Travel Expenses

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 travel expenses that are incurred while traveling away from home specifically for business purposes, such as for a conference or meeting. 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 the their main place of business is located) for a period longer than a typical work day.

BREAKING DOWN 'Travel Expenses'

Well-organized records, including receiptscanceled 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, however this does include transport services, such as taxis, buses, or trains, to the airport or to and around the travel destination. It can also include the cost of meals and tips, dry cleaning service for clothes, and the cost of business calls, which may include 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.