Travel expenses are the ordinary and necessary expenses that you pay while temporarily traveling away from home on business.

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.

Generally, your tax home is the entire city or general area where your main place of business is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals, or lodging in Milwaukee because that is your tax home. Your travel on weekends to your family home in Chicago is not for business reasons, so these expenses are also not deductible. If you regularly work in two or more areas, your tax home is the general area where your main place of business or work is located.

You may not deduct expenses that are lavish or extravagant or that are for personal or vacation purposes.

Some deductible travel expenses include:

Air, rail, and bus fares;

Out-of-pocket operating and maintaining your car;

Taxi fares or other costs of transportation between the airport or train station and your hotel, from one customer to another, or from one place of business to another;

Meals and lodging; and

Tips that are incidental to any of these expenses.

Meal expenses are deductible only if your trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties.

The deduction for business meals is limited to 50% of the cost.

Instead of keeping records of your meal expenses and deducting the actual cost, you can generally deduct a standard meal allowance ranging from $26 to $38 depending on where and when you travel.

You may also 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 incurred them in looking for work in a new trade or business or in 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 work.

Travel expenses for conventions and seminars are not deductible, unless you can show that your attendance benefits your trade or business.

If you are an employee, your allowable travel expenses are figured on Form 2106, Employee Business Expenses, or 2106-EZ, Unreimbursed Employee Business Expenses. Unreimbursed expenses are carried from Form 2106 or 2106-EZ to Schedule A, Form 1040, subject to a limit based on 2% of adjusted gross income. Information on the 2% limit is included in Topic 508. 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 F, Form 1040.

Good records are essential. Select Topic 305 for information on recordkeeping.

For more information on travel expenses refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses.

Tax Topics & FAQs | Tax Help Archives | Home