Deductibility of Travel Expenses

Business travel expenses can be deducted when a taxpayer has to travel away from their tax home for business purposes. A taxpayer is considered to be traveling if they are away for more than on ordinary workday and need to sleep to meet the demands of their work.

A tax home is generally a taxpayer’s regular place of business where work duties are performed

If the individual has more than one regular place of business, their tax home is their main place of business or work. An individual’s main place of business or work is determined by:

• The total time the employee ordinarily spends in each place,
• The level of business activity in each place, and
• How much money the employee earns at each place.

What Expenses are Deductible?

Examples of deductible business travel expenses include:

1. Travel by airplane, train, bus or car between the individual’s home and business destination,
2. Fares for taxis or other types of transportation between an airport or train station and a hotel, or from a hotel or to a work location,
3. Shipping baggage and sample or display material between regular and temporary work locations,
4. Using a personal car for business travel,
5. Lodging and meals while away,
6. Dry cleaning and laundry while away, and
7. Tips paid for services related to any of these expenses.
8. Other similar ordinary and necessary expenses related to the business travel.

How to Deduct Travel

Taxpayers should keep well organized records and receipts.

Records should state the following:

• Amount of time for travel
• Time of travel
• Place of travel
• Purpose of travel