If you incur expenses related to your business, you may be able to deduct those expenses on your tax return. Deductible expenses can include business-related expenses for travel, entertainment, gifts, and transportation. This publication is focused on travel-related deductions.
To have deductible travel expenses, we must first define what constitutes travel.
Travel from Home
You are traveling from home if:
- Your job responsibilities require that you be away from your tax home for long than an ordinary day of work, and
- You must rest or sleep while away from your tax home.
Your tax home for travel purposes is defined as your regular place of business. It includes the surrounding or area or city of your place of business. If you have multiple places of business, your tax home is your main place of business. If you do not have a place of business, your tax home is the place where you live regularly.
If you do not have a place where you live regularly, you do not have a tax home. Therefore, you cannot deduct travel expenses.
Travel for Temporary Job Assignments
If you have a location where you regularly work, yet at times you also work in another location temporarily where it is not practical to return home, your tax home does not change and you are considered to be traveling the entire time you are away from home. Temporary work at a location is typically work lasting for one year or less.
If you work at another location for an indefinite period, your tax home changes to that other location and you cannot deduct travel expenses.
Deductible Travel Expenses
Typically, a travel expense is deductible if it is ordinary and necessary. An ordinary expense is an expense that is common for your line of business. A necessary expense is an expense that is helpful in your line of business. Necessary expenses do not have to be required expenses.
You can deduct the following ordinary and necessary travel expenses:
- Transportation, including expenses related to traveling by airplane, car, bus, ship, or train between your home and your business destination.
- Taxi, limousine, and public transportation expenses between an airport or station and your hotel and between your hotel and business location.
- Shipping costs associated with baggage and other business materials.
- Car-related expenses when using your own vehicle, including mileage, tolls, and parking. When renting a car, the portion of the rental used for business purposes.
- Lodging and meals.
- Dry cleaning and laundry.
- Telephone calls.
- Any other ordinary and necessary expense related to your line of business.
If a spouse, dependent, or other individual travels with you on a business trip, you cannot deduct their travel expenses on your tax return. If the person traveling with you is an employee or business associate, you can deduct their travel expenses if they are your employee, they have a legitimate business reason for the travel, and they would be allowed to deduct the travel expense.
Who can provide me additional information about deduction of business expenses?
If you have further questions about deduction of business expenses on your tax return, a tax attorney is a great resource who can provide help. A tax attorney has the background necessary to review all of your business-related expenses and help make sure you maximize your deduction on your tax return.
By calling the phone number located at the top of this web site or completing the form below, you can speak with a tax attorney who can answer your questions and prepare your tax return. The initial consultation is free of charge, so get the help you need today.
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Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.