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Deduct Business Travel: Allowable Tax Deductions

By Tanya Roth, Esq. | Last updated on

For business travelers, deducting travel expenses can be a great way to lower your income tax amount. Although there are some great allowable tax deductions available for business travel, the traveling businessperson needs to be aware that there are certain rules under federal income tax law defining the scope of these allowable deductions. 

Deductible travel expenses are those which are ordinary and necessary expenses for traveling away from home for trade or business.

Essentially, if we're painting with large brush-strokes, you can deduct travel expenses when they are made pursuant to a work-related necessity and they are away from your usual place of business.

Know what you can deduct.

  • Travel between home and business destination. If you use air-miles and your ticket is free, you can't deduct it. Luxury ships have tax rules of their own.  
  • Travel between the airport/station and hotel, as well as travel between hotel and business destination.
  • Baggage and shipping.
  • The business use portion of a car you use, including mileage and maintenance. 
  • Lodging, if your trip is long enough to require or rest. 
  • Meals, up to 50% of the full cost of all meals. This deduction is available if you have entitled to the allowable tax deductions for lodging, or if the mean is business-related entertainment. At all times, the meal may not be extravagant. 
  • Business calls, faxes and communications.
  • Tips for any expenses otherwise deductible under the business travel tax deduction rules.
  • Any other ordinary and necessary expense related to the business travel.

Keep records. Try to have a journal where you log your expenses. Separate your expenses (i.e., food, lodging, transportation) and keep track of each one meticulously.  

The trip must be primarily for business reasons. If it is primarily for personal reasons, you can't deduct the cost of the travel to-and-from. You can, however, still deduct the business related expenses you incur. If the travel is primarily for business but also for personal reasons, you can deduct the portion of your travel expense (your plane ticket, for example) that is allocable to the business purpose.    

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