Understanding Business Travel Expenses and Tax Deductions

Now that business travel has picked up, it is crucial to understand what qualifies as deductible business travel expenses. These expenses can lead to significant tax savings, but it's important to have a clear understanding of what qualifies and to keep careful records.

Qualifying Business Travel Expenses:

• Transportation costs, including airfare, train tickets, and bus fares, are tax-deductible.
• Costs for local transportation like taxis, ride-shares, and shuttles between the airport or station and your hotel or business meeting locations are deductible.
• If you use your personal vehicle, you can choose to deduct the mileage using the IRS standard mileage rate or the actual expenses related to the business use of your vehicle. 
• Accommodation expenses, such as hotels or lodging, are deductible if your business trip involves an overnight stay.
• You can deduct 50% of your meal expenses during your travel. It is important to document the amount, time, place, and purpose of each meal.
• Business-related incidental expenses like tips and various fees are deductible.
• Business communication costs, such as phone calls, fax machine use, and overseas business calls are deductible. 
• Less common but still deductible expenses include costs for shipping business materials or equipment to your destination, laundry and dry cleaning during your trip, and parking fees or tolls incurred during business travel. 

Non-Deductible Business Travel Expenses:

• Entertainment expenses for personal enjoyment during the trip, extravagant meals or lodging expenses, and additional costs incurred by having a non-employee spouse travel with you are typically not deductible.
• Home-related expenses such as pet sitting or house sitting are not deductible when traveling for business. 

Understanding what qualifies as deductible business travel expenses and keeping meticulous records can lead to significant tax savings. Reach out to us if you have any questions.