Are you self-employed or a business owner and travel for work often? We know that being away from home on business has its ups and downs. We’re here to make filing your taxes one of the ups, by providing you with the business travel expenses you can and can’t deduct when filing taxes this year.
Expenses You CAN Deduct:
- Meals – Generally, you can deduct 50% of the unreimbursed cost of meals, including tax and tip. It’s a good idea to keep your receipts and document what business you discussed during the meal.
- Entertainment – You can deduct entertainment expenses if they are ordinary and necessary, and just like meals, you can generally only deduct 50% of your unreimbursed expenses.
- Transportation – This includes travel by plane, train or bus. Fares for taxis, Uber and car rentals when traveling to and from the airport, hotels and meetings are included too.
- Business Use of Your Car – If you use your own car when traveling for work, then expenses like tolls, mileage and parking fees are deductible.
- Lodging – If your trip is overnight, you can deduct your unreimbursed hotel and lodging costs.
- Baggage & Shipping – If you ship baggage or materials for the event, you can deduct these expenses too.
- Dry Cleaning & Laundry – If you need to use laundry services while traveling, they are deductible.
Expenses You CANNOT Deduct:
- Personal Vacations – Writing off a personal trip as a business expense is never worth the risk. If you extend the time of your business trip for a vacation, your vacation costs are not included.
- Meals If You Didn’t Stay Overnight – Meals are not a travel expense, if you did not stay overnight.
- Extravagant meals – This one’s tough to regulate, but it’s important to be sensible and appropriate when it comes to fancy dinners.
- Daily Commute – Yes, you’re traveling to and from work, but your commute each day is not deductible.
The IRS has many rules when it comes to deducting business expenses. View them here. Learn more about business travel and taxes from Liberty Tax CEO, John Hewitt, on Inc.com: