Business travel is an unavoidable part of doing business, and the Internal Revenue Service (IRS) has rules on what constitutes a business-related travel expense that can be deducted from taxes. Business travel includes transportation expenses to and from a destination, lodging costs while at the destination, meals while on the trip, and other related expenses like entertainment and fees for parking.
Deductible Travel Expenses
Travel expenses are deductible if they are reasonable and necessary for conducting business. Examples of deductible travel expenses include airfare, hotel accommodations, meals (including tips), taxi fare or rental car fees, parking fees, tolls, conference registration fees, Internet access charges (not including your home service), telephone calls made related to the trip’s business purpose, laundry service charges for clothes worn on your trip, transportation costs between locations at your destination such as taxis or shuttles between the airport and hotel.
Non-Deductible Travel Expenses
The IRS considers some expenses to not be deductible even if they are incurred during a business trip. These include any personal expenses such as recreational activities or sightseeing not related to conducting business; personal items such as toiletries; entertainment costs unrelated to conducting business; personal items purchased during the trip; travel insurance premiums; excess baggage fees; vacation time taken while on a business trip; and any costs incurred while traveling outside of the United States.
Business travelers should keep documentation of all expenses incurred during their trip for tax purposes. This includes receipts for airfare, hotel stays or rental cars as well as any other costs associated with the trip. The IRS also requires that you document why each expense was necessary for conducting business – this should include written notes about why you traveled to each specific location as well as who you met with there – in order for it to qualify for deduction when filing your taxes.
What Does The IRS Consider Business Travel? The IRS considers traveling expenses that are reasonable and necessary for conducting business to be deductible when filing taxes.
This includes airfare, lodging costs while at the destination, meals while on the trip, transportation costs between locations at your destination such as taxis or shuttles between the airport and hotel as well as other related expenses like entertainment and fees for parking. However there are some non-deductible travel expenses including personal items purchased during the trip or vacation time taken while on a business trip which should all be documented in order to qualify when filing taxes.