from 2018 to 2025.
• A select group of workers, including armed forces reservists, performing artists, fee-basis government officials, disabled employees with impairment-related work expenses, and educators, can still deduct certain unreimbursed employee expenses.
• Certain workers must use Form 2106 to calculate deductible unreimbursed employee expenses and report them either as an "above-the-line" deduction on Schedule 1 or as an itemized deduction on Schedule A, depending on their situation.
• The deduction for unreimbursed employee expenses is currently set to be reinstated for all W-2 employees in 2026, but this could change with future congressional action.

Sometimes you might have to dip into your own pocket to buy something you need for work. It could be a uniform, airplane ticket, or special piece of equipment. Or you might have to drive your own car to a conference or other work-related event. If your employer doesn’t pay you back, you might be able to deduct the unreimbursed employee expense on your tax return.

Once upon a time, any worker could deduct a wide variety of unreimbursed employee expenses to the extent they, along with various other miscellaneous itemized deductions, were more than 2% of your adjusted gross income (AGI). However, the Tax Cuts and Jobs Act (TCJA) of 2017 suspended that deduction from 2018 to 2025.

Nevertheless, a handful of workers can still write off certain unreimbursed employee expenses this year. Plus, most of these workers can claim a job-related expense deduction and the Standard Deduction at the same time, which wasn’t allowed for the wider deduction put on hold by the TCJA. 

While most W-2 employees can’t deduct out-of-pocket work expenses anymore, the following workers can still write off certain unreimbursed costs required for their job.

Armed forces reservists. Members of the U.S. Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve; Army National Guard; Air National Guard; and Reserve Corps of the Public Health Service can deduct certain reserve-related travel expenses.

Qualified performing artists. If you’re an actor, musician, or other type of performing artist, you can deduct unreimbursed job-related expenses if you satisfy all of the following requirements:

• You were employed as a performing artist by at least two employers during the tax year.
• You received wages of $200 or more per employer from at least two of those employers.
• You had allowable work-related expenses connected to the performing arts that’s more than 10% of your gross income from the performing arts.
• Your AGI is $16,000 or less before deducting work-related expenses.

If you’re married, you must file a joint return to deduct job-related expenses, unless you didn’t live with your spouse at any point during the tax year.

Fee-basis government officials. You can deduct eligible employee expenses if you’re employed by a state or local government and are compensated, in whole or in part, on a fee basis.

Disabled employees with impairment-related work expenses. This category of workers includes people with physical or mental disabilities. Impairment-related work expenses include the cost of attendant care at your place of employment and other workplace-related expenses that are necessary for you to be able to work.

Educators. K-12 teachers, instructors, counselors, principals, and aides who are in school for at least 900 hours during a school year can also deduct certain job-related expenses.

Also note that self-employed people can deduct their own business expenses on Schedule C (Form 1040). However, this is different from tax write-offs by W-2 employees for their unreimbursed job-related expenses.

Not every job-related expense paid by an employee described above is deductible. For instance, only “ordinary and necessary” expenses can be deducted. According to the IRS, an expense is ordinary if it’s common and accepted in your trade, business, or profession. An expense is necessary if it’s appropriate and helpful to your business, but it doesn't have to be required to be considered necessary.

Plus, even if an expense is “ordinary and necessary,” there may be additional limitations on the amount you can deduct. And, of course, the costs can’t be reimbursed by your employer.

Common employee expenses that typically satisfy the “ordinary and necessary” requirement include (along with related limitations):

• Clothing required for work – If you fall into one of the employee groups listed above, you might be able to deduct uniforms or other clothing that’s required for work and not suitable for wearing outside of work. The cost of cleaning uniforms or work clothes isn’t deductible.
• Education related to your job – Qualified employees may be able to deduct expenses for work-related education, such as tuition, fees, books, related transportation, and the like. However, the education must be (1) to maintain or improve skills needed in your present work, or (2) required by your employer or the law to keep your present salary, status or job. The education can't be part of a program that will qualify you for a new trade or business or that you need to meet the minimal educational requirements of your present trade or business.
• Gifts – If you give a gift to a client and other person you do business with and aren’t reimbursed by your employer, you might be able to deduct the cost of the gift. However, the deduction is generally limited to $25 for each person receiving a gift during the year.
• Meals – The cost of business meals may be deductible if you’re not reimbursed for them. This includes meals while traveling overnight for your job. However, the deduction is generally limited to 50% of meal costs, which is based on either the standard meal allowance or the amount you actually paid for each meal (see IRS Publication 463 for information about the standard meal allowance). Meals costs that aren’t separated from entertainment costs generally can’t be deducted.
• Travel for business – Unreimbursed expenses for lodging and transportation when traveling overnight away from your regular or main place of business might be deductible. This includes the cost of airfare, baggage fees, hotels, car rentals, taxi cabs, tips, and similar travel-related expenses. However, you generally can't deduct travel expenses if you’re away for more than one year.
• Tools used for work – You might be able to deduct the cost of tools used in your work if they wear out and are thrown away within one year from the date of purchase.
• Union dues – A deduction may generally be taken for union dues paid by an eligible worker. However, a deduction isn’t allowed for any portion of union dues used for sick, accident, or death benefits, or for a pension fund.
• Vehicle expenses – If you use your own car or truck at work, you might be able to deduct related expenses that aren’t reimbursed. The deduction is based on either the standard mileage rate or your actual expenses . Parking fees, tolls, and the like are included, but regular commuting expenses aren’t (i.e., for travel between your home and regular workplace).

However, there are also additional restrictions in place for some of the employee groups listed above. As a result, even if you’re a member of one of the listed groups, you still might not be able to deduct an “ordinary and necessary” job-related expense.

For example, reservists can only deduct expenses related to travel as a member of the reserves that’s more than 100 miles from home. The deduction is also limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and standard mileage rate (for car expenses), plus any parking fees, ferry fees, and tolls.

Disabled employees can only deduct impairment-related work expenses.

And educators can only deduct up to $300 of qualified expenses (2023 and 2024 amount), which include ordinary and necessary expenses paid for either:

• Professional development courses related to the curriculum or students they teach.
• Books, supplies, equipment, and other materials used in the classroom.

TurboTax Tip: If you’re entitled to reimbursement of an employee expense, make sure you follow your employer’s procedures for being reimbursed. If you don’t seek reimbursement, you can’t deduct the expense.

How you report deductions for unreimbursed employee expenses depends on the type of qualified employee you are.

Reservists, performing artists, and fee-basis government officials must first complete Form 2106 to calculate the deductible amount. The deduction is then reported as an “above-the-line” deduction on Schedule 1 (Form 1040). Since it’s an above-the-line deduction (i.e., reported above the line on your tax return showing your AGI), you can take it whether you claim the Standard Deduction or itemize deductions .

Disabled workers with impairment-related work expenses must also use Form 2106 to calculate their deduction. But their deductions are reported as an itemized deduction on Schedule A (Form 1040). As a result, you can’t claim the deduction for impairment-related expenses if you take the Standard Deduction (since you must choose between the Standard Deduction and itemized deductions).

Teachers and other educators deducting professional development courses or classroom materials don’t have to fill out Form 2106. Instead, they can report their deduction directly on Schedule 1 (Form 1040) as an above-the-line deduction. That means the educator expense deduction can be claimed along with the Standard Deduction.

Also make sure you keep any tax records needed to verify deductions you claim for job-related expenses. If the IRS questions your deduction, you’ll need receipts, pay stubs, canceled checks, bank statements, or other documents to prove you paid for the deductible expenses and weren’t reimbursed for them.

Before 2018, all W-2 employees could deduct ordinary and necessary employee expenses that weren’t reimbursed. However, in most cases, the deduction had to be taken as a miscellaneous itemized deduction subject to the 2%-of-AGI rule. That meant you couldn’t take the Standard Deduction if you wanted to claim an employee expense deduction, and the deduction was only available to the extent your miscellaneous itemized deductions were more than 2% of your AGI.

For instance, if your employee expense deduction and other miscellaneous itemized deductions equaled $1,200 and your AGI was $50,000 in 2017, you could only deduct $200. That’s the amount exceeding $1,000, which is 2% of a $50,000 AGI ($50,000 x .02 = $1,000).

Reservists, performing artists, fee-basis government officials, and educators could still deduct eligible employee expenses as an above-the-line deduction instead of as a miscellaneous itemized deduction.

The TCJA provision suspending miscellaneous itemized deductions expires after the 2025 tax year. So, at this time, the deduction for unreimbursed employee expenses is scheduled to be reinstated for all W-2 employees in 2026. But that could change, since Congress is expected to examine the expiring provisions of the TCJA before 2026. Stay tuned as new information becomes available.

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TurboTax Online: Important Details about Filing Simple Form 1040 Returns

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Examples of situations included in a simple Form 1040 return (assuming no added tax complexity):

• Interest, dividends or original issue discounts (1099-INT/1099-DIV/1099-OID) that don’t require filing a Schedule B
• IRS standard deduction
• Earned Income Tax Credit (EITC)
• Child Tax Credit (CTC)
• Student loan interest deduction
• Taxable qualified retirement plan distributions

Examples of situations not included in a simple Form 1040 return:

• Itemized deductions claimed on Schedule A, like charitable contributions, medical expenses, mortgage interest and state and local tax deductions
• Unemployment income reported on a 1099-G
• Business or 1099-NEC income (often reported by those who are self-employed, gig workers or freelancers)
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How to find deductions for travel expenses

With more consultants and business travelers hitting the road for business travel, it's time for a brush-up on what expenses are eligible for tax deduction while they're away. If you're unsure about what qualifies, read on.

Find out more about Business Taxes

by   Grace L. Williams

​Grace L. Williams is a journalist. Her areas of expertise include small business, career, personal finance, and inve...

Read more...

Updated on: October 27, 2023 · 15 min read

Key takeaways

What is business travel or a business trip, what is a business-related travel expense, what business travel expenses are tax deductible, are there other tax deductions for travel expenses, tracking expenses on your business trip, importance of documentation, combining business and personal travel, special considerations for self-employed individuals, getting help with tax deductions for travel expenses, frequently asked questions.

Business travel is back after the pandemic, and with that increase comes the age-old question every business traveler must ask at least once: "What can I deduct as a business expense while I'm on the road?"

You've likely heard the term "write-off" somewhere and may have used it somewhere within your business circles. But what exactly is it? You might wonder if you can book first-class travel or five-star lodging and eat in fancy dining establishments and then submit them as business write-offs. The short, overarching rule for those specifics is no, you probably cannot, but there is more to eligible business travel expenses than that.

So before you book travel arrangements on your credit card (hopefully a designated business credit card), read on for more information about making expensing your business travel less stressful.

• Understand IRS guidelines for deductible travel expenses to maximize tax savings.
• Proper documentation is essential for claiming deductions, including meals and entertainment, with a clear business justification.
• Utilize tax professionals and leverage technology to ensure accurate deductions, compliance with laws, and maximum savings on travel expense deductions.

Simply put, business travel or a business trip is defined as any travel conducted that is business-related. To be considered eligible as a business trip, the travel itself must meet the following criteria:

• The trip must be conducted for legitimate business purposes, not as leisure time, vacation, or personal purposes.
• The trip must occur outside the bounds of a regular commute to and from work (or the main place of business) and home.

If the trip meets these criteria, it falls under the category of a business trip. It also means that you can deduct travel expenses whether you are a business owner sending an employee on your behalf or a self-employed individual.

To better understand business-related travel expenses, it's a good idea to look at overall business expenses. A business expense is incurred as part of the regular day-to-day operations of your employer (or for you if you are a self-employed individual) to conduct the business. Under current Internal Revenue Service (IRS) laws, special rules allow portions of business expenses to be deducted from the overall business income. These expenses are considered tax deductible, which means they are applied before any taxes are. The umbrella term "write-off" comes from this business tax deduction category.

In business, eligible tax deductions can have a significant impact. Being able to deduct expenses can often  reduce the total overall taxable income . Cumulatively, tax-deductible expenses will likely reduce the total bill when it is time to file your tax return.

A deductible business travel expense is one that you or an employee incur during travel directly related to conducting business. In both instances (a business expense or a business travel expense), it is essential to ensure the expense falls under the category of being for bona fide business purposes. This means that deducting the travel expenses must be something genuinely related to conducting or doing a bona fide business purpose. If it is, its cost can be written off as part of business or business travel-related expenses. It applies to self-employed individuals or employees traveling for an employer or business owner.

So what exactly can you expense?

First and foremost, consider the basics, or the "Big 3" in business travel. Essentials here include these three actual expenses: costs related to how you will get to your destination (travel), where you will stay (lodging), and what you will eat and drink when you are there and in transit. Each category within the Big Three can be an eligible travel expense and, therefore, a tax write-off, but they come with some criteria worth exploring.

Transportation expenses:  If you plan to travel by car, and you will either use a vehicle you lease long-term or your car, there are two choices related to how this mode of transportation might be expensed. One choice is known as the “ standard mileage rate ." Under current IRS allowances, the standard mileage rate deduction for self-employed individuals and employees is 65.5 cents per mile for business-related travel. The rate per mile would apply to any driving conducted to or from the business destination. It would also apply to any driving conducted while you are at the destination if it is business-related. For instance, once at the destination, if driving must be done to run errands, those miles can be added to the total mileage count.

The other vehicle expense option for a business trip is to itemize the individual expenses. Eligible business costs, in this instance, include the lease, insurance, fuel, costs related to the upkeep and maintenance of the vehicle, such as oil changes or tune-ups, and any major repairs on the vehicle, such as fixing a flat tire.

If you are renting a car as part of your transportation expenses and it falls under the ordinary and necessary business travel expense category, the cost to rent a car would qualify as an eligible business expense. Other vehicle-related expenses that qualify for travel deductions include tolls and parking fees.

Actual expenses method

The actual expenses method involves calculating the total cost of vehicle use and multiplying it by the percentage used for business purposes. This includes:

• Depreciation
• Garage rent
• Vehicle registration fees
• Lease payments

To calculate the percentage of business use, divide the total business miles driven by the total miles driven in the year. While this method can lead to larger deductions, it requires detailed record-keeping and more complex calculations than the standard mileage method.

Standard mileage rate

The standard mileage rate allows you to claim a fixed rate per mile driven for business purposes, plus parking fees and tolls. The standard mileage rate for business in the United States is 65.5 cents per mile. The IRS determines This rate annually based on a study of the fixed and variable costs of operating a vehicle for business reasons, such as gas, maintenance, and depreciation.

This method can be used for self-employment, business-related travel, or when using a vehicle for work as an independent contractor. However, personal use of the vehicle is not eligible for this deduction.

Ticketed travel:  For ticketed travel, like flights or trips by train, the cost of your ticket can be expensed as a travel deduction if your class fare qualifies as an eligible and reasonable expense. This means that while you likely won't be able to deduct first-class fare, you can deduct what is known as the ordinary and necessary expense related to the fare, which covers classes such as economy. You can also expense costs incurred while en route, such as baggage fees. And, if you are waiting at an airport or train station, any meal costs, snacks, or drinks would also qualify as business-related expenses.

Meal expenses and entertainment:  Business meals cut eligible business expenses but with some stipulations, including the standard meal allowance. While current IRS laws permit for up to 50% of a business meal to be deducted, like ticketed travel, rental cars, and other business-travel-related costs, the meal must fall under an ordinary and necessary expense to be eligible as a tax-deductible business expense. If you are tempted to go all out and splurge on your dining, you might find that it is not an eligible business travel expense.

But changes have been made to the entertainment category. While entertainment used to be an allowed business expense, it is sometimes no longer eligible to claim tax deductions. This means that if you expect to take clients out as part of client meetings or conduct business, be sure to read the fine print since you might discover you cannot claim entertainment as a legitimate business expense.

Lodging expenses:  Business travelers must consider where they will sleep while away. To be considered eligible as a business expense, the location of your stay must be outside of the main place of business and require overnight accommodation. Notably, in this expense category, IRS rules stipulate that for it to be an eligible business expense, the lodging cannot fall into the extravagant or considered recreational category.

Remember:  With each of the "Big 3" and all other related business expenses to be deducted, the expenses must be ordinary and fall under the category of reasonable business expenses. If you opt for pricey vehicles, tickets, meals, and rooms instead of the available moderately-priced alternatives, you risk losing eligibility as legitimate business expenses.

There are some other expenses anyone traveling for business should consider submitting as tax-deductible expenses.

Event fees:  These could come into play if you travel to an event such as a conference, convention, or trade show. In addition to the Big 3, certain expenses related to attending these events would qualify as eligible business travel expenses. The expenses are deductible if the event has an entry or booth fee. While you are there, if you attend workshops, lectures, or courses that require materials such as a workbook or registration, these would also be eligible as tax-deductible travel expenses. And, if you are running a booth or table at an event and need materials or supplies, the cost to purchase them would also qualify as legitimate business expenses.

Incidental expenses:  Any reasonable additional expenses you incur while traveling for a business activity can be considered incidental expenses. For instance, if you incur expenses on ground transportation, a rideshare fee, taxi fare, or a subway ticket qualify as business expenses. Laundry and dry cleaning services are also eligible business activities. In addition, indirect expenses like office supplies can be eligible business expenses.

Organization before, during, and after the business trip will help you avoid potential pitfalls or headaches when filing expenses or taxes. From the outset, one great way to  separate your business trips and expenses from personal expenses  is to have a single credit or debit card that you designate for business use only. This de facto "corporate" card will come in handy and be a best friend on the road since it automatically creates a tally of itemized expenses courtesy of the real-time accounting and monthly statements that come with it.

Beyond the lone card designated for business expenses, your meticulous record-keeping will greatly help you when it's time to account for everything. If you don't want to use a third-party software program or expense-tracking app to track your expenses, a simple solution is to use a basic spreadsheet that tracks the date, the reason for the expense, and the cost. To set this up, once you have incurred an expense, note it down using the aforementioned basic information.

While on the trip, another simple organizational tool is keeping all receipts and other applicable hard-copy records and materials in one designated place. A pouch or envelope will work fine as the place to keep these items. Make sure you read the receipt or record, and if it does not have information such as the name and address of the business, write it on the back before you stash it away. Finally, if a receipt is for something like a business lunch, ensure the date and information about the place of business are on the receipt. Then, write the name of the person you shared your time with and the reason for meeting up somewhere on the receipt.

Claiming travel expense deductions requires proper documentation. This includes retaining receipts and records for all expenses incurred during your business trip. For meals and entertainment expenses, you'll need to note the nature of the meeting, including who you met with, when, and the topics discussed.

It's worth noting that lodging expenses on non-business days may still be eligible for deductions if specific strategies are employed, such as incorporating “vacation days" between workdays. In such cases, the total cost of lodging for the trip can still be tax deductible even when no work is taking place on the weekend. However, meals and entertainment expenses without a clear business justification won't be deductible and must be paid personally.

Allocating expenses between business and personal activities is essential to ensure accurate deduction claims. Expenses must be allocated based on actual usage, so the non-business portion of the expenses may be viewed as taxable income if paid by the individual or company.

To accurately allocate expenses between business and personal activities for tax deductions, follow these steps:

• Track usage for a period of time.
• Determine the allocation by proportionally dividing the expenses based on the amount of business and personal use.
• Maintain proper records to support the allocation.

When combining business and personal travel, careful allocation of expenses and adherence to specific rules is important. Expenses related to the personal nature of the trip cannot be deducted; only those incurred for business purposes can be.

If traveling abroad, you must spend a minimum of 25% of your time conducting business to qualify as a business trip and claim travel expense deductions. If you conduct business for less than 25% of the time while on a trip, you can still deduct travel costs. This deduction must be proportional to the amount of time spent on business.

Rules for international travel

International travel has additional rules to consider when claiming travel expense deductions. As mentioned, you must spend at least 25% of your time abroad conducting business to claim travel-expense deductions.

If you use 25% or less of your trip for business purposes, you can deduct related travel costs in proportion to the time spent on work. This can help to make international business trips more affordable. For example, if 40% of your time is spent on business activities, you can claim the entire cost of airfare as a business expense.

Self-employed individuals should be aware of special considerations when deducting travel expenses, such as  home office deductions  and computer rental fees. Understanding these unique aspects can help self-employed individuals maximize their tax savings and ensure compliance with tax laws, especially regarding their tax home.

Home office considerations

Home office deductions can be claimed if the office is the primary place of business and is regularly used for business purposes. The IRS has specific guidelines for the regular use of a home office for business purposes, such as the office being used exclusively and regularly for business purposes.

To claim a home office deduction, you can use the simplified method the IRS provides. Here's how it works:

• Multiply the allowable square footage of your home office by the prescribed rate of $5 per square foot.
• The maximum allowable square footage is 300 square feet, so the maximum deduction you can claim using this method is $1,500 annually.
• The simplified option allows for a standard deduction without the need for detailed record-keeping.

Deducting computer rental fees

Computer rental fees can be deducted if the equipment is used for business during the trip. The full cost of the computer rental may be deducted as a business expense.

To claim a deduction for computer rental fees from business travel expenses, you must provide relevant documentation demonstrating the rental fees paid, such as receipts or invoices. Proper record-keeping is essential to support your deduction and ensure compliance with IRS regulations.

Leveraging technology

Technology, such as expense tracking apps and online bookkeeping services, can simplify record-keeping and documentation for travel expense deductions. These tools can help you track and categorize expenses, making it easier to identify and compute deductible expenses for tax purposes.

Expense tracking applications can:

• Generate reports and summaries of travel expenses
• Be beneficial for tax filing and auditing purposes
• Save time and effort in tracking and documenting your travel expenses
• Ensure accurate deductions and compliance with tax laws

Leveraging technology in expense tracking can be a valuable tool for managing your finances.

Sometimes, you might need more help. This guide provides basic questions about business travel deductions and expenses. Still, you are not alone if you have other questions about what might qualify as a tax-deductible business expense. There are experts at LegalZoom who can answer specific questions and better advise you about both business expenses and business travel-related expenses.

You might have questions about whether specific costs related to your business qualify as ordinary and necessary expenses or wonder if percentages of a certain expense or the entire cost can be completely deductible. Additionally, professionals in the know about things like a specific tax home can help you sort out concerns related to your business so that you can always claim the proper travel expenses. For any consultant looking to get back into the swing of travel, help and practical tips are just a click away.

Understanding and maximizing travel expense deductions can save you significant money on your tax return. By familiarizing yourself with the requirements, maintaining proper documentation, and leveraging the expertise of tax professionals and technology, you can ensure accurate deductions, compliance with tax laws, and, ultimately, keep more money in your pocket.

What kind of travel expenses are tax deductible?

Tax deductible travel expenses include airfare, train/bus fares, taxi rides between an airport or station and a hotel, or from the hotel to a work location.

What are the three requirements for a traveling expense deduction?

To qualify for a traveling expense deduction, you must have a “business trip," leave your tax home, have most of the trip business-related, and plan the trip in advance.

How do I prove travel expenses for taxes?

To prove business travel expenses for taxes, use credit card slips with notes on the business purpose made at the time of incurring the expense.

Are daily travel expenses tax deductible?

Daily travel expenses from your home to a regular place of business are not tax deductible. However, you can deduct transport expenses when traveling between your home and a temporary work location outside the metropolitan area where you live and normally work. Additionally, ordinary and necessary travel expenses incurred while away from your home and your main place of business can be deducted.

How do I allocate expenses between business and personal activities during a combined trip?

Allocate expenses proportionally based on the amount of business and personal use for a period of time, and maintain proper records to support deductions. 

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• File Your Own Taxes

Can You Deduct Commuting Expenses on Your Tax Return?

Generally no, but there may be exceptions

• What Is Commuting?

Commuting Expenses Are Not Deductible

• Business Expenses That Aren't Deductible

Commuting Without a Regular Office Location

• Commuting Expenses That May Be Deductible

Frequently Asked Question (FAQs)

Markus Bernhard / Getty Images

A common question among business owners, employees, and independent contractors who drive for work is whether they can deduct commuting expenses on their tax returns. If you're questioning this, too, then know this: Generally, commuting expenses are not tax-deductible expenses. However, there may an exception to that rule, depending on the situation.

Key Takeaways

• Generally, commuting expenses can not be deducted on your tax return.
• If you have your own business, you may be able to expense and write off trips between client meetings.
• If you work for a job that requires you to travel away from your home for an extended period of time, you may be able to deduct the travel expenses.
• If you're not sure whether some sort of travel for work is tax-deductible or now, ask a tax professional for guidance.

What Is Commuting? 

Commuting is considered getting to and from your place of work. Commuting is a daily thing, different from business travel, which may be overnight .

You may drive to work, as many people do. The cost of driving from your home to your main work location or regular place of work is a commuting expense. Commuting also may be done by bus, trolley, subway, taxi, bike, electric scooter, or another mode of transportation. Ride-sharing services like Uber may also be commuting expenses if you take them to and from work. The costs of taking public transportation , riding a bicycle to work, or parking at your business location are also considered commuting expenses.

Just to clarify, commuting expenses are not deductible. The time you spend traveling back and forth between your home and office is considered commuting, and the expenses associated with commuting (standard mileage or actual expenses) are not deductible. These come out of your own personal budget and can't be written off your taxes.

You cannot deduct commuting expenses no matter how far your home is from your place of work. Consider it like this: Everyone needs to get to work, employees and business owners alike.

If you travel for work and your employer doesn't reimburse you for your expenses, you can't get a deduction for those expenses on your tax return either. The miscellaneous deduction that included unreimbursed employee expenses is no longer available.

Most Business Expenses While Commuting Aren't Tax-Deductible

Even if you use your car for business purposes while you are commuting, you cannot deduct the car expenses for your business.

Here are three examples:

• If you use your personal car to transport business materials, supplies, or equipment back and forth from home to the office, the IRS says this doesn't make the car expenses deductible.
• If you use commuting time to talk on your cell phone about business matters, these commuting costs are still not deductible. Of course, the charge for the cell phone minutes and any additional charges may be deductible, if you are using your phone for business or if your business provides the phone. 
• If you have to pay to park your car at your business location, this expense is most likely not deductible, but check with your tax professional about special circumstances.

The IRS has a helpful chart on page 12 of the instructions for Publication 463 that explains when travel costs are deductible and when they're not.

Some business people work remotely (think: sitting in Starbucks), with no fixed office location (home or at an office building). In this case, your "office" is the location of your first business contact inside your metropolitan area. Travel to this location is considered commuting, and contact between your last business contact and your home is also considered commuting—which is not tax-deductible. But, travel in between, as you go from one client location to another, is deductible as a business expense.

Here's an example, assuming your home isn't your principal place of business: You drive from home to meet your first client. That trip is commuting and it isn't deductible. Then you visit four more clients during the day, each at a different location, ending up at client number five. All of these trips between clients are business-related and can be deducted on your taxes. Then you head home. This last trip, the "heading home" part, is not deductible.

Exceptions: These Commuting Expenses May Be Deductible

There are always exceptions. In this case, the courts have allowed commuting expenses to be deductions in these circumstances:

Home Office as Principal Place of Business

Expenses for travel between your home and other work locations are deductible if your residence is your principal place of business .

First, you must establish that your home is your principal place of business. This is pretty easy if your home is your only place of business, but if you have other places where you work, you must show that:

• You use it exclusively and regularly for administrative or management activities of your trade or business
• You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.

Whether or not you claim a home office deduction does not have any relationship to the designation of your home as your principal place of business.

Then, if you can establish that your home is your principal place of business, you can deduct travel expenses if you work at other locations. For example, a contractor could deduct travel expenses from his home office to a house where he is doing repairs in order to sell the property for a profit.

Traveling Between Workplaces

If you are traveling between two job sites or work locations, these trips are considered work-related travel, not commuting. For example, if you travel between your day job and a night job, you can claim these expenses as travel, not commuting.

However, you can't go from your day job to home and then to your second job and try to get a deduction for that. Since you went home in between jobs, the travel is not tax-deductible anymore.

Temporary Distant Worksite

Expenses for travel from your home and a temporary work site outside the metropolitan area where you live and normally work. The reason for this exception is that it is not reasonable for a business owner to move permanently to a worksite for a job that is only temporary.

How do you calculate your driving commute expenses?

To calculate your driving commute expenses for your own knowledge, you'll need to know how far the drive is and how much it costs in terms of wear and tear on your car, plus the cost of gas and anything else, like tolls. For driving expenses that are tax-deductible, you will look to the standard mileage deduction to calculate what you can deduct on your taxes.

How can you cut expenses to save money on your commute?

If you commute to work, consider carpooling or signing up for a monthly travel pass to save some money on expenses. You can also ask your employer if you can work from home a few days a week or month to cut the cost. Check if your employer offers commuting benefits, too, which allows you to pay for some commuting costs with pre-tax money from your paycheck.

IRS. “ Publication 463 Travel, Gift, and Car Expenses ."

IRS. " Instructions for Schedule C ."

IRS. " Standard Mileage Rates ."

NYC Consumer and Worker Protection. " Commuter Benefits Law FAQs ."

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What Are Travel Expenses?

Understanding travel expenses, the bottom line.

• Deductions & Credits
• Tax Deductions

Travel Expenses Definition and Tax Deductible Categories

Michelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.

For tax purposes, travel expenses are costs associated with traveling to conduct business-related activities. Reasonable travel expenses can generally be deducted from taxable income by a company when its employees incur costs while traveling away from home specifically for business. That business can include conferences or meetings.

Key Takeaways

• Travel expenses are tax-deductible only if they were incurred to conduct business-related activities.
• Only ordinary and necessary travel expenses are deductible; expenses that are deemed unreasonable, lavish, or extravagant are not deductible.
• The IRS considers employees to be traveling if their business obligations require them to be away from their "tax home” substantially longer than an ordinary day's work.
• Examples of deductible travel expenses include airfare, lodging, transportation services, meals and tips, and the use of communications devices.

Travel expenses incurred while on an indefinite work assignment that lasts more than one year are not deductible for tax purposes.

The Internal Revenue Service (IRS) considers employees to be traveling if their business obligations require them to be away from their "tax home" (the area where their main place of business is located) for substantially longer than an ordinary workday, and they need to get sleep or rest to meet the demands of their work while away.

Well-organized records—such as receipts, canceled checks, and other documents that support a deduction—can help you get reimbursed by your employer and can help your employer prepare tax returns. Examples of travel expenses can include:

• Airfare and lodging for the express purpose of conducting business away from home
• Transportation services such as taxis, buses, or trains to the airport or to and around the travel destination
• The cost of meals and tips, dry cleaning service for clothes, and the cost of business calls during business travel
• The cost of computer rental and other communications devices while on the business trip

Travel expenses do not include regular commuting costs.

Individual wage earners can no longer deduct unreimbursed business expenses. That deduction was one of many eliminated by the Tax Cuts and Jobs Act of 2017.

While many travel expenses can be deducted by businesses, those that are deemed unreasonable, lavish, or extravagant, or expenditures for personal purposes, may be excluded.

Types of Travel Expenses

Types of travel expenses can include:

• Personal vehicle expenses
• Taxi or rideshare expenses
• Airfare, train fare, or ferry fees
• Laundry and dry cleaning
• Business meals
• Business calls
• Shipment costs for work-related materials
• Some equipment rentals, such as computers or trailers

The use of a personal vehicle in conjunction with a business trip, including actual mileage, tolls, and parking fees, can be included as a travel expense. The cost of using rental vehicles can also be counted as a travel expense, though only for the business-use portion of the trip. For instance, if in the course of a business trip, you visited a family member or acquaintance, the cost of driving from the hotel to visit them would not qualify for travel expense deductions .

The IRS allows other types of ordinary and necessary expenses to be treated as related to business travel for deduction purposes. Such expenses can include transport to and from a business meal, the hiring of a public stenographer, payment for computer rental fees related to the trip, and the shipment of luggage and display materials used for business presentations.

Travel expenses can also include operating and maintaining a house trailer as part of the business trip.

Can I Deduct My Business Travel Expenses?

Business travel expenses can no longer be deducted by individuals.

If you are self-employed or operate your own business, you can deduct those "ordinary and necessary" business expenses from your return.

If you work for a company and are reimbursed for the costs of your business travel , your employer will deduct those costs at tax time.

Do I Need Receipts for Travel Expenses?

Yes. Whether you're an employee claiming reimbursement from an employer or a business owner claiming a tax deduction, you need to prepare to prove your expenditures. Keep a running log of your expenses and file away the receipts as backup.

What Are Reasonable Travel Expenses?

Reasonable travel expenses, from the viewpoint of an employer or the IRS, would include transportation to and from the business destination, accommodation costs, and meal costs. Certainly, business supplies and equipment necessary to do the job away from home are reasonable. Taxis or Ubers taken during the business trip are reasonable.

Unreasonable is a judgment call. The boss or the IRS might well frown upon a bill for a hotel suite instead of a room, or a sports car rental instead of a sedan.

Individual taxpayers need no longer fret over recordkeeping for unreimbursed travel expenses. They're no longer tax deductible by individuals, at least until 2025 when the provisions in the latest tax reform package are due to expire or be extended.

If you are self-employed or own your own business, you should keep records of your business travel expenses so that you can deduct them properly.

Internal Revenue Service. " Topic No. 511, Business Travel Expenses ."

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 13.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Page 7.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Pages 6-7, 13-14.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 4.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Pages 5, 7.

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What are work-related travel expenses & what can you claim.

If you didn’t already know, you might be eligible to claim certain expenses for doing your job. It’s all going to depend on the type of work that you do and where you do it. But do you sometimes have to travel for work? Work-related travel might even be a big part of your role. 

If you do, the good news is that there are certain work-related travel expenses that you can claim and deduct from your personal tax return. That said, not every expense you incur is able to get deducted. So what exactly are work-related travel expenses and what can you claim?

Here’s What We’ll Cover:

What Are Work-Related Travel Expenses?

Claiming Work-Related Travel Expenses

What If You Receive a Travel Allowance?

What records should you keep.

What Isn’t Allowed as a Work-Related Travel Expense?

Key Takeaways

What Are Work-Related Travel Expenses? 

If you need to travel for work, any purchases that you make which are related to your travel can get claimed as a travel expense. But, it’s important to know and recognize the difference between work-related expenses and personal expenses. For example, using your personal vehicle to commute to and from work isn’t a travel expense. 

However, using your personal vehicle for other work-related purposes are deductible. Here is a list of some of the most common work-related travel expenses that you can claim.

• Costs of staying in a motel, hotel or similar type of accommodation
• Any meal expenses, such as food and drink 
• Any expenses that are incidental to your travel, as long as it’s overnight

Transport Expenses

Transport expenses are usually some of the most popular and common tax deductions. Usually, work-related travel, either with your own car or on public transport, is a claimable expense. 

Allowable Claims

• Any travel between two different workplaces or jobs
• Any travel from your workplace to an offsite meeting or offsite event 
• Any travel from your home to another workplace if it’s required by your employer
• If you work at multiple locations for the same employer, the cost of travelling between locations is a claimable expense 

Non-Allowable Claims

• Commuting from home to work each day, and back again
• Running errands on the way to or from work, such as stopping at the supermarket 
• If you work out of hours or work overtime 
• If your home is the primary place of work for one job, but you travel to another location for work with someone else 

Basically, transport expenses include costs such as driving your car, ute, motorcycle or van. They can also relate to costs associated with ride-share or ride-sourcing, such as Uber, GoCatch or Hi Oscar. You can also expense costs if you need to catch a train, taxi, bus, boat or another type of vehicle. 

Transport costs are also going to include the actual costs that you incur on your trip. For example, if you incur fuel expenses along the way or parking fees. 

You will be able to claim an expense for parking fees as long as the trip you took was business-related. For example, if you need to attend a conference, event or offsite meeting for business purposes, you can claim the parking fees if you have any. 

It’s worth noting that you can’t claim everyday parking when you drive to and from work each day and park near your workplace. As well, you can’t claim parking fees as an expense if you have already been reimbursed by your employer. 

Claiming Work-Related Travel Expenses 

The way in which you claim your work-related travel expenses is going to depend on a few different things. You’re able to claim deductions as work-related car expenses if you meet the following criteria:

• The expenses incurred relate to a car that you own, lease or hired through a hire-purchase agreement
• You determine your total deduction based on either the cents per kilometre method or the logbook method

You’re able to claim your deduction for work-related transport expenses as long as the expenses relate to:

• Car-hire fees
• Any costs incurred when using someone else’s vehicle for work purposes, such as fuel expenses
• Air, train, tram, bus taxi, ferry and ride-share fares
• Road tolls, bridge tolls and car parking expenses, as long as they are work-related

Any work-related travel expenses will get claimed as work-related travel expenses when you do your tax return. 

In most cases, this is kind of an alternative to work-related travel expenses. Instead of claiming an expense after you have incurred the cost, your employer would provide you with a travel allowance. If this happens, it’s usually considered to be taxable income and it should get listed on your income statement. 

As long as you spent your travel allowance, you can claim a tax deduction. But, it’s important to know that you aren’t able to claim the entire amount as a tax deduction. 

For example, if you get $1,500 as a travel allowance but only use $500, you can only claim $500 worth of travel deductions. 

One of the most important things to remember with work-related travel expenses is to keep documentation. Make sure you keep any and all expense records and receipts, even if you receive a travel allowance. This helps make sure you can prove your claims when tax time rolls around. 

If you’re not sure if you’re able to submit a claim for an expense at the time, keep the receipt just in case. You can either keep the physical copy or take a photograph of it along with other purchase records. This way you won’t have to try and remember back to when the expense happened. Everything will be well-organized so you can submit your claims as easily as possible. 

What Isn’t Allowed as a Work-Related Travel Expense? 

It might seem as though you can claim any costs you incur if you’re travelling, but that’s not the case. Here are some examples of what’s not allowed to get claimed.

• If you have to travel to a work conference in another city but decide to spend an extra night, you can’t claim the costs associated with the extra night
• You can’t claim travel or accommodation costs for your partner or children if they’re travelling with you 
• If you decide to add an extra flight that isn’t related to a work trip, you can’t claim that additional cost 

Key Takeaways 

Business travel expenses are common if you travel regularly for work. It could be actual expenses for a rental vehicle or the actual cost of international travel. The biggest thing to keep in mind is that the costs must be work-related. 

Many businesses have travel policies in place for employees. It will outline everything from per diem rates, a standard mileage rate and types of transportation that are claimable. There might be some additional restrictions based on the type of business you do or where you’re travelling to. 

Work-related travel expenses can include things like public transportation costs and vehicle rentals. There are also some other incidental expenses that you can deduct. Just make sure that things like entertainment expenses or the cost of meals are not for personal purposes.

Knowing and understanding deductible travel expenses can help you increase the amount you’re able to claim on your tax return. Check with your employer to see if they already have a standard meal allowance or have set mileage reimbursement rates. Also, make sure that you keep the original receipts for your expenses, even if they were made with a personal credit card. 

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Claiming Business Clothing Expenses: A Complete Guide

Learn how to navigate business clothing expenses, understand IRS guidelines, and maximize your tax deductions with our comprehensive guide.

For many professionals, the line between personal and business expenses can often blur, especially when it comes to clothing. Understanding how to claim business clothing expenses is crucial for maximizing tax deductions while staying compliant with IRS regulations.

This guide aims to demystify the process, offering clear criteria and practical strategies to ensure you make the most of your eligible deductions without running afoul of tax laws.

Tax Deductibility and IRS Guidelines

Navigating the intricacies of tax deductibility for business clothing requires a solid understanding of IRS guidelines. The IRS stipulates that for clothing to be deductible, it must be both ordinary and necessary for your profession. This means the attire should be typical for your line of work and essential for you to perform your duties effectively. For instance, uniforms for healthcare professionals or safety gear for construction workers often qualify under these criteria.

The IRS also emphasizes that the clothing must not be suitable for everyday wear. This is a crucial point; even if you wear a suit exclusively for business meetings, it is generally not deductible because it can be worn outside of work. Specialized attire, such as branded uniforms or protective gear, is more likely to meet the IRS’s stringent requirements. The distinction between what is considered ordinary and necessary versus what is adaptable for personal use is a fine line that taxpayers must tread carefully.

In addition to these guidelines, the IRS requires that any claimed clothing expenses be substantiated with proper documentation. This includes keeping receipts, maintaining records of the business purpose for the clothing, and ensuring that the expenses are clearly separated from personal expenditures. Failure to provide adequate documentation can result in the disallowance of the deduction, leading to potential penalties and interest.

Criteria for Business Clothing Expenses

Determining whether your clothing expenses qualify as business deductions hinges on several nuanced factors. The primary consideration is whether the clothing is specifically required for your job and not suitable for everyday wear. For example, a lawyer’s suit, while necessary for court appearances, is generally not deductible because it can be worn in non-professional settings. Conversely, a branded uniform with a company logo or specialized safety gear, such as a firefighter’s protective suit, is more likely to meet the criteria.

Another important aspect is the exclusivity of the clothing’s use. The IRS scrutinizes whether the attire is worn exclusively for work-related activities. If you purchase a set of scrubs for your job as a nurse, and you only wear them in the hospital, these expenses are more likely to be deductible. The exclusivity criterion helps ensure that the clothing is genuinely a business expense and not a personal one.

The nature of your profession also plays a significant role. Certain industries have more stringent requirements for work attire, making it easier to justify these expenses as business-related. For instance, performing artists often need costumes that are unique to their roles and cannot be worn outside of performances. Similarly, individuals in the hospitality industry may need specific uniforms that are not suitable for personal use, thereby qualifying for deductions.

Documentation and Record-Keeping

Maintaining meticulous records is fundamental when claiming business clothing expenses. The IRS requires that all deductions be substantiated with clear and accurate documentation, making it imperative to keep detailed records of every purchase. Start by saving all receipts related to your business clothing expenses. These receipts should include the date of purchase, the amount spent, and a description of the items bought. Digital tools like Expensify or QuickBooks can simplify this process by allowing you to scan and store receipts electronically, ensuring they are easily accessible when needed.

Beyond receipts, it’s also beneficial to maintain a log that details the business purpose of each clothing item. This log should specify how and when the clothing is used in your professional activities. For instance, if you purchase a set of branded uniforms, note the events or workdays when these uniforms are worn. This additional layer of documentation can be invaluable if the IRS questions the legitimacy of your deductions.

Photographic evidence can further bolster your claims. Taking pictures of yourself wearing the clothing in a work setting can provide visual proof that the attire is used exclusively for business purposes. This can be particularly useful for specialized or branded clothing that might otherwise be mistaken for personal wear. Additionally, keeping a record of any employer requirements or industry standards that mandate specific attire can help substantiate your claims. For example, a memo from your employer stating that uniforms are required can serve as supporting evidence.

Strategies for Maximizing Deductions

Maximizing deductions for business clothing expenses requires a strategic approach that goes beyond simply understanding IRS guidelines. One effective strategy is to invest in clothing that clearly qualifies as a business expense. For instance, opting for branded uniforms or industry-specific attire can make it easier to justify these purchases as necessary for your job. This not only ensures compliance but also enhances your professional image, which can have ancillary benefits for your career.

Another tactic is to bundle your clothing purchases with other deductible business expenses. For example, if you attend a professional conference, consider purchasing attire specifically for the event. By doing so, you can potentially categorize the entire trip—including travel, lodging, and clothing—as a business expense. This holistic approach can amplify your deductions while streamlining your record-keeping efforts.

Networking with peers in your industry can also provide valuable insights into maximizing deductions. Colleagues may have discovered effective ways to document and justify their clothing expenses, offering you practical tips that you might not have considered. Additionally, consulting with a tax professional who specializes in your field can provide tailored advice, ensuring you take full advantage of all available deductions.

Tax Implications and Guidelines for Business Gifts to Individuals

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