IRS Travel Rules for Business Expense Deductions

The Internal Revenue Service (IRS) provides specific guidelines for deducting expenses related to business travel. These rules clarify when a trip qualifies for tax deductions, which costs are permissible to write off, and the documentation required to support these claims.

Defining Business Travel for Tax Purposes

A tax home is your regular place of business or post of duty, regardless of where you maintain your family residence. It is the entire city or general area where your main place of business is located. If you do not have a regular or main place of business, your tax home may be the place where you regularly live.

For travel expenses to be deductible, your work must require you to be away from your tax home for a period substantially longer than an ordinary day’s work, requiring you to sleep or rest. This “overnight rule” is a primary determinant. Short trips that do not require an overnight stay are not considered travel for these deduction purposes, though some transportation costs may be deductible separately.

The duration of your work assignment also affects whether your travel is deductible. A temporary work assignment is one that is expected to last for one year or less, and travel expenses are deductible. An assignment is considered indefinite if it is expected to last for more than one year, making that location your new tax home and rendering travel expenses there non-deductible.

Allowable Travel Expense Deductions

Once a trip qualifies as business travel, a range of expenses become deductible. These costs must be ordinary, meaning common and accepted in your trade, and necessary, meaning helpful and appropriate for your work. Lavish or extravagant expenses are not deductible, as the amounts must be reasonable based on the circumstances.

Transportation costs are a primary category of deductible travel expenses, including travel by airplane, train, bus, or car. If you use your personal vehicle, you can deduct either your actual expenses, such as gasoline and repairs, or use the standard mileage rate. For 2025, the standard mileage rate is 70 cents per mile, and you can also deduct parking fees and tolls.

Lodging and meal expenses incurred while away from home on business are also deductible. The cost of your hotel or other accommodations is fully deductible. For meals, you can deduct either the actual cost or use the standard meal allowance, also known as the per diem rate, but deductions are restricted to 50% of the unreimbursed cost.

Beyond transportation, lodging, and meals, other expenses can be deducted. These include the costs of dry cleaning and laundry while on your business trip. Business-related communications and tips paid for services related to lodging or transportation are also deductible.

Required Recordkeeping and Substantiation

To claim deductions for business travel, the IRS requires that you substantiate your expenses with adequate records. You should maintain contemporaneous records, meaning you record the details of your expenses at the time you incur them to ensure accuracy.

For each business expense, you must record the following information:

• The amount of the expense
• The date it was incurred
• The place where the expense occurred
• The business purpose of the expense

Documentary evidence is also required to support your claims. You should keep receipts, canceled checks, or bills for any lodging expense, regardless of the amount. For other expenses, you are required to have a receipt for any cost of $75 or more.

Without proper substantiation, your deductions may be disallowed. Using accounting software or dedicated expense-tracking apps can simplify this process and help ensure you have the necessary proof for all your claimed expenses.

Rules for Combined Business and Personal Travel

When a business trip is combined with personal travel, the IRS has specific rules for allocating expenses. If your trip within the United States is primarily for business, you can deduct the full cost of your transportation. A trip is considered primarily for business if you spend more days on business activities than on personal activities.

Once at the destination, you must allocate your expenses between your business and personal days. You can only deduct the costs of lodging, meals, and other expenses for the days you spend conducting business. For example, if you travel for a five-day conference but stay for an additional two days for a personal vacation, you can only deduct expenses for the five business days.

The rules for international travel are more stringent. For travel outside the U.S. that is longer than a week, you must allocate your transportation costs between business and personal time unless you spent 25% or less of your time on personal activities. If your personal activities exceed this threshold, you must prorate your transportation deduction.

How to Claim Travel Expense Deductions

The method for claiming business travel expense deductions on your tax return depends on your employment status. Self-employed individuals and businesses report travel expenses on their primary business tax forms, which reduces their net profit.

The specific forms used include:

• Self-employed individuals: Schedule C (Form 1040)
• Farmers: Schedule F (Form 1040)
• Partnerships and multi-member LLCs: Form 1065
• Corporations: Form 1120

For most employees, the deduction for unreimbursed employee expenses is suspended through 2025. However, certain employees are exempt and may still be able to deduct their unreimbursed travel expenses. These include Armed Forces reservists, qualified performing artists, and fee-basis state or local government officials, who use Form 2106 to calculate their deduction.