What are 'Travel Expenses'

Travel expenses are costs associated with traveling for the purpose of conducting business-related activities. Travel expenses can generally be deducted by employees as non-reimbursed costs incurred while traveling away from home specifically for business purposes. Those business purposes can include conferences or meetings.

While many travel expenses can be deducted, those that are lavish or extravagant in nature, or those that are for personal purposes, are excluded. The Internal Revenue Service (IRS) considers employees to be traveling away from home if their business obligations require them to be away from their "tax home" (the general area where their main place of business is located) for a period longer than a typical work day.

BREAKING DOWN 'Travel Expenses'

Well-organized records such as receipts, canceled checks and other documents that support a deduction can help individuals prepare tax returns and answer questions from the IRS. Examples of travel expenses can include airfare and lodging for the express purpose of conducting business away from home. This does not include regular commuting fees. Travel expenses do include transport services such as taxis, buses, or trains to the airport or to and around the travel destination. This can also include the cost of meals and tips, dry cleaning service for clothes, and the cost of business calls. Allowed expenses can include the use of a fax machine and other communications devices while on the business trip.

Many Facets to Travel Expenses

The use of one’s personal vehicle in conjunction with the trip, including actual mileage, tolls, and parking fees, can be included as a travel expense. The cost of using rental vehicles can also be counted as a travel expense though only for the business-use portion of the trip. For instance, if a business trip took a person nearby a family member or acquaintance, the cost of driving from the hotel to visit them would not qualify for travel expense deductions.

Travel expenses incurred while on an indefinite work assignment, which lasts more than one year according to the IRS, are not deductible for tax purposes. The IRS allows other similar and necessary expenses to be accounted for as related to business travel for deduction purposes. Such expenses can include transport to and from a business meal, the hiring of a public stenographer, payment for computer rental fees related to the trip, and the shipment of luggage and display materials used for business presentations. Travel expenses can also include operating and maintaining a house trailer as part of the business trip.

RELATED TERMS
  1. Transportation Expenses

    Transportation expenses are costs incurred by an employee or ...
  2. Smart Traveler Enrollment Program

    The Smart Traveler Enrollment Program is a service that allows ...
  3. Tax Home

    A tax home is the city where a worker's primary place of business ...
  4. Mileage Allowance

    A mileage allowance is the rate at which the IRS suggets tax ...
  5. Staycation

    A staycation is a vacation spent at or near your own home, rather ...
  6. Convention Expenses

    Convention Expernses are any travel expenses incurred while at ...
Related Articles
  1. Tech

    How to Use Technology to Save Big on Travel

    How to leverage the online community and technology to create a one of a kind travel experience that's economical.
  2. Personal Finance

    7 Ways To Save On Last-Minute Travel

    Whether for an emergency or just a cheaper vacation, these tips can save you a ton of cash for last-minute travel.
  3. Taxes

    10 Tax Benefits for the Self-Employed

    Running your own business has both personal and financial perks.
  4. Tech

    Blockchain Technology May Replace Travel ID

    The mess of passports and identity cards may soon be a distant memory, thanks to blockchain technology.
  5. Personal Finance

    The 6 Best Alternatives to Hotels

    Discover information about some of the many-available and much-less expensive alternatives to staying in hotels when you are traveling.
  6. Investing

    Google Destinations Could Undercut Travel Sites (GOOGL)

    Google Destinations now displays travel information directly on your mobile device, aggregating its own search results and putting them ahead of those from other sites.
  7. Taxes

    How To Deduct Your Job Search Expenses

    With approximately 12 million Americans out of a job right now, many people are spending significant dollars to be noticed by potential employers. Fortunately, some of these job-search costs ...
  8. Investing

    Google Trips vs. Priceline & Expedia (EXPE)

    A look at Google Trips and whether or not it will impact Priceline or Expedia.
  9. Insurance

    Is My Health Insurance Good Abroad?

    Which emergencies will your health insurance cover (or not cover) if you get sick in a foreign country? Here's how to protect yourself.
  10. Personal Finance

    The Best Way to Give the Gift of Travel

    A trip is a wonderful gift – as long as you handle it the smart way. What's the smart way? Read these expert tips.
RELATED FAQS
  1. How do travel rewards cards work?

    Travel reward credit cards use a points-based system to help consumers earn bonuses and other incentives, such as airline ... Read Answer >>
  2. Difference Between an Operating Expense and Capital Expense

    Learn more about the differences between an operating expense (OPEX) and a capital expense (CAPEX), and see how they are ... Read Answer >>
  3. If I pay for a course to learn about trading can I write some of it off?

    There are some investing costs that can be written off each year, even if you aren't a day trader. The general rule in determining ... Read Answer >>
Trading Center