What Determines Business Travel?
According to the IRS, deductible travel expenses are the “ordinary and necessary expenses of traveling away from home for your business, profession, or job.” In other words, if your job takes you away from where you typically work, e.g. for a conference, and requires you to stay in a hotel or Airbnb or other temporary lodging, then that would qualify as business travel, and many expenses associated with that trip would be considered “business travel expenses.”
The IRS says that you are permitted to deduct many travel expenses incurred while on temporary work assignments that take you away from your “tax home” (The IRS defines your tax home as “the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home.”).
Warning: you are NOT allowed to deduct travel expenses that you accrue while working on an indefinite work assignment, which the IRS considers to be any work that takes you away from home for longer than one year. Other restrictions apply, of course, so make sure you chat with your trusted accountant or financial advisor about what is considered permitted business travel.
What Can You Deduct For Business Travel?
So what are some examples of business travel expenses? Here are some common business expenses that you can deduct on your taxes:
- Tickets for travel by air, train, bus or car between your home and your business destination (as long as you’re not using points or benefits from a frequent flyer program)
- Fares for taxis or other types of transportation to and from your hotel, airport and business locations
- Shipping of baggage and work materials
- Use of your personal car while on your business trip
- Hotels, Airbnb’s, and other lodging
- 50% of your meals
- Tips for services
- Laundry/Dry cleaning
- Other similar “ordinary and necessary” expenses related to your business travel
How To Keep Track Of Business Taxes & Travel Expenses
In order to deduct the above costs, you will need to make sure you save every receipt for every expense you incur while on your business trip. You should have proper documentation that includes the date, exact amount and reason for the expense. When tax time rolls around, if you are a sole proprietor or single member LLC, you will need to document these expenses in the "Expenses" section on your Schedule C.
How Can Hurdlr Help
Hurdlr is your simple solution to tracking and managing all of your business’s expenses— and determining which tax deductions you’re eligible for. Not a fan of saving all those paper receipts? The Hurdlr app can save them digitally for you. Download the app today and make your business travel smooth and stress free.