Business Travel Expenses Tax Deductions
Travel expenses are the ordinary and necessary expenses of traveling away from home
for your business, profession, or job. Generally, employees deduct these expenses
using Form 2106 (PDF) or Form 2106-EZ
(PDF) and on Schedule A, Form 1040 (PDF). You
cannot deduct expenses that are lavish or extravagant or that are for personal purposes.
You are traveling away from home if your duties require you to be away from the
general area of your tax home for a period substantially longer than an ordinary
day's work, and you need to get sleep or rest to meet the demands of your work while
Generally, your tax home is the entire city or general area where your main place
of business or work is located, regardless of where you maintain your family home.
For example, you live with your family in Sacramento but work in San Francisco where you
stay in a hotel and eat in restaurants. You return to Sacramento every weekend. You
may not deduct any of your travel, meals, or lodging in San Francisco because that is
your tax home. Your travel on weekends to your family home in Sacramento
is not for
your work, so these expenses are also not deductible. If you regularly work in more
than one place, your tax home is the general area where your main place of business
or work is located.
In determining which is your main place of business, take into account the length
of time you are normally required to spend at each location for business purposes,
the degree of business activity in each area, and the relative significance of the
financial return from each area. However, the most important consideration is the
length of time spent at each location.
Travel expenses paid or incurred in connection with a temporary work assignment
away from home are deductible. However, travel expenses paid in connection with
an indefinite work assignment are not deductible. Any work assignment in excess
of one year is considered indefinite. Also, you may not deduct travel expenses at
a work location if it is realistically expected that you will work there for more
than one year, whether or not you actually work there that long. If you realistically
expect to work at a temporary location for less than one year, and the expectation
changes so that at some point you realistically expect to work there for more than
one year, travel expenses become nondeductible when your expectation changes.
You may deduct travel expenses, including meals and lodging, you had in looking
for a new job in your present trade or business. You may not deduct these expenses
if you had them while looking for work in a new trade or business or while looking
for work for the first time. If you are unemployed and there is a substantial break
between the time of your past work and your looking for new work, you may not deduct
these expenses, even if the new work is in the same trade or business as your previous
Travel expenses for conventions are deductible if you can show that your attendance
benefits your trade or business. Special rules apply to conventions held outside
the North American area.
Deductible travel expenses while away from home include, but are not limited to,
the costs of:
Instead of keeping records of your meal expenses and deducting the actual cost,
you can generally use a standard meal allowance ranging from $31 to $51 for certain
high cost areas, depending on where you travel.
- Travel by airplane, train, bus, or car between your home and your business destination,
- Using your car while at your business destination,
- Fares for taxis or other types of transportation between the airport or train station
and your hotel, the hotel and the work location, and from one customer to another,
or from one place of business to another,
- Meals and lodging, and
- Tips you pay for services related to any of these expenses.
The deduction for business meals is generally limited to 50% of the unreimbursed
If you are an employee, your allowable travel expenses are figured on Form 2106
or 2106–EZ. Your allowable unreimbursed expenses are carried from Form 2106 or 2106–EZ
to Schedule A, Form l040, and are subject to a limit based on 2% of adjusted gross
income. If you do not itemize your deductions, you cannot deduct these expenses.
If you are self–employed, travel expenses are deductible on Schedule C, C–EZ, or,
if you are a farmer, Schedule F,
Form 1040 (PDF).
For more information on travel expenses, refer to
Publication 463, Travel, Entertainment, Gift and Car Expenses.
If you are a member of the National Guard or military reserve you may be able to
claim a deduction from income rather than an itemized deduction on Schedule A, Form
1040, for unreimbursed travel expense. To qualify the travel must be overnight,
more than 100 miles from your home, and for drill or meeting. Expenses must be ordinary
and necessary. This deduction is limited to the regular federal per diem rate (for
lodging, meals, and incidental expenses) and the standard mileage rate (for car
expenses) plus any parking fees, ferry fees, and tolls. These expenses are claimed
on Form 2106/2106EZ and carried to line 24 of Form 1040. Expenses in excess of the
limit can be claimed only as an itemized deduction on Schedule A.