Your Guide to Deducting Business Travel Expenses


Traveling for business can be a great way to get out of the office and to meet colleagues at your company’s other locations. Business travel can also raise some new tax questions, particularly if you haven’t traveled for business before. Here are some things to keep in mind for each business trip:

What Qualifies as Business Travel Expense?

In essence, your business travel write-offs are restricted to expenses that are required in order for you to make the trip. Your flight, car rental, hotel and meal expenses fall under this category. However, be careful to deduct these expenses at the correct percentage.

  • You can deduct the full amount of your airfare (even first-class airfare)
  • Lodging (hotels, etc) can be deducted at 50 percent of the total cost
  • Meal expenses: 50 percent

One thing to keep in mind is that your business expenses can’t be considered “extravagant” by IRS standards. If you grab a quick lunch at the airport after reaching your destination, you can go ahead safely deduct 50 percent of the cost. However, if you decide to hit a fine dining establishment at any point of your trip and order expensive food and drink, the IRS may not allow the deduction under their guidelines.

Business and Pleasure

If you want to bring your loved ones along for the trip, be careful. For example, you want to  take everyone sightseeing after a week of business activities. Only the expenses associated with your week of business-related activities are deductible. One way to eliminate confusion is to compartmentalize your activities.

If you have business meetings and meals one day of the week, it might be a good idea to keep side trips and leisure activities out of the mix if you can. Reserve any remaining days for sightseeing or recreation. If that isn’t possible, keep track of your receipts and expenses, and separate your business-related receipts from your leisure activity receipts.

Deducting your business travel expenses doesn’t have to be a hassle. If your business trip also includes side trips with loved ones, you can only deduct the expenses from the business-related portion of your trip. Keep track of your expenses and receipts while traveling, and you’ll return home ready to head back to work with one less thing to worry about.

As with any new development in your tax scenario, it’s best to check in with a qualified tax pro who can address your specific concerns.