How to Write Off Business Travel Expenses

Business travel expenses can significantly reduce a taxpayer’s taxable income. The Internal Revenue Service (IRS) permits taxpayers to deduct ordinary and necessary expenses incurred while traveling away from their tax home for business purposes. Understanding the rules for these deductions requires attention to qualifying criteria, eligible expense types, and strict recordkeeping.

Qualifying as a Business Travel Expense

For travel expenses to be deductible, the travel must meet specific IRS criteria. A primary requirement is that the taxpayer must be “away from their tax home overnight” for business purposes. This means the business trip must be long enough to require sleep or rest to meet the demands of the work.

A taxpayer’s tax home is generally defined as the entire city or general area of their main place of business, employment, or post of duty. If a taxpayer does not have a regular or main place of business, their tax home may be the place where they regularly live. If neither applies, the taxpayer may be considered an “itinerant,” and their tax home is wherever they work, which generally precludes travel expense deductions.

Expenses must also be “ordinary and necessary” for the business. An ordinary expense is one that is common and accepted in the particular industry or business. A necessary expense is one that is helpful and appropriate for the trade or business, though it does not need to be indispensable. Expenses are not deductible if they are considered lavish, extravagant, or for purely personal purposes.

The assignment must be temporary rather than indefinite. A work assignment is generally considered temporary if it is realistically expected to last, and does last, for one year or less. If an assignment is expected to last more than one year, or does in fact last more than one year, it is considered indefinite, and travel expenses to that location are not deductible.

Types of Deductible Travel Expenses

A variety of specific expenses incurred during business travel can be deducted. Transportation costs are deductible, including airfare, train tickets, bus fares, and the cost of using a car for business. If using a personal vehicle, taxpayers can deduct either the actual expenses (such as gas, oil, and maintenance) or use the standard mileage rate. For 2025, the standard business mileage rate is 70 cents per mile. Tolls and parking fees incurred for business purposes are also deductible.

Lodging expenses, such as hotels or temporary rentals, are deductible if they are necessary for the business trip and not lavish or extravagant. Meals incurred while away from home on business are 50% deductible. This 50% limitation applies to most business meals, including those with clients or customers, and covers the cost of food, beverages, taxes, and tips.

Other deductible expenses include:
Baggage fees for sending luggage or display materials
Tips paid for services related to the travel
Dry cleaning and laundry costs
Business calls and communication expenses, such as internet access fees or phone calls made for business purposes
Fees for attending business conventions or conferences (special rules apply to conventions outside North America)

Recordkeeping Requirements

Accurate and detailed records are required for business travel expense deductions. Internal Revenue Code Section 274 requires taxpayers to substantiate the amount of each expense, the time and place of travel, and the business purpose of the expense. For meals, the business relationship to the person receiving the benefit must also be documented.

Taxpayers should keep all receipts for travel expenses; digital copies are generally acceptable. Categorizing expenses by type, such as transportation, lodging, and meals, helps organize financial information and is crucial for reporting. A detailed log should be maintained, including dates of travel, destinations, and the specific business purpose of each activity.

Using a business credit card can streamline record-keeping by separating personal and business expenses. Record expenses as soon as possible to ensure accuracy and avoid missing deductions. Adequate documentation, such as mileage logs, expense reports, or digital applications, is essential to support all claimed deductions.

Claiming Travel Expense Deductions

The process for claiming business travel deductions depends on the taxpayer’s employment status. Self-employed individuals, such as independent contractors or small business owners, typically report their travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship).

For employees, recent tax law changes have significantly impacted the ability to deduct unreimbursed business expenses. The Tax Cuts and Jobs Act of 2017 suspended the deduction for most unreimbursed employee business expenses from 2018 through 2025. This means that most W-2 employees cannot deduct unreimbursed travel costs during this period.

However, specific groups of employees, such as armed forces reservists, qualified performing artists, and fee-basis government officials, may still be able to deduct certain unreimbursed employee expenses. If eligible, these employees would typically use Form 2106, Employee Business Expenses, to calculate and report their deductions.