travel and business expenses

Everything You Need to Know About the Business Travel Tax Deduction

Justin is an IRS Enrolled Agent, allowing him to represent taxpayers before the IRS. He loves helping freelancers and small business owners save on taxes. He is also an attorney and works part-time with the Keeper Tax team.

You don’t have to fly first class and stay at a fancy hotel to claim travel expense tax deductions. Conferences, worksite visits, and even a change of scenery can (sometimes) qualify as business travel.

What counts as business travel?

The IRS does have a few simple guidelines for determining what counts as business travel. Your trip has to be:

Mostly business
An “ordinary and necessary” expense
Someplace far away from your “tax home”

What counts as "mostly business"?

The IRS will measure your time away in days. If you spend more days doing business activities than not, your trip is considered "mostly business". Your travel days are counted as work days.

Special rules for traveling abroad

If you are traveling abroad for business purposes, you trip counts as " entirely for business " as long as you spend less than 25% of your time on personal activities (like vacationing). Your travel days count as work days.

So say you you head off to Zurich for nine days. You've got a seven-day run of conference talks, client meetings, and the travel it takes to get you there. You then tack on two days skiing on the nearby slopes.

Good news: Your trip still counts as "entirely for business." That's because two out of nine days is less than 25%.

What is an “ordinary and necessary” expense?

“Ordinary and necessary” means that the trip:

Makes sense given your industry, and
Was taken for the purpose of carrying out business activities

If you have a choice between two conferences — one in your hometown, and one in London — the British one wouldn’t be an ordinary and necessary expense.

What is your tax home?

A taxpayer can deduct travel expenses anytime you are traveling away from home but depending on where you work the IRS definition of “home” can get complicated.

Your tax home is often — but not always — where you live with your family (what the IRS calls your "family home"). When it comes to defining it, there are two factors to consider:

What's your main place of business, and
How large is your tax home

What's your main place of business?

If your main place of business is somewhere other than your family home, your tax home will be the former — where you work, not where your family lives.

For example, say you:

Live with your family in Chicago, but
Work in Milwaukee during the week (where you stay in hotels and eat in restaurants)

Then your tax home is Milwaukee. That's your main place of business, even if you travel back to your family home every weekend.

How large is your tax home?

In most cases, your tax home is the entire city or general area where your main place of business is located.

The “entire city” is easy to define but “general area” gets a bit tricker. For example, if you live in a rural area, then your general area may span several counties during a regular work week.

Rules for business travel

Want to check if your trip is tax-deductible? Make sure it follows these rules set by the IRS.

1. Your trip should take you away from your home base

A good rule of thumb is 100 miles. That’s about a two hour drive, or any kind of plane ride. To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn’t your home.

2. You should be working regular hours

In general, that means eight hours a day of work-related activity.

It’s fine to take personal time in the evenings, and you can still take weekends off. But you can’t take a half-hour call from Disneyland and call it a business trip.

Here's an example. Let’s say you’re a real estate agent living in Chicago. You travel to an industry conference in Las Vegas. You go to the conference during the day, go out in the evenings, and then stay the weekend. That’s a business trip!

3. The trip should last less than a year

Once you’ve been somewhere for over a year, you’re essentially living there. However, traveling for six months at a time is fine!

For example, say you’re a freelancer on Upwork, living in Seattle. You go down to stay with your sister in San Diego for the winter to expand your client network, and you work regular hours while you’re there. That counts as business travel.

What about digital nomads?

With the rise of remote-first workplaces, many freelancers choose to take their work with them as they travel the globe. There are a couple of requirements these expats have to meet if they want to write off travel costs.

Requirement #1: A tax home

Digital nomads have to be able to claim a particular foreign city as a tax home if they want to write off any travel expenses. You don't have to be there all the time — but it should be your professional home base when you're abroad.

For example, say you've rent a room or a studio apartment in Prague for the year. You regularly call clients and finish projects from there. You still travel a lot, for both work and play. But Prague is your tax home, so you can write off travel expenses.

Requirement #2: Some work-related reason for traveling

As long as you've got a tax home and some work-related reason for traveling, these excursion count as business trips. Plausible reasons include meeting with local clients, or attending a local conference and then extending your stay.

However, if you’re a freelance software developer working from Thailand because you like the weather, that unfortunately doesn't count as business travel.

The travel expenses you can write off

As a rule of thumb, all travel-related expenses on a business trip are tax-deductible. You can also claim meals while traveling, but be careful with entertainment expenses (like going out for drinks!).

Here are some common travel-related write-offs you can take.

🛫 All transportation

Any transportation costs are a travel tax deduction. This includes traveling by airplane, train, bus, or car. Baggage fees are deductible, and so are Uber rides to and from the airport.

Just remember: if a client is comping your airfare, or if you booked your ticket with frequent flier miles, then it isn't deductible since your cost was $0.

If you rent a car to go on a business trip, that rental is tax-deductible. If you drive your own vehicle, you can either take actual costs or use the standard mileage deduction. There's more info on that in our guide to deducting car expenses .

Hotels, motels, Airbnb stays, sublets on Craigslist, even reimbursing a friend for crashing on their couch: all of these are tax-deductible lodging expenses.

🥡 Meals while traveling

If your trip has you staying overnight — or even crashing somewhere for a few hours before you can head back — you can write off food expenses. Grabbing a burger alone or a coffee at your airport terminal counts! Even groceries and takeout are tax-deductible.

One important thing to keep in mind: You can usually deduct 50% of your meal costs. For 2021 and 2022, meals you get at restaurants are 100% tax-deductible. Go to the grocery store, though, and you’re limited to the usual 50%.

{upsell_block}

🌐 Wi-Fi and communications

Wi-Fi — on a plane or at your hotel — is completely deductible when you’re traveling for work. This also goes for other communication expenses, like hotspots and international calls.

If you need to ship things as part of your trip — think conference booth materials or extra clothes — those expenses are also tax-deductible.

👔 Dry cleaning

Need to look your best on the trip? You can write off related expenses, like laundry charges.

{write_off_block}

Travel expenses you can't deduct

Some travel costs may seem like no-brainers, but they're not actually tax-deductible. Here are a couple of common ones to watch our for.

The cost of bringing your child or spouse

If you bring your child or spouse on a business trip, your travel expense deductions get a little trickier. In general, the cost of bring other people on a business trip is considered personal expense — which means it's not deductible.

You can only deduct travel expenses if your child or spouse:

Is an employee,
Has a bona fide business purpose for traveling with you, and
Would otherwise be allowed to deduct the travel expense on their own

Some hotel bill charges

Staying in a hotel may be required for travel purposes. That's why the room charge and taxes are deductible.

Some additional charges, though, won't qualify. Here are some examples of fees that aren't tax-deductible:

Gym or fitness center fees
Movie rental fees
Game rental fees

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Where to claim travel expenses when filing your taxes

If you are self-employed, you will claim all your income tax deduction on the Schedule C. This is part of the Form 1040 that self-employed people complete ever year.

What happens if your business deductions are disallowed?

If the IRS challenges your business deduction and they are disallowed, there are potential penalties. This can happen if:

The deduction was not legitimate and shouldn't have been claimed in the first place, or
The deduction was legitimate, but you don't have the documentation to support it

When does the penalty come into play?

The 20% penalty is not automatic. It only applies if it allowed you to pay substantially less taxes than you normally would. In most cases, the IRS considers “substantially less” to mean you paid at least 10% less.

In practice, you would only reach this 10% threshold if the IRS disqualified a significant number of your travel deductions.

How much is the penalty?

The penalty is normally 20% of the difference between what you should have paid and what you actually paid. You also have to make up the original difference.

In total, this means you will be paying 120% of your original tax obligation: your original obligation, plus 20% penalty.

Justin W. Jones, EA, JD

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Tax Deductions for Business Travelers

When you are self-employed, you generally can deduct the ordinary and necessary expenses of traveling away from home for business from your income. But before you start listing travel deductions, make sure you understand what the Internal Revenue Service (IRS) means by "home," "business," and "ordinary and necessary expenses."

Ordinary vs. necessary expenses

Business home, not home sweet home, transportation expenses on a business trip are deductible, fees for getting around are deductible, lodging, meals and tips are deductible.

Key Takeaways

Typically, you can deduct travel expenses if they are ordinary (common and accepted in your industry) and necessary (helpful and appropriate for your business).
You can deduct business travel expenses when you are away from both your home and the location of your main place of business (tax home).
Deductible expenses include transportation, baggage fees, car rentals, taxis and shuttles, lodging, tips, and fees.
You can also deduct 50% of either the actual cost of meals or the standard meal allowance, which is based on the federal meals and incidental expense per diem rate.

The IRS defines expense ordinary and necessary expenses this way:

An expense is ordinary if it is common and accepted in your industry
An expense is necessary if it is helpful and appropriate for your business

You can claim business travel expenses when you're away from home but "home" doesn't always mean where your family lives. You also have a tax home—the city where your main place of business is located—which may not be the same as the location of your family home.

For example, if you live in Petaluma, California but your permanent work location is in San Jose where you stay in hotels and eat out during the work week, you typically can't deduct your expenses in San Jose or your transportation home on weekends.

In this situation San Jose is your tax home , so no deductions are permitted for ordinary and necessary expenses there.
Your trips to your home in Petaluma are not mandated by business.

Go by plane, train or bus—the actual cost of the ticket to ride is deductible, as well as any baggage fees. If you have to pay top dollar for a last-minute flight, the high-priced ticket is a business expense, but if you use frequent-flyer miles for a free ticket, the deduction is zero.

If you decide to rent a car to go on a business trip, the car rental is deductible. If you drive your own vehicle, you can usually take actual costs or the IRS standard mileage rate. For 2023 the rate is 65.5 cents per mile. You also can add tolls and parking costs onto your deduction. This amount increases to 67 cents per mile for 2024.

TurboTax Tip: Even if you use the federal meals and incidental expense per diem rates to calculate your deductions, be sure to keep receipts from all your meals and incidental expenses.

Fares for taxis or shuttles can be deducted as business travel expenses. For example, you can deduct the fare or other costs to go to:

Airport or train station
Hotel from the airport or train station
Between your hotel and the work location
Between clients in the area

If you rent a car when you arrive at your destination, the expense is deductible as long as the car is used exclusively for business. If you use it both for business and personal purposes, you can only deduct the portion of the rental used for business.

The IRS allows business travelers to deduct business-related meals and hotel costs, as long as they are reasonable considering the circumstances—not lavish or extravagant.

You would have to eat if you were home, so this might explain why the IRS limits meal deductions to 50% of either the:

Actual cost of the meal
Standard meal allowance

This allowance is based on the federal meals and incidental expense per diem rate that depends on where and when you travel.

Generally, you can deduct 50% of the cost of meals. Alternatively, if you do not incur any meal expenses nor claim the standard meal allowance, you can deduct the amount of $5 per day for incidental expenses. You can also deduct incidental expenses, such as:

Fees and tips given to hotel staff
Fees for porters and baggage carriers

But don't forget to keep track of the actual costs.

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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

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What Are Travel Expenses?

Understanding travel expenses, the bottom line.

Deductions & Credits
Tax Deductions

Travel Expenses Definition and Tax Deductible Categories

Michelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.

For tax purposes, travel expenses are costs associated with traveling to conduct business-related activities. Reasonable travel expenses can generally be deducted from taxable income by a company when its employees incur costs while traveling away from home specifically for business. That business can include conferences or meetings.

Key Takeaways

Travel expenses are tax-deductible only if they were incurred to conduct business-related activities.
Only ordinary and necessary travel expenses are deductible; expenses that are deemed unreasonable, lavish, or extravagant are not deductible.
The IRS considers employees to be traveling if their business obligations require them to be away from their "tax home” substantially longer than an ordinary day's work.
Examples of deductible travel expenses include airfare, lodging, transportation services, meals and tips, and the use of communications devices.

Travel expenses incurred while on an indefinite work assignment that lasts more than one year are not deductible for tax purposes.

The Internal Revenue Service (IRS) considers employees to be traveling if their business obligations require them to be away from their "tax home" (the area where their main place of business is located) for substantially longer than an ordinary workday, and they need to get sleep or rest to meet the demands of their work while away.

Well-organized records—such as receipts, canceled checks, and other documents that support a deduction—can help you get reimbursed by your employer and can help your employer prepare tax returns. Examples of travel expenses can include:

Airfare and lodging for the express purpose of conducting business away from home
Transportation services such as taxis, buses, or trains to the airport or to and around the travel destination
The cost of meals and tips, dry cleaning service for clothes, and the cost of business calls during business travel
The cost of computer rental and other communications devices while on the business trip

Travel expenses do not include regular commuting costs.

Individual wage earners can no longer deduct unreimbursed business expenses. That deduction was one of many eliminated by the Tax Cuts and Jobs Act of 2017.

While many travel expenses can be deducted by businesses, those that are deemed unreasonable, lavish, or extravagant, or expenditures for personal purposes, may be excluded.

Types of Travel Expenses

Types of travel expenses can include:

Personal vehicle expenses
Taxi or rideshare expenses
Airfare, train fare, or ferry fees
Laundry and dry cleaning
Business meals
Business calls
Shipment costs for work-related materials
Some equipment rentals, such as computers or trailers

The use of a personal vehicle in conjunction with a business 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 in the course of a business trip, you visited a family member or acquaintance, the cost of driving from the hotel to visit them would not qualify for travel expense deductions .

The IRS allows other types of ordinary and necessary expenses to be treated 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.

Can I Deduct My Business Travel Expenses?

Business travel expenses can no longer be deducted by individuals.

If you are self-employed or operate your own business, you can deduct those "ordinary and necessary" business expenses from your return.

If you work for a company and are reimbursed for the costs of your business travel , your employer will deduct those costs at tax time.

Do I Need Receipts for Travel Expenses?

Yes. Whether you're an employee claiming reimbursement from an employer or a business owner claiming a tax deduction, you need to prepare to prove your expenditures. Keep a running log of your expenses and file away the receipts as backup.

What Are Reasonable Travel Expenses?

Reasonable travel expenses, from the viewpoint of an employer or the IRS, would include transportation to and from the business destination, accommodation costs, and meal costs. Certainly, business supplies and equipment necessary to do the job away from home are reasonable. Taxis or Ubers taken during the business trip are reasonable.

Unreasonable is a judgment call. The boss or the IRS might well frown upon a bill for a hotel suite instead of a room, or a sports car rental instead of a sedan.

Individual taxpayers need no longer fret over recordkeeping for unreimbursed travel expenses. They're no longer tax deductible by individuals, at least until 2025 when the provisions in the latest tax reform package are due to expire or be extended.

If you are self-employed or own your own business, you should keep records of your business travel expenses so that you can deduct them properly.

Internal Revenue Service. " Topic No. 511, Business Travel Expenses ."

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 13.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Page 7.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Pages 6-7, 13-14.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 4.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Pages 5, 7.

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How to Deduct Travel Expenses (with Examples)

Reviewed by

November 3, 2022

This article is Tax Professional approved

Good news: most of the regular costs of business travel are tax deductible.

Even better news: as long as the trip is primarily for business, you can tack on a few vacation days and still deduct the trip from your taxes (in good conscience).

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Even though we advise against exploiting this deduction, we do want you to understand how to leverage the process to save on your taxes, and get some R&R while you’re at it.

Follow the steps in this guide to exactly what qualifies as a travel expense, and how to not cross the line.

The travel needs to qualify as a “business trip”

Unfortunately, you can’t just jump on the next plane to the Bahamas and write the trip off as one giant business expense. To write off travel expenses, the IRS requires that the primary purpose of the trip needs to be for business purposes.

Here’s how to make sure your travel qualifies as a business trip.

1. You need to leave your tax home

Your tax home is the locale where your business is based. Traveling for work isn’t technically a “business trip” until you leave your tax home for longer than a normal work day, with the intention of doing business in another location.

2. Your trip must consist “mostly” of business

The IRS measures your time away in days. For a getaway to qualify as a business trip, you need to spend the majority of your trip doing business.

For example, say you go away for a week (seven days). You spend five days meeting with clients, and a couple of days lounging on the beach. That qualifies as business trip.

But if you spend three days meeting with clients, and four days on the beach? That’s a vacation. Luckily, the days that you travel to and from your location are counted as work days.

3. The trip needs to be an “ordinary and necessary” expense

“Ordinary and necessary ” is a term used by the IRS to designate expenses that are “ordinary” for a business, given the industry it’s in, and “necessary” for the sake of carrying out business activities.

If there are two virtually identical conferences taking place—one in Honolulu, the other in your hometown—you can’t write off an all-expense-paid trip to Hawaii.

Likewise, if you need to rent a car to get around, you’ll have trouble writing off the cost of a Range Rover if a Toyota Camry will get you there just as fast.

What qualifies as “ordinary and necessary” can seem like a gray area at times, and you may be tempted to fudge it. Our advice: err on the side of caution. if the IRS chooses to investigate and discovers you’ve claimed an expense that wasn’t necessary for conducting business, you could face serious penalties .

4. You need to plan the trip in advance

You can’t show up at Universal Studios , hand out business cards to everyone you meet in line for the roller coaster, call it “networking,” and deduct the cost of the trip from your taxes. A business trip needs to be planned in advance.

Before your trip, plan where you’ll be each day, when, and outline who you’ll spend it with. Document your plans in writing before you leave. If possible, email a copy to someone so it gets a timestamp. This helps prove that there was professional intent behind your trip.

The rules are different when you travel outside the United States

Business travel rules are slightly relaxed when you travel abroad.

If you travel outside the USA for more than a week (seven consecutive days, not counting the day you depart the United States):

You must spend at least 75% of your time outside of the country conducting business for the entire getaway to qualify as a business trip.

If you travel outside the USA for more than a week, but spend less than 75% of your time doing business, you can still deduct travel costs proportional to how much time you do spend working during the trip.

For example, say you go on an eight-day international trip. If you spend at least six days conducting business, you can deduct the entire cost of the trip as a business expense—because 6 is equivalent to 75% of your time away, which, remember, is the minimum you must spend on business in order for the entire trip to qualify as a deductible business expense.

But if you only spend four days out of the eight-day trip conducting business—or just 50% of your time away—you would only be able to deduct 50% of the cost of your travel expenses, because the trip no longer qualifies as entirely for business.

List of travel expenses

Here are some examples of business travel deductions you can claim:

Plane, train, and bus tickets between your home and your business destination
Baggage fees
Laundry and dry cleaning during your trip
Rental car costs
Hotel and Airbnb costs
50% of eligible business meals
50% of meals while traveling to and from your destination

On a business trip, you can deduct 100% of the cost of travel to your destination, whether that’s a plane, train, or bus ticket. If you rent a car to get there, and to get around, that cost is deductible, too.

The cost of your lodging is tax deductible. You can also potentially deduct the cost of lodging on the days when you’re not conducting business, but it depends on how you schedule your trip. The trick is to wedge “vacation days” in between work days.

Here’s a sample itinerary to explain how this works:

Thursday: Fly to Durham, NC. Friday: Meet with clients. Saturday: Intermediate line dancing lessons. Sunday: Advanced line dancing lessons. Monday: Meet with clients. Tuesday: Fly home.

Thursday and Tuesday are travel days (remember: travel days on business trips count as work days). And Friday and Monday, you’ll be conducting business.

It wouldn’t make sense to fly home for the weekend (your non-work days), only to fly back into Durham for your business meetings on Monday morning.

So, since you’re technically staying in Durham on Saturday and Sunday, between the days when you’ll be conducting business, the total cost of your lodging on the trip is tax deductible, even if you aren’t actually doing any work on the weekend.

It’s not your fault that your client meetings are happening in Durham—the unofficial line dancing capital of America .

Meals and entertainment during your stay

Even on a business trip, you can only deduct a portion of the meal and entertainment expenses that specifically facilitate business. So, if you’re in Louisiana closing a deal over some alligator nuggets, you can write off 50% of the bill.

Just make sure you make a note on the receipt, or in your expense-tracking app , about the nature of the meeting you conducted—who you met with, when, and what you discussed.

On the other hand, if you’re sampling the local cuisine and there’s no clear business justification for doing so, you’ll have to pay for the meal out of your own pocket.

Meals and entertainment while you travel

While you are traveling to the destination where you’re doing business, the meals you eat along the way can be deducted by 50% as business expenses.

This could be your chance to sample local delicacies and write them off on your tax return. Just make sure your tastes aren’t too extravagant. Just like any deductible business expense, the meals must remain “ordinary and necessary” for conducting business.

How Bench can help

Surprised at the kinds of expenses that are tax-deductible? Travel expenses are just one of many unexpected deductible costs that can reduce your tax bill. But with messy or incomplete financials, you can miss these tax saving expenses and end up with a bigger bill than necessary.

Enter Bench, America’s largest bookkeeping service. With a Bench subscription, your team of bookkeepers imports every transaction from your bank, credit cards, and merchant processors, accurately categorizing each and reviewing for hidden tax deductions. We provide you with complete and up-to-date bookkeeping, guaranteeing that you won’t miss a single opportunity to save.

Want to talk taxes with a professional? With a premium subscription, you get access to unlimited, on-demand consultations with our tax professionals. They can help you identify deductions, find unexpected opportunities for savings, and ensure you’re paying the smallest possible tax bill. Learn more .

Bringing friends & family on a business trip

Don’t feel like spending the vacation portion of your business trip all alone? While you can’t directly deduct the expense of bringing friends and family on business trips, some costs can be offset indirectly.

Driving to your destination

Have three or four empty seats in your car? Feel free to fill them. As long as you’re traveling for business, and renting a vehicle is a “necessary and ordinary” expense, you can still deduct your business mileage or car rental costs even when others join you for the ride.

One exception: If you incur extra mileage or “unnecessary” rental costs because you bring your family along for the ride, the expense is no longer deductible because it isn’t “necessary or ordinary.”

For example, let’s say you had to rent an extra large van to bring your children on a business trip. If you wouldn’t have needed to rent the same vehicle to travel alone, the expense of the extra large van no longer qualifies as a business deduction.

Renting a place to stay

Similar to the driving expense, you can only deduct lodging equivalent to what you would use if you were travelling alone.

However, there is some flexibility. If you pay for lodging to accommodate you and your family, you can deduct the portion of lodging costs that is equivalent to what you would pay only for yourself .

For example, let’s say a hotel room for one person costs $100, but a hotel room that can accommodate your family costs $150. You can rent the $150 option and deduct $100 of the cost as a business expense—because $100 is how much you’d be paying if you were staying there alone.

This deduction has the potential to save you a lot of money on accommodation for your family. Just make sure you hold on to receipts and records that state the prices of different rooms, in case you need to justify the expense to the IRS

Heads up. When it comes to AirBnB, the lines get blurry. It’s easy to compare the cost of a hotel room with one bed to a hotel room with two beds. But when you’re comparing significantly different lodgings, with different owners—a pool house versus a condo, for example—it becomes hard to justify deductions. Sticking to “traditional” lodging like hotels and motels may help you avoid scrutiny during an audit. And when in doubt: ask your tax advisor.

So your trip is technically a vacation? You can still claim any business-related expenses

The moment your getaway crosses the line from “business trip” to “vacation” (e.g. you spend more days toasting your buns than closing deals) you can no longer deduct business travel expenses.

Generally, a “vacation” is:

A trip where you don’t spend the majority of your days doing business
A business trip you can’t back up with correct documentation

However, you can still deduct regular business-related expenses if you happen to conduct business while you’re on vacay.

For example, say you visit Portland for fun, and one of your clients also lives in that city. You have a lunch meeting with your client while you’re in town. Because the lunch is business related, you can write off 50% of the cost of the meal, the same way you would any other business meal and entertainment expense . Just make sure you keep the receipt.

Meanwhile, the other “vacation” related expenses that made it possible to meet with this client in person—plane tickets to Portland, vehicle rental so you could drive around the city—cannot be deducted; the trip is still a vacation.

If your business travel is with your own vehicle

There are two ways to deduct business travel expenses when you’re using your own vehicle.

Actual expenses method
Standard mileage rate method

Actual expenses is where you total up the actual cost associated with using your vehicle (gas, insurance, new tires, parking fees, parking tickets while visiting a client etc.) and multiply it by the percentage of time you used it for business. If it was 50% for business during the tax year, you’d multiply your total car costs by 50%, and that’d be the amount you deduct.

Standard mileage is where you keep track of the business miles you drove during the tax year, and then you claim the standard mileage rate .

The cost of breaking the rules

Don’t bother trying to claim a business trip unless you have the paperwork to back it up. Use an app like Expensify to track business expenditure (especially when you travel for work) and master the art of small business recordkeeping .

If you claim eligible write offs and maintain proper documentation, you should have all of the records you need to justify your deductions during a tax audit.

Speaking of which, if your business is flagged to be audited, the IRS will make it a goal to notify you by mail as soon as possible after your filing. Usually, this is within two years of the date for which you’ve filed. However, the IRS reserves the right to go as far back as six years.

Tax penalties for disallowed business expense deductions

If you’re caught claiming a deduction you don’t qualify for, which helped you pay substantially less income tax than you should have, you’ll be penalized. In this case, “substantially less” means the equivalent of a difference of 10% of what you should have paid, or $5,000—whichever amount is higher.

The penalty is typically 20% of the difference between what you should have paid and what you actually paid in income tax. This is on top of making up the difference.

Ultimately, you’re paying back 120% of what you cheated off the IRS.

If you’re slightly confused at this point, don’t stress. Here’s an example to show you how this works:

Suppose you would normally pay $30,000 income tax. But because of a deduction you claimed, you only pay $29,000 income tax.

If the IRS determines that the deduction you claimed is illegitimate, you’ll have to pay the IRS $1200. That’s $1000 to make up the difference, and $200 for the penalty.

Form 8275 can help you avoid tax penalties

If you think a tax deduction may be challenged by the IRS, there’s a way you can file it while avoiding any chance of being penalized.

File Form 8275 along with your tax return. This form gives you the chance to highlight and explain the deduction in detail.

In the event you’re audited and the deduction you’ve listed on Form 8275 turns out to be illegitimate, you’ll still have to pay the difference to make up for what you should have paid in income tax—but you’ll be saved the 20% penalty.

Unfortunately, filing Form 8275 doesn’t reduce your chances of being audited.

Where to claim travel expenses

If you’re self-employed, you’ll claim travel expenses on Schedule C , which is part of Form 1040.

When it comes to taking advantage of the tax write-offs we’ve discussed in this article—or any tax write-offs, for that matter—the support of a professional bookkeeping team and a trusted CPA is essential.

Accurate financial statements will help you understand cash flow and track deductible expenses. And beyond filing your taxes, a CPA can spot deductions you may have overlooked, and represent you during a tax audit.

Learn more about how to find, hire, and work with an accountant . And when you’re ready to outsource your bookkeeping, try Bench .

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Accounting | How To

Determining Tax Deductions for Travel Expenses + List of Deductions

Published August 15, 2023

Published Aug 15, 2023

WRITTEN BY: Tim Yoder, Ph.D., CPA

This article is part of a larger series on Accounting Software .

1. Determine Your Trip Meets the Requirements of a Business Trip
2. Check the List of Business Expenses That Qualify for Deductions
3. (For Those Mixing Business & Personal Travel): Allocate Expenses

Bottom Line

The IRS considers deductible travel expenses to be any ordinary and necessary expenses you incur while traveling away from home on business. To get tax deductions for travel expenses, the trip must have a business purpose and be temporary (less than one year) and you must be away from your tax home for a length of time that exceeds your usual work day or be away overnight to get sleep to fulfill the demands of your job while away.

Key Takeaways

A qualifying business trip must take you away from home overnight long enough to require rest.
Most expenses incurred during a qualifying business trip are deductible, including meals on days off.
Partnerships, limited liability companies (LLCs), and corporations can directly pay or reimburse employees for business travel expenses and deduct them from their business returns.
Self-employed business owners will deduct their travel expenses on Schedule C, while farmers will use Schedule F.
Purely personal expenses on business trips, such as sightseeing, are nondeductible.

Step 1: Determine Your Trip Meets the Requirements of a Business Trip

A business trip for tax purposes is one that meets the following criteria:

There must be a business purposes for the travel
You are required to be away from your tax home
The trip lasts overnight or a period long enough to require rest
The trip is temporary

Business Purpose

Your trip must be an ordinary and necessary part of conducting your business for your expenses to be deductible. Below are some reasons you may decide to travel for business:

Meeting with clients or customers: If you travel overnight to meet with clients or customers for business purposes, such as negotiating contracts, discussing projects, or providing consultations.
Attending business conferences or seminars: If you travel to attend conferences, seminars, or trade shows that are relevant to your business activities, including acquiring new industry knowledge or networking with other professionals.
Training or professional developmen t : If you travel to attend training programs, workshops, or courses directly related to your business or profession.
Conducting in-person meetings or negotiations: If you need to travel to have face-to-face meetings or negotiations with business partners, suppliers, or other stakeholders.

Your tax home is not your residence but rather your principal place of business activity including the entire city or general location of your business. So, your business trip cannot be in the general vicinity of your principal place of business for you to be away from home.

Amount of time you spend at each location
Degree of business activity in each area
Relative significance of the financial return from each area
No regular place of business: If, by the nature of the work, there is no regular or principal place of business, then your tax home will be the place where you regularly live and where you travel to different job sites to perform your service.

For example, a self-employed repair person may not have a regular place of business because they spend each workday at a different customer’s location.

Overnight Stay

Overnight stays for travel purposes do not specifically mean staying from evening to the next morning. Instead, overnight means that the trip is longer than a typical day’s work and long enough for you to require rest. Resting in your car is generally not enough, but if you have to get a hotel room, then the trip will qualify as overnight regardless of when you sleep.

Transportation vs travel expenses: Local transportation at your tax home can be deductible without an overnight stay—if there is a business reason for the transportation, such as driving from your office to visit a client. On a tangent, when you travel overnight, your transportation is deductible, and so are things like lodging, meals, and incidental expenses.

Temporary Travel

For purposes of business travel, a temporary stay is one that is expected to last for less than one year. Open-ended trips are not temporary.

However, say you initially anticipate that your trip will last less than one year, but it later becomes apparent that it will last more than one year. The trip is a deductible business trip up until the point in time it becomes apparent it will last more than one year.

The IRS will also consider a series of assignments to the same location, all for short periods, that together cover a long period to be an indefinite assignment. Any expenses you incur from this type of trip will not be deductible.

Step 2: Check the List of Business Expenses That Qualify for Deductions

Your travel expenses must be business-related—unless an exception applies—to qualify for a deduction. However, if you incur expenses that are purely for personal pleasure, they are nondeductible.

Here is a list of business travel expenses that can be deducted.

Round-trip Transportation To-and-From the Destination

Transportation for a round trip to and from your temporary work location is deductible—and it could be anything that gets you to the location, including via your personal car. If you use your personal car, your costs are calculated using either the actual expenses or the standard mileage rate .

In addition, you can deduct additional round trips to return to home when you are not working.

However, the deduction for the additional round trips is limited to the cost you would have incurred if you stayed at the temporary location. Those costs could include meals and lodging.

The business purpose of the meals is your business trip and are thus deductible—even if you eat alone.
Meals on days off qualify.
Travel to and from meals is deductible—even on your days off.
The meals do not have to have a specific business purpose, such as meeting with a client.
For longer trips, lodging can include monthly rentals.
If you return home on your days off but keep the lodging at your travel location, then the lodging is still deductible if it is ordinary and necessary. For instance, the monthly rent of an apartment at your travel location would be deductible even if you return home on the weekends.

Transportation at the Destination

Once you arrive at your destination, you may need additional transportation to get around town—and these costs are deductible. The only exception would be if you travel to the destination for a purely personal reason like sightseeing on your day off.

Incidentals

Incidental expenses are minor expenditures associated with business travel. You can deduct the actual cost of any one of the following expenses:

Shipping of baggage and sample or display material between your regular and temporary work locations
Business seminar and registration fees
Dry cleaning and laundry
Business calls include business communications by fax machine and other communication devices
Tips you pay for services related to any of these expenses
Parking, tolls, and fees
Any other similar ordinary and necessary expenses related to your business travel

Step 3 (For Those Mixing Business & Personal Travel): Allocate Expenses

When trips are both business and personal, the allocation of expenses varies based on the primary purpose of the trip. Determining the primary purpose of your journey requires you to evaluate the time spent on business vs personal activities.

Primarily Business Domestic Trips

If your trip is primarily for business purposes, then the round-trip transportation is 100% deductible and does not need to be allocated to the personal portion of your trip. However, all other expenses, like lodging and meals, must be allocated to personal expenses for days where there was no business reason for staying.

For example, if your seminar ends on Friday and you stay until Sunday, then the lodging and meals for Saturday and Sunday are nondeductible.

Primarily Personal Domestic Trips

If the primary purpose of your trip is personal, then none of the round-trip expenses are deductible. However, you can deduct the business portion of meals, lodging, and local transportation that was incurred for a business purpose.

Let’s say you stay a couple of days after your family vacation to meet with a client. The lodging and meals for those extra days are deductible.

Business Foreign Trips

The allocation of travel expenses on foreign trips is slightly different from the rules above. Round-trip transportation for foreign trips must be allocated to business and personal based on the number of business vs personal days on the trip. This is different from the “all or nothing” rule for the cost of domestic round-trip travel.

If your spouse joins you on a business trip, you usually cannot deduct any of their expenses. However, if your spouse’s trip satisfies a business purpose, then expenses must be otherwise deductible by the spouse.

Generally, for the travel costs of a spouse, dependent, or any other person to be tax-deductible, they must work for the business or be a co-owner.

Frequently Asked Questions (FAQs)

Are travel expenses tax deductible for business.

Yes, roundtrip travel is 100% tax deductible as long as the primary purpose of the trip is business. Once at your destination, expenses must be allocated between business and personal. However, all meals are deductible as long as the reason for your continued stay is business.

Can I deduct travel expenses for my employees?

Yes, you can generally deduct travel expenses for your employees as long as the expenses are ordinary and necessary, directly related to your business, and properly substantiated.

Is there a limit to the amount of travel expenses I can deduct?

Yes, there are some such as business travel on a cruise ship, where the expense is limited to $2,000 per year. Also, your expenses are limited to the non-lavish or extravagant cost of the trip, so you may want to be careful before booking a 5-star hotel.

Travel expenses are ordinary and necessary expenses you incur while you are temporarily away from home, so these expenses cannot be lavish in nature. To determine if a travel expense is deductible, it must be directly related to your trade or business.

When it comes to travel expenses, having well-organized records makes it much simpler to complete your tax return. Keep track of any records that may be used to substantiate a deduction, such as receipts, canceled checks, and other documentation.

About the Author

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Tim Yoder, Ph.D., CPA

Tim worked as a tax professional for BKD, LLP before returning to school and receiving his Ph.D. from Penn State. He then taught tax and accounting to undergraduate and graduate students as an assistant professor at both the University of Nebraska-Omaha and Mississippi State University. Tim is a Certified QuickBooks ProAdvisor as well as a CPA with 28 years of experience. He spent two years as the accountant at a commercial roofing company utilizing QuickBooks Desktop to compile financials, job cost, and run payroll. Tim has spent the past 4 years writing and reviewing content for Fit Small Business on accounting software, taxation, and bookkeeping.

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Managing business travel expenses

Best practices for travel expense management, what exactly are business travel expenses, need to get better control of your business travel spend, what business travel expenses can employees claim.

The actual costs of the travel (the flight, train ticket, hotel cost, etc)
The subsistence expenditure (your food and drink consumed during the time you travel)
Any other costs that came about because you made the journey such as entertainment.

What is not a legitimate travel expense

Commuting to and from your usual office
Any travel taken for private reasons.

How to manage the travel & expense process

1. decide on the employee payment method.

Ask employees to pay them upfront using personal card/bank account/cash and then have them submit expense claims.
Pay expenses directly from a company bank account or company card.

1. The company credit/spending card

2. pay with personal cards and submit expense claims, 2. set out a clear process for expense submission & reimbursement.

Pre-trip expense projection - ask employees to complete a projection prior to their trip, this will force them to consider their spend.
Receipt and invoice types - Be sure to state in what format you expect evidence to be provided (e.g. tax invoice in PDF/ physical receipt)
Expense claim submission timeline - Ensure that expense claims are all made within 5 working days of the business trip finishing.
Expense reimbursement period - The company commits to reimburse staff within 15- 30 days of the expense claim, during which period the company can query expenses.

3. Communicate the expense policy

Company-wide emails every quarter - Send an email with the policy every quarter, this may not be necessary if you are a small team.
Talk about it at all-hands meetings - Your job is important and saves the company money , and people need to know the rules. At the next meeting ask to speak for a few minutes giving examples (not naming names) of good and bad expense claims
Post it on your company intranet - Make sure it is a live document and easily accessible. Link it to a Google doc or whatever tool you use, this means updates don’t require you to ask employees to delete or disregard previous versions,

How to calculate and track business travel expenses like a pro

1. record everything and tag each expense.

By trip type (existing client, sales, corporate event)
By department
By expense type

2. Calculate every trip

Travel cost - plane, train, car hire, this includes the petrol you put in the car
Accommodation - Hotel, Airbnb, or wherever you stayed
Food & drink
Entertainment - either for clients or if permitted in policy
Wi-Fi connections , or anything else you needed to get your business done on the road.

3. Categorize your spend

Project your travel expenses, need more tips on managing business travel, how to reduce travel expenses for small businesses, 1. do you have to stay the night, 2. get the point(s), 3. cut the taxis, 4. get corporate rates, 5. get the per diem right, 6. recover the tax, travelperk makes calculating your recoverable vat simple, 7. get cashback.

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Building Your Business
Business Taxes

How to Deduct Business Travel Expenses

How "Business Travel" Is Determined
What You Can and Can't Deduct
Special Types of Travel

Documenting Travel Expenses

CaiaImageCLOSED / Getty Images

Do you travel for your own business? Do you have employees who travel? Make sure you know which travel expenses are deductible - and which are not.

How "Business Travel" Is Determined

Business travel is a specific term determined by the IRS to describe travel away from your tax home . which is described by the IRS 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." You are traveling away from home if your duties require you to be away from the general area of your tax home for a time that is at is "substantially longer than an ordinary day's work" and that requires you to sleep or rest while away from home.

Travel for Work Assignments

You must sleep away from home to be able to deduct these costs as travel expenses The travel must also be "temporary" (lasting less than a year).

You can't deduct travel expenses for an indefinite work assignment (including any work assignment of more than a year). You also can't deduct travel expenses if you expect to work at that location for more than a year.

Deducting Lodging Expenses

Long-term assignments at one location aren't considered as "travel," but employee lodging expenses at work locations, like renting an apartment while working at an extended assignment are deductible business expenses .

What You Can Deduct for Business Travel

You can deduct costs to travel by train, bus, or airplane between your tax home and your business destination. For travel by ship, see the section on cruise ships below.

Transportation: You can deduct the cost of travel by plane, train, bus, or car between your home and your business destination. You can't deduct the cost of a free ticket.

Taxi, commuter bus, airport limousine: You can deduct costs to take you from an airport to your hotel or to a business location.

Baggage and shipping: Costs for baggage delivery or for shipping business materials between your regular work location or tax home and a temporary work location are deductible.

Lodging and meals: You can deduct expenses for lodging and meals while away from home on a business assignment. You can submit actual expenses or use per diem rates, as determined by the IRS.

Other expenses; You can deduct other costs while traveling for business:

Dry cleaning and laundry
Business phone calls and faxes (not personal calls)
Tips for allowable expenses.
Other similar business expenses while traveling like computer rental

Business meals while traveling are deductible expenses, at 50% in most cases, but entertainment expenses are no longer deductible in any business situation.

Deductions for Special Types of Travel

Conventions and Trade Shows: If you travel to a convention or trade show, you may need to show that the convention is directly related to or associated with your business. If you have a sales booth at the convention, that would qualify. If you are a delegate to a convention, the purpose of the convention must relate to your business. Travel to and participation in conventions for political, investment, social, or other purposes is not deductible.

Cruises: Cost of travel on cruise ships, even for direct or associated business purposes, is limited. The IRS sets daily limits on luxury water travel each year, depending on the dates (months) of the cruise, based on an amount twice the allowable federal per diem rate for that travel period. IRS Be prepared to provide documentation that the cruise activities were related to business purpose.

The most important part of the process of deducting travel expenses is to save all of your receipts. You don't have to save paper copies, but you should be able to pull out a separate receipt (not just a line item on a credit card) to show (1) date (2) expense details (3) amount spent and (4) business purposes. Be as specific as possible.

Don't forget that travel expenses must be, as stated by the IRS: "ordinary and necessary expenses incurred while carrying on your trade or business."

Where to Show These Expenses

For sole proprietors and single-member LLCs, show these expenses in the "Expenses" section of Schedule C.
For partnerships and multiple-member LLCs, show these expenses in the "Deductions" section of Form 1065.
For corporations, show these expenses in the "Deductions" section of Form 1120.

The information contained in this article is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For current tax or legal advice, please consult with an accountant or an attorney.

IRS. " Topic No. 511 Business Travel Expenses ." Accessed Feb. 3, 2021.

IRS. " Publication 535 Business Expenses ." Page 9. Accessed Feb. 3, 2021.

IRS. " Publication 463 Travel, Gift and Car Expenses ." Page 5. Accessed Feb. 3, 2021.

IRS. " Publication 463 Travel, Gift and Car Expenses ." Page 9. Accessed Feb. 3, 2021.

IRS. " Publication 463 Travel, Gift and Car Expenses ." Page 8. Accessed Feb. 3, 2021.

How to find deductions for travel expenses

With more consultants and business travelers hitting the road for business travel, it's time for a brush-up on what expenses are eligible for tax deduction while they're away. If you're unsure about what qualifies, read on.

Find out more about Business Taxes

by Grace L. Williams

Grace L. Williams is a journalist. Her areas of expertise include small business, career, personal finance, and inve...

Key takeaways

What is business travel or a business trip, what is a business-related travel expense, what business travel expenses are tax deductible, are there other tax deductions for travel expenses, tracking expenses on your business trip, importance of documentation, combining business and personal travel, special considerations for self-employed individuals, getting help with tax deductions for travel expenses, frequently asked questions.

Business travel is back after the pandemic, and with that increase comes the age-old question every business traveler must ask at least once: "What can I deduct as a business expense while I'm on the road?"

You've likely heard the term "write-off" somewhere and may have used it somewhere within your business circles. But what exactly is it? You might wonder if you can book first-class travel or five-star lodging and eat in fancy dining establishments and then submit them as business write-offs. The short, overarching rule for those specifics is no, you probably cannot, but there is more to eligible business travel expenses than that.

A man looks at his cell phone while boarding a flight for business travel. Business travel deductions fall into three categories: costs related to how you will get to your destination (travel), where you will stay (lodging), and what you will eat and drink when you are there and in transit..

So before you book travel arrangements on your credit card (hopefully a designated business credit card), read on for more information about making expensing your business travel less stressful.

Understand IRS guidelines for deductible travel expenses to maximize tax savings.
Proper documentation is essential for claiming deductions, including meals and entertainment, with a clear business justification.
Utilize tax professionals and leverage technology to ensure accurate deductions, compliance with laws, and maximum savings on travel expense deductions.

A woman in a window seat on an airplane checks her phone during a business trip. business travel or a business trip is defined as any travel conducted that is business-related.

Simply put, business travel or a business trip is defined as any travel conducted that is business-related. To be considered eligible as a business trip, the travel itself must meet the following criteria:

The trip must be conducted for legitimate business purposes, not as leisure time, vacation, or personal purposes.
The trip must occur outside the bounds of a regular commute to and from work (or the main place of business) and home.

If the trip meets these criteria, it falls under the category of a business trip. It also means that you can deduct travel expenses whether you are a business owner sending an employee on your behalf or a self-employed individual.

To better understand business-related travel expenses, it's a good idea to look at overall business expenses. A business expense is incurred as part of the regular day-to-day operations of your employer (or for you if you are a self-employed individual) to conduct the business. Under current Internal Revenue Service (IRS) laws, special rules allow portions of business expenses to be deducted from the overall business income. These expenses are considered tax deductible, which means they are applied before any taxes are. The umbrella term "write-off" comes from this business tax deduction category.

In business, eligible tax deductions can have a significant impact. Being able to deduct expenses can often reduce the total overall taxable income . Cumulatively, tax-deductible expenses will likely reduce the total bill when it is time to file your tax return.

A deductible business travel expense is one that you or an employee incur during travel directly related to conducting business. In both instances (a business expense or a business travel expense), it is essential to ensure the expense falls under the category of being for bona fide business purposes. This means that deducting the travel expenses must be something genuinely related to conducting or doing a bona fide business purpose. If it is, its cost can be written off as part of business or business travel-related expenses. It applies to self-employed individuals or employees traveling for an employer or business owner.

So what exactly can you expense?

A man works on his laptop in an airport while waiting for his flight to board. In order to legally deduct business travel, specific criteria must be met.

First and foremost, consider the basics, or the "Big 3" in business travel. Essentials here include these three actual expenses: costs related to how you will get to your destination (travel), where you will stay (lodging), and what you will eat and drink when you are there and in transit. Each category within the Big Three can be an eligible travel expense and, therefore, a tax write-off, but they come with some criteria worth exploring.

Transportation expenses: If you plan to travel by car, and you will either use a vehicle you lease long-term or your car, there are two choices related to how this mode of transportation might be expensed. One choice is known as the “ standard mileage rate ." Under current IRS allowances, the standard mileage rate deduction for self-employed individuals and employees is 65.5 cents per mile for business-related travel. The rate per mile would apply to any driving conducted to or from the business destination. It would also apply to any driving conducted while you are at the destination if it is business-related. For instance, once at the destination, if driving must be done to run errands, those miles can be added to the total mileage count.

The other vehicle expense option for a business trip is to itemize the individual expenses. Eligible business costs, in this instance, include the lease, insurance, fuel, costs related to the upkeep and maintenance of the vehicle, such as oil changes or tune-ups, and any major repairs on the vehicle, such as fixing a flat tire.

If you are renting a car as part of your transportation expenses and it falls under the ordinary and necessary business travel expense category, the cost to rent a car would qualify as an eligible business expense. Other vehicle-related expenses that qualify for travel deductions include tolls and parking fees.

Actual expenses method

The actual expenses method involves calculating the total cost of vehicle use and multiplying it by the percentage used for business purposes. This includes:

Depreciation
Garage rent
Vehicle registration fees
Lease payments

To calculate the percentage of business use, divide the total business miles driven by the total miles driven in the year. While this method can lead to larger deductions, it requires detailed record-keeping and more complex calculations than the standard mileage method.

Standard mileage rate

The standard mileage rate allows you to claim a fixed rate per mile driven for business purposes, plus parking fees and tolls. The standard mileage rate for business in the United States is 65.5 cents per mile. The IRS determines This rate annually based on a study of the fixed and variable costs of operating a vehicle for business reasons, such as gas, maintenance, and depreciation.

This method can be used for self-employment, business-related travel, or when using a vehicle for work as an independent contractor. However, personal use of the vehicle is not eligible for this deduction.

Ticketed travel: For ticketed travel, like flights or trips by train, the cost of your ticket can be expensed as a travel deduction if your class fare qualifies as an eligible and reasonable expense. This means that while you likely won't be able to deduct first-class fare, you can deduct what is known as the ordinary and necessary expense related to the fare, which covers classes such as economy. You can also expense costs incurred while en route, such as baggage fees. And, if you are waiting at an airport or train station, any meal costs, snacks, or drinks would also qualify as business-related expenses.

Meal expenses and entertainment: Business meals cut eligible business expenses but with some stipulations, including the standard meal allowance. While current IRS laws permit for up to 50% of a business meal to be deducted, like ticketed travel, rental cars, and other business-travel-related costs, the meal must fall under an ordinary and necessary expense to be eligible as a tax-deductible business expense. If you are tempted to go all out and splurge on your dining, you might find that it is not an eligible business travel expense.

But changes have been made to the entertainment category. While entertainment used to be an allowed business expense, it is sometimes no longer eligible to claim tax deductions. This means that if you expect to take clients out as part of client meetings or conduct business, be sure to read the fine print since you might discover you cannot claim entertainment as a legitimate business expense.

Lodging expenses: Business travelers must consider where they will sleep while away. To be considered eligible as a business expense, the location of your stay must be outside of the main place of business and require overnight accommodation. Notably, in this expense category, IRS rules stipulate that for it to be an eligible business expense, the lodging cannot fall into the extravagant or considered recreational category.

Remember: With each of the "Big 3" and all other related business expenses to be deducted, the expenses must be ordinary and fall under the category of reasonable business expenses. If you opt for pricey vehicles, tickets, meals, and rooms instead of the available moderately-priced alternatives, you risk losing eligibility as legitimate business expenses.

There are some other expenses anyone traveling for business should consider submitting as tax-deductible expenses.

Event fees: These could come into play if you travel to an event such as a conference, convention, or trade show. In addition to the Big 3, certain expenses related to attending these events would qualify as eligible business travel expenses. The expenses are deductible if the event has an entry or booth fee. While you are there, if you attend workshops, lectures, or courses that require materials such as a workbook or registration, these would also be eligible as tax-deductible travel expenses. And, if you are running a booth or table at an event and need materials or supplies, the cost to purchase them would also qualify as legitimate business expenses.

Incidental expenses: Any reasonable additional expenses you incur while traveling for a business activity can be considered incidental expenses. For instance, if you incur expenses on ground transportation, a rideshare fee, taxi fare, or a subway ticket qualify as business expenses. Laundry and dry cleaning services are also eligible business activities. In addition, indirect expenses like office supplies can be eligible business expenses.

Organization before, during, and after the business trip will help you avoid potential pitfalls or headaches when filing expenses or taxes. From the outset, one great way to separate your business trips and expenses from personal expenses is to have a single credit or debit card that you designate for business use only. This de facto "corporate" card will come in handy and be a best friend on the road since it automatically creates a tally of itemized expenses courtesy of the real-time accounting and monthly statements that come with it.

Beyond the lone card designated for business expenses, your meticulous record-keeping will greatly help you when it's time to account for everything. If you don't want to use a third-party software program or expense-tracking app to track your expenses, a simple solution is to use a basic spreadsheet that tracks the date, the reason for the expense, and the cost. To set this up, once you have incurred an expense, note it down using the aforementioned basic information.

While on the trip, another simple organizational tool is keeping all receipts and other applicable hard-copy records and materials in one designated place. A pouch or envelope will work fine as the place to keep these items. Make sure you read the receipt or record, and if it does not have information such as the name and address of the business, write it on the back before you stash it away. Finally, if a receipt is for something like a business lunch, ensure the date and information about the place of business are on the receipt. Then, write the name of the person you shared your time with and the reason for meeting up somewhere on the receipt.

Claiming travel expense deductions requires proper documentation. This includes retaining receipts and records for all expenses incurred during your business trip. For meals and entertainment expenses, you'll need to note the nature of the meeting, including who you met with, when, and the topics discussed.

It's worth noting that lodging expenses on non-business days may still be eligible for deductions if specific strategies are employed, such as incorporating “vacation days" between workdays. In such cases, the total cost of lodging for the trip can still be tax deductible even when no work is taking place on the weekend. However, meals and entertainment expenses without a clear business justification won't be deductible and must be paid personally.

A man and woman enjoy fall foliage after a business trip to the Northeast U.S. The non-business portion of business travel expenses may be viewed as taxable income if paid by the individual or company.

Allocating expenses between business and personal activities is essential to ensure accurate deduction claims. Expenses must be allocated based on actual usage, so the non-business portion of the expenses may be viewed as taxable income if paid by the individual or company.

To accurately allocate expenses between business and personal activities for tax deductions, follow these steps:

Track usage for a period of time.
Determine the allocation by proportionally dividing the expenses based on the amount of business and personal use.
Maintain proper records to support the allocation.

When combining business and personal travel, careful allocation of expenses and adherence to specific rules is important. Expenses related to the personal nature of the trip cannot be deducted; only those incurred for business purposes can be.

If traveling abroad, you must spend a minimum of 25% of your time conducting business to qualify as a business trip and claim travel expense deductions. If you conduct business for less than 25% of the time while on a trip, you can still deduct travel costs. This deduction must be proportional to the amount of time spent on business.

Rules for international travel

International travel has additional rules to consider when claiming travel expense deductions. As mentioned, you must spend at least 25% of your time abroad conducting business to claim travel-expense deductions.

If you use 25% or less of your trip for business purposes, you can deduct related travel costs in proportion to the time spent on work. This can help to make international business trips more affordable. For example, if 40% of your time is spent on business activities, you can claim the entire cost of airfare as a business expense.

Self-employed individuals should be aware of special considerations when deducting travel expenses, such as home office deductions and computer rental fees. Understanding these unique aspects can help self-employed individuals maximize their tax savings and ensure compliance with tax laws, especially regarding their tax home.

Home office considerations

Home office deductions can be claimed if the office is the primary place of business and is regularly used for business purposes. The IRS has specific guidelines for the regular use of a home office for business purposes, such as the office being used exclusively and regularly for business purposes.

To claim a home office deduction, you can use the simplified method the IRS provides. Here's how it works:

Multiply the allowable square footage of your home office by the prescribed rate of $5 per square foot.
The maximum allowable square footage is 300 square feet, so the maximum deduction you can claim using this method is $1,500 annually.
The simplified option allows for a standard deduction without the need for detailed record-keeping.

Deducting computer rental fees

Computer rental fees can be deducted if the equipment is used for business during the trip. The full cost of the computer rental may be deducted as a business expense.

To claim a deduction for computer rental fees from business travel expenses, you must provide relevant documentation demonstrating the rental fees paid, such as receipts or invoices. Proper record-keeping is essential to support your deduction and ensure compliance with IRS regulations.

Leveraging technology

Technology, such as expense tracking apps and online bookkeeping services, can simplify record-keeping and documentation for travel expense deductions. These tools can help you track and categorize expenses, making it easier to identify and compute deductible expenses for tax purposes.

Expense tracking applications can:

Generate reports and summaries of travel expenses
Be beneficial for tax filing and auditing purposes
Save time and effort in tracking and documenting your travel expenses
Ensure accurate deductions and compliance with tax laws

Leveraging technology in expense tracking can be a valuable tool for managing your finances.

Sometimes, you might need more help. This guide provides basic questions about business travel deductions and expenses. Still, you are not alone if you have other questions about what might qualify as a tax-deductible business expense. There are experts at LegalZoom who can answer specific questions and better advise you about both business expenses and business travel-related expenses.

You might have questions about whether specific costs related to your business qualify as ordinary and necessary expenses or wonder if percentages of a certain expense or the entire cost can be completely deductible. Additionally, professionals in the know about things like a specific tax home can help you sort out concerns related to your business so that you can always claim the proper travel expenses. For any consultant looking to get back into the swing of travel, help and practical tips are just a click away.

Understanding and maximizing travel expense deductions can save you significant money on your tax return. By familiarizing yourself with the requirements, maintaining proper documentation, and leveraging the expertise of tax professionals and technology, you can ensure accurate deductions, compliance with tax laws, and, ultimately, keep more money in your pocket.

What kind of travel expenses are tax deductible?

Tax deductible travel expenses include airfare, train/bus fares, taxi rides between an airport or station and a hotel, or from the hotel to a work location.

What are the three requirements for a traveling expense deduction?

To qualify for a traveling expense deduction, you must have a “business trip," leave your tax home, have most of the trip business-related, and plan the trip in advance.

How do I prove travel expenses for taxes?

To prove business travel expenses for taxes, use credit card slips with notes on the business purpose made at the time of incurring the expense.

Are daily travel expenses tax deductible?

Daily travel expenses from your home to a regular place of business are not tax deductible. However, you can deduct transport expenses when traveling between your home and a temporary work location outside the metropolitan area where you live and normally work. Additionally, ordinary and necessary travel expenses incurred while away from your home and your main place of business can be deducted.

How do I allocate expenses between business and personal activities during a combined trip?

Allocate expenses proportionally based on the amount of business and personal use for a period of time, and maintain proper records to support deductions.

Credits & Deductions

INFORMATION FOR...
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POPULAR FORMS & INSTRUCTIONS
Form 1040 Instructions
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POPULAR FOR TAX PROS
Form 1040-X
Circular 230

Here’s what taxpayers need to know about business related travel deductions

Here are some details about these valuable deductions that all business travelers should know.

Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. The travel period must be substantially longer than an ordinary day's work and a need for sleep or rest to meet the demands the work while away.

Travel expenses must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes.

Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year.

Travel expenses for conventions are deductible if attendance benefits the business and there are special rules for conventions held outside North America .

Deductible travel expenses while away from home include the costs of:

Travel by airplane, train, bus or car between your home and your business destination.
Fares for taxis or other types of transportation between an airport or train station to a hotel, from a hotel to a work location.
Shipping of baggage and sample or display material between regular and temporary work locations.
Using a personally owned car for business which can include an increase in mileage rates .
Lodging and non-entertainment-related meals .
Dry cleaning and laundry.
Business calls and communication.
Tips paid for services related to any of these expenses.
Other similar ordinary and necessary expenses related to the business travel.

Self-employed or farmers with travel deductions

Those who are self-employed can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) .
Farmers can use Schedule F (Form 1040), Profit or Loss From Farming .

Travel deductions for the National Guard or military reserves

National Guard or military reserve servicemembers can claim a deduction for unreimbursed travel expenses paid during the performance of their duty .

Recordkeeping

Well-organized records make it easier to prepare a tax return. Keep records, such as receipts, canceled checks, and other documents that support a deduction.

More information:

Publication 463, Travel, Gift, and Car Expenses
IRS updates per diem guidance for business travelers and their employers

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Credits and deductions
Business expenses

Can I deduct travel expenses?

If you’re self-employed or own a business , you can deduct work-related travel expenses, including vehicles, airfare, lodging, and meals. The expenses must be ordinary and necessary.

For vehicle expenses, you can choose between the standard mileage rate or the actual cost method where you track what you paid for gas and maintenance.

You can generally only claim 50% of the cost of your meals while on business-related travel away from your tax home, provided your trip requires an overnight stay. You can also deduct 50% of the cost of meals for entertaining clients (regardless of location), but due to the Tax Cuts and Jobs Act of 2017 (TCJA), you can no longer deduct entertainment expenses in tax years 2018 through 2025. In 2021 and 2022, the law allows a deduction for 100% of your cost of food and beverages that are provided by a restaurant, instead of the usual 50% deduction.

On the other hand, employees can no longer deduct out-of-pocket travel costs in tax years 2018 through 2025 per the TCJA (this does not apply to Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses). Prior to the tax rule change, employees could claim 50% of the cost of unreimbursed meals while on business-related travel away from their tax home if the trip required an overnight stay, as well as other unreimbursed job-related travel costs. These expenses were handled as a 2% miscellaneous itemized deduction.

Related Information:

Can I deduct medical mileage and travel?
Can I deduct my moving expenses?
Can I deduct rent?
Can I deduct mileage?
Can employees deduct commuting expenses like gas, mileage, fares, and tolls?

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Small Business Trends

25 small business tax deductions- what’s new for 2023.

You work hard enough to ensure that your small business survives, and you don’t want to overlook any potential tax deductions that can maximize your savings.

In this article, we’ll cover the most important small business tax changes for 2023 and also provide information about solar energy installation credits and EV vehicle credits. Then, we’ll list all possible tax write-offs you can use, whether you’re a sole proprietor or running a small business with employees.

Remember that different deductions are available depending on your business’s structure – sole proprietorship, LLC, S-Corp or other classification.

Let’s dig right in and help you maximize potential benefits. We’ll start with a list of key changes for 2023, provide updated information about solar energy installations, and then list the top 25 tax deductions for small businesses.

Tax deductions - workers eating at a restaurant

IRS Reports Small Business Tax Changes for 2023

Maximum net earnings. The maximum net self-employment earnings subject to the social security part of the self-employment tax is $160,200 for 2023. There is no maximum limit on earnings subject to the Medicare part.

Standard mileage rate. For 2023, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use during 2023 increased to 65.5 cents a mile.

Redesigned Form 1040-SS. For 2023, Schedule(s) C and SE (Form 1040) are available to be filed with Form 1040-SS, if applicable. For additional information, see the Instructions for Form 1040-SS.

Bonus depreciation. The bonus depreciation deduction under section 168(k) begins its phaseout in 2023 with a reduction of the applicable limit from 100% to 80%.

Form 7205, Energy efficient commercial buildings deduction. This form and its separate instructions are used to claim the section 179D deduction for qualifying energy efficient commercial building expenses that are now reported on new line 27b of Schedule C (Form 1040). See Form 7205 and its instructions for more information.

Commercial clean vehicle credit. Businesses that buy a qualified commercial clean vehicle may qualify for a clean vehicle tax credit. See Form 8936 and its instructions for more information.

Business meal expense. The temporary 100% deduction for business meal expenses has expired. The business meal deduction reverts back to the previous 50% allowable deduction beginning January 1, 2023.

Did You Install Solar Energy?

There are two types of tax credits available for small business owners who installed solar energy.

The Investment Tax Credit (ITC)

The ITC is a tax credit that reduces the federal income tax liability for a percentage of the cost of a solar system that is installed during the tax year. For 2023, as long as the project meets federal labor requirements, that’s a 30% of the cost tax credit.

The production tax credit (PTC)

The PTC is a per kilowatt-hour (kWh) tax credit for electricity generated by solar and other qualifying technologies for the first 10 years of a system’s operation. It reduces the federal income tax liability and is adjusted annually for inflation. In other words, check for the latest update on that number.

In general, solar systems that were placed in service in 2022 or later and begin construction before 2033 are eligible for a 30% ITC or a 2.75 ¢/kWh PTC if they meet labor requirements issued by the Treasury Department or are under 1 megawatt (MW) in size.

Top Tax Deductions for Small Business

Tax-deductible business expenses can help reduce your annual tax liability, so it’s important to know what deductions are available. Here are the top 25 small business tax deductions:

1. Home Office Deduction

If you use a portion of your home exclusively for business, then you can often claim the associated expenses, such as utilities, repairs, and insurance, as home office deductions . You can also deduct a portion of your rent or mortgage payments. This is calculated using a percentage – for example, if your home is 1,000 square feet and you use a 100-square-foot office, you can deduct 10% of your home expenses, such as mortgage payments and utilities.

2. Real Estate Taxes

If you own a business property, such as an office or retail store, then you can claim the associated real estate taxes as a tax deduction. You’ll need to provide proof of payment, such as a receipt or bank statement.

3. Business Meals

Meals consumed while conducting business can be deducted as long as they are reasonable. This includes meals with employees, clients, and vendors. In order to qualify for the deduction, the meal must be directly related to business and not personal in nature. However, for 2023, the deduction for meals was cut from 100% to 50% of the cost of the meal.

4. Legal and Professional Fees

Fees paid to attorneys, accountants, and other professional services can be deducted as business expenses. Services such as filing fees, audits, and incorporation costs can also be deducted.

5. Business Property Rental

Any rental payments for business property such as an office, warehouse, or equipment can be deducted. For example, if you’re a contractor and you lease a storage unit for supplies and tools, you can deduct that as a business expense. You’ll need to provide a lease agreement or rental receipt as your proof of payment. While you can’t deduct the total amount of your rent, you can deduct a portion that is equal to your business use.

6. Mortgage Interest

If you own a business property, you can claim the associated mortgage interest as a business expense and tax deduction. The deduction is limited to the amount of your loan’s principal balance and the associated interest rate.

7. Health Insurance Premiums

If you pay health insurance premiums for yourself or your employees, these can be deducted as a business expense. Note that in some cases, the IRS may limit the amount you can deduct, so it’s best to check with your tax advisor first.

8. Business Education Expenses

If you attend a seminar or take classes related to your business, the associated costs can be deducted as a business expense. This includes tuition, registration fees, and travel expenses. Online courses can also be deducted.

9. Internet Expenses

Do you pay for an internet connection for your business? If so, then the associated fees can be deducted. This includes monthly charges, equipment rental fees, and installation fees. Since every business is online these days, this deduction can be quite helpful.

10. Business Equipment

If you purchase business equipment, such as computers or furniture, the cost can be deducted. You may also be able to deduct any associated repair and maintenance costs. Make sure to keep your receipts and documentation.

11. Business Insurance Premiums

The cost of business insurance premiums can be deducted as a business expense. This includes liability, property, and life insurance. Note that some types of insurance may only be deductible if they are related directly to your business operations.

12. Business Travel Expenses

If you travel for business purposes, then the associated expenses can be deducted. This includes airfare, hotel stays, car rentals, and meals. Be sure to keep all receipts and documentation for your trips in case the IRS requests it.

13. Office Supplies Business Expense

Office supplies like paper, ink, and toner are all deductible business expenses. You can also deduct the cost of any other supplies that you use for your business, such as invoices and stationery.

14. Advertising & Marketing Costs

Advertising and marketing costs related to promoting your business, such as website design, can be deducted. This includes the cost of business cards, flyers, and other promotional materials. Online marketing expenses can also be deducted.

15. Phone Expenses

The cost of your business phone and associated charges can be deducted as a business expense. This includes cellular bills, landline charges, and long-distance calls. You may also be able to deduct any extra costs for business-specific features, such as a dedicated fax line.

16. Business Vehicle Expenses

Does your business have a company car or truck? If so, then the associated fuel and maintenance costs can be deducted. You can also deduct any mileage that is related to business trips. If your business has a fleet of vehicles, then this deduction can add up quickly. If you’re a sole proprietor and your vehicle is for both personal and business use, you can claim the mileage, but you must have accurate records detailing when the vehicle was used specifically for business.

17. Employee Compensation

If you have employees, then the cost of their salaries and wages can be deducted. You’ll also need to deduct any other compensation that is provided, such as bonuses and stock options. Be sure to comply with all applicable tax laws when deducting employee compensation.

18. Startup Costs

If your business is new, then you may be able to deduct the cost of launching it. This includes legal fees, accounting expenses, and other costs associated with setting up your business. Make sure to keep all of your receipts and documentation for this deduction as well.

19. Professional Service Fees

The cost of hiring a professional such as an accountant or lawyer is deductible. This includes any fees associated with filing taxes. It also includes any fees for legal advice or representation for any business-related matters, such as a contract review. Hiring a professional can save you time and money in the long run, so make sure to take advantage of this deduction.

20. Retirement Contributions

Contributions to a retirement plan for yourself and your employees can be deducted. This includes contributions to 401(k)s, IRAs, and other types of retirement plans. This deduction can help you save for your future and also provide benefits for your employees. These deductions are specific by state and can be found at the Small Business Administration website (http://sba.gov/business-guide/manage-you-business/pay-taxes.)

21. Bad Business Debt

Any debt that is deemed uncollectible can be deducted. This includes any money that is owed to you by customers or vendors but cannot be collected. This deduction can help offset any losses that your business may have incurred due to bad debt.

22. State Tax Deductions

Deductions on state and local taxes for businesses can vary from state to state, so be sure to check with your local tax authority for more information. Some states offer deductions on sales taxes or income taxes, while others have specific deductions that apply to certain industries. Make sure to take advantage of any available state tax deductions in order to reduce your business’s taxable income.

23. Employee and Client Gifts

If you give out client gifts or provide employee perks, such as holiday bonuses, those expenses can be deducted. This includes any items that are given out in appreciation of a job well done, such as gift cards or dinner vouchers. Just make sure to keep track of all gifts and bonuses to ensure that you take advantage of the deduction.

24. Foreign Earned Income Exclusion

If your business earns income in a foreign country, then you may be able to take advantage of the foreign-earned income exclusion. This can help reduce the amount of taxable income that you owe on your business earnings.

25. Charitable Contributions

Any donations that you make to a qualified charity can be deducted. This could include money, goods, or services that you provide to a charitable organization. Charitable giving can help to support a good cause while also providing you with a tax break.

tax deductions - client and employee gifts

Tips for Documentation and Record-Keeping

Effective documentation and record-keeping are pivotal for maximizing tax deductions. It’s essential to maintain organized records of all business-related expenses throughout the year. Utilize digital tools or accounting software to track expenses in real time.

Keep digital or physical copies of all receipts, invoices, and bank statements. Categorize expenses for easier reference and ensure that each expense is substantiated with appropriate documentation. Regularly reviewing and updating your records can significantly ease the tax filing process and support your deduction claims.

Common Mistakes to Avoid

Common mistakes in claiming tax deductions can lead to missed opportunities or, worse, trigger audits. One frequent error is the commingling of personal and business expenses.

That’s why often the first advice given to new small business owners is to start a business bank account and obtain a business credit card. Any fees related to banking services, such as wire transfers and international transactions, can be deducted. This includes any monthly or annual fees that you may be charged for having a business bank account. Be sure to keep track of any fees that you incur so that you can deduct them at tax time.

Overestimating deductions is another pitfall; only claim deductions for expenses that are ordinary and necessary for your business.

Neglecting to track small expenses or failing to stay updated on tax law changes can also result in losing out on valuable deductions. Being meticulous and conservative in your approach can help avoid these common mistakes.

How to Claim Small Business Tax Deductions

Impact of Deductions on Overall Tax Strategy

The strategic use of tax deductions should be an integral part of your overall business tax strategy. Deductions can significantly lower taxable income and, consequently, the tax liability.

However, it’s crucial to understand how these deductions align with your business goals and financial plans. For instance, investing in equipment or technology may provide immediate deductions, but consider how these investments contribute to long-term business growth.

Also, assess how deductions like home office or vehicle expenses fit into your broader financial picture. A holistic approach to tax planning can optimize financial outcomes for your business.

Don’t forget you can use the latest accounting software for small business to find out what your tax liabilities are for the year.

Utilizing Professional Tax Assistance

Navigating the complexities of tax deductions can be challenging, especially for small business owners who juggle multiple responsibilities. Professional tax assistance can be invaluable in this regard.

Tax professionals can provide expert advice tailored to your specific business needs, ensuring you take advantage of all eligible deductions while remaining compliant with tax laws.

They can also offer strategic guidance on tax planning and help you prepare for future tax years. Investing in professional tax services can lead to significant long-term benefits for your business, including potential savings and reduced risk of errors.

How to Claim Small Business Tax Deductions

When it comes to claiming deductions on your small business income taxes, there are a few key things to keep in mind. Here is a step-by-step guide on exactly how to claim small business tax deductions:

Step 1: Gather the necessary documents

Before you start claiming deductions, make sure to gather all necessary documents, such as receipts or invoices for any expenses you are deducting.

Step 2: Fill out the appropriate tax forms

You will need to fill out all of the appropriate tax forms in order to claim deductions. This may include business income tax forms, as well as any state-specific tax forms.

Step 3: Calculate deductions

Once you have all the necessary paperwork in place, you can begin to calculate your deductions. This includes calculating all applicable business expenses, as well as any state or federal credits that may be available.

Step 4: File taxes

After calculating your deductions, you can file your income taxes using the appropriate forms. Make sure to double-check all information to avoid any issues with incorrect filings. It is important to learn as much as possible about how to file self-employment taxes if you are doing it yourself.

Step 5: Submit taxes

Once the tax forms are completed and filed, you can submit them to the IRS. After submitting, you should receive a confirmation that your taxes have been processed.

It is also worth noting the top small business tax mistakes owners make when they file so you can learn from their mistakes.

Here’s a comparison table of the above steps for quick and easy reference:

How to Maximize Your Tax Deductions and Cut Your Taxable Income

Tax deductions are an important way to reduce your taxable income and save money. With the right strategy, you can maximize your deductions and reduce your tax burden. Here are five ways to maximize tax deductions:

Track all of your business expenses. If you want to maximize your deductions, you need to make sure you track any and all business expenses throughout the year. This includes anything from office supplies to travel expenses.
Take advantage of deductions for self-employed individuals. If you are self-employed, you may be eligible for a variety of deductions, such as the self-employed health insurance deduction and the home office deduction.
Look for any available state tax deductions. Many states offer additional deductions for businesses, such as research and development credits or sales tax deductions.
Make sure to keep accurate records. Accurate records are essential for claiming any deductions. Make sure to keep track of all expenses, such as receipts and invoices.
Consult with a tax professional. If you’re unsure how to maximize your deductions, it can be helpful to consult with a tax professional who can give you tailored advice.

What is the section 163(j) limitation on the deduction for business interest expense?

Generally, taxpayers can deduct interest expenses paid or accrued in the taxable year. However, if the section 163(j) limitation applies, the amount of deductible business interest expense in a taxable year cannot exceed the sum of:

the taxpayer’s business interest income for the taxable year;
30% of the taxpayer’s adjusted taxable income (ATI) for the taxable year; and
the taxpayer’s floor plan financing interest expense for the taxable year.

What’s going on with Net Loss Deductions?

The Tax Cuts and Jobs Act (TCJA), section 11012, as amended by the CARES Act, section 2304, and as further amended by the Inflation Reduction Act, section 13903, revised section 461(l) to limit the amount of losses from the trades or businesses of noncorporate taxpayers that the taxpayer can claim each year, beginning after 2020 and ending before 2029. You can’t deduct net losses in excess of a threshold amount in the current year. The amount of the excess business loss is treated as an NOL for the current year for purposes of determining any NOL carryover for later tax years. You’d use IRS Form 461 to figure the excess business loss.

Standard Deductions vs. Itemized Deductions?

Standard deductions are a set amount that taxpayers can deduct from their taxable income to reduce overall tax liability. This deduction is available to those who do not itemize their deductions on their tax return. For 2023, the standard deduction for a single filer is $14,600.

Itemized deductions are a list of expenses that can be used to reduce your taxable income if the total of the expenses is more than your standard deduction. Itemized deductions include medical bills, charitable donations, mortgage interest payments, and more.

Tax Deductions vs Tax Credits?

Tax deductions are an important tool for reducing one’s taxable income and the amount of taxes one must pay. They are different from tax credits, which are a dollar-for-dollar reduction in taxes owed.

Tax deductions reduce the amount of taxable income subject to tax, while tax credits reduce the total amount of taxes paid. It is important to understand the difference between these two types of tax relief in order to maximize your savings.

What is the 20% Business Tax Deduction?

That’s the qualified business income deduction (QBI). The QBI is a tax deduction that allows eligible self-employed and small-business owners to deduct up to 20% of their qualified business income on their taxes.

In general, total taxable income in 2023 must be under $182,100 for single filers or $364,200 for joint filers to qualify.

This deduction applies to businesses that are organized as pass-through entities, such as sole proprietorships, partnerships, and S-corporations. The deduction is based on the business’s net income from taxable activities and is limited by a variety of factors, such as the type of business, wages paid to employees, and the number of capital investments.

What types of business expenses are tax deductible without receipts?

Navigating the world of business expenses can be complex, especially when it comes to determining which costs are tax deductible without physical proof like receipts. The IRS understands the challenges businesses face and, thus, allows for the deduction of certain expenses even in the absence of receipt documentation. This provision, however, should be exercised with caution, ensuring that the expenses claimed are legitimate and justifiable.

Some business expenses that can typically be deducted without receipts include:

Transportation: Costs associated with business-related travel, such as mileage or fuel for company vehicles.
Office Supplies: Items like pens, paper, or other common supplies used in daily operations.
Tools & Equipment: Essential tools or machinery required for business processes or services.
Professional Services: Fees paid to professionals, including accountants or legal consultants.
Marketing & Advertising: Expenses related to promoting the business, like online advertisements, brochures, or promotional events.

While these categories offer some flexibility, it’s still advisable for businesses to maintain thorough documentation whenever possible. Keeping organized records, even in the absence of receipts, can provide support during tax audits or financial reviews.

Businesses can still deduct certain expenses without needing receipts as evidence. Basic costs such as transportation, office supplies, and tools, services such as accountant fees, and marketing can be deducted without needing receipts.

What is the maximum tax refund you can get?

The maximum tax refund you can get is largely dependent on your individual income and filing status. Generally, the more money you make and the more deductions you take, the higher your refund amount will be. Additionally, tax credits and deductions can significantly increase your refund amount. Your best bet for maximizing your refund is to consult a tax professional who can provide you with tailored advice for your individual situation.

How can you lower your income tax?

There are several strategies you can use to lower your income tax bill. First, maximize deductions by tracking all of your business expenses and taking advantage of any applicable tax credits or deductions. Second, consider restructuring your business to take advantage of lower tax rates for entities such as S-corporations or LLCs. Finally, consider contributing to a retirement plan such as an IRA, 401(k), or SEP-IRA. These contributions can be deducted from your taxable income, reducing your overall tax liability.

How much can an LLC write off?

The amount an LLC can write off depends on the type of deductions it is taking. Generally, business expenses such as advertising costs, employee salaries, and office supplies are fully deductible. Additionally, LLCs may be eligible for various tax credits and deductions, such as the 20% business tax deduction discussed above. Consult a tax professional to determine the exact amount you can write off.

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36 Business Expense Categories for Small Businesses and Startups

Attention to expense deductions may not play a prominent role in the financial planning process for small businesses and startups—and that may be costing them. Sure, you’re focused on customer service and improving your products and services. But some easy moves could significantly lessen your tax bill.

For example, say you’re putting 250 miles per week on your private vehicle to get products out to customers. It may seem time-consuming to keep a log separating business and personal use, but you’re losing out on close to $600 in deductions. Or maybe you shuttered your office and started running your company from a spare room. As long as the space is exclusively used for business, you can deduct $5 for every square foot, up to $1,500.

Business expenses are the costs of running a company and generating sales. Given that broad mandate, the IRS doesn’t provide a master list of allowable small-business and startup deductions. As long as an expense is “ordinary and necessary” to running a business in your industry, it’s deductible. That makes it well worth the time to organize your spending so your business takes all legitimate write-offs, creates an effective financial plan , pays the proper amount in quarterly taxes—and doesn’t need to sweat an audit.

What Is a Tax-Deductible Business Expense?

Which expenses may be written off varies depending on the nature of your business. Start by reviewing Internal Revenue Service Publication 535 , which discusses the deductibility of common business expenses and general rules for filing your taxes.

Those “ordinary and necessary” expenses must be incurred in an organization motivated by profit. Even if your small business faces financial problems and doesn’t actually generate a profit, the intent needs to be there. Otherwise, the IRS may determine your business is a hobby and disallow expenses.

The IRS also suggests distinguishing usual business expenses from categories that fall under the cost of goods sold (COGs) and capital expenses to ensure accuracy, since some business expenses cannot be deducted in the year they’re incurred.

What Are Business Expense Categories?

By developing expense categories that fit your business and recording and organizing expenditures as you go, you’ll find it easier to get all the deductions you’re due.

You’ll also save significant headaches for your bookkeeper or tax preparer. Speaking of, it’s worth spending time with a financial adviser to understand the types of expenses you can and can’t include in a specific category.

Below is an example small-business expense categories list that applies to most companies, outlining what’s included and how you can qualify for a deduction. Add to this industry-specific categories, such as R&D costs or spending to seek VC funding.

Advertising:

This covers the cost of items and services to directly promote or market your business. Examples include fees paid to advertising or marketing companies to produce promotional materials, billboards, brochures, posters, websites and social media images. You may even deduct spending on a PR campaign.

Continuing education:

This can include courses for continuing education or seminars to stay current on industry trends. Relevant materials, books and registration fees for you and your employees are tax-deductible. You can also deduct payments made to employees to reimburse them for relevant educational expenses.

Credit and collection fees:

Businesses that use accrual basis accounting, where revenue and expenses are recorded when they’re earned or incurred even if no money changes hands at that point, can deduct unpaid invoices as business bad debt. Any fees spent trying to collect on debt, such as hiring an outside company to collect what’s owed, also count. A better bet: Minimize bad debt and increase cash flow by optimizing your billing processes.

Interest paid on business loans, ongoing credit lines and business credit cards are tax-deductible expenses. Bank fees, such as monthly maintenance or overdraft fees, also count.

Dues and subscriptions:

Subscriptions to industry magazines or journals related to your business can be deducted on your taxes. Membership fees include those paid to professional or trade associations that can help promote your business and even to your local Chamber of Commerce.

Employee benefit programs:

Payments made toward benefits such as disability insurance, life insurance, dependent care assistance, health plans for you and your employees and adoption assistance are tax-deductible. Note that this is one area, along with workers’ compensation insurance, where companies tend to spend more than they need to.

Besides that workers’ compensation insurance, you can deduct premiums for business-related insurance, including for liability, malpractice and real estate. Auto insurance premiums on a personal vehicle are a bit more complicated: If you deduct a flat mileage rate, you can’t itemize and must use the actual expense method, where you determine what it actually costs to operate the car for the portion of the overall use of the car that’s business use.

Maintenance and repairs:

Companies that use fleet vehicles as part of their operations can deduct the portion used for business. Deductible expenses include parking fees and gas. Otherwise, you can choose to utilize the standard mileage rate. Additionally, repair and maintenance of other types of equipment and machinery used in your business can also count.

Under actual expenses calculations for vehicles, you may include gas, oil, repairs, tires, insurance, registration fees, licenses and depreciation (or lease payments) prorated to the total business miles driven.

Legal and professional expenses:

These can include fees paid to certified public accountants (CPAs), financial planners, lawyers or other types of professionals.

Office expenses and supplies:

Items such as cleaning products, paper, notebooks, stationery and even snacks and beverages for employees can be deducted as supplies. The expenses category includes costs related to operating your business, such as website hosting and software.

Monthly telecommunications fees in a commercial space can be deducted, as can additional phone lines in a home office as well as cell phone contracts as a subcategory of office expenses.

For a commercial space, utilities such as electricity, internet, sewage and trash pickup fees are fully deductible. For a home office, you can deduct utilities in proportion to how much of your home is used for business.

Postage and shipping:

Stamps, freight and postage fees to mail business-related items, including products to customers and return shipping labels, count. Envelopes and packaging materials are included in office supplies.

Items such as ink cartridges, printers or payments for printing services can be included under this business expense category. Note that if you decide to do some direct-mail marketing, you can deduct the cost of producing the materials here, but postage must be listed separately even if the printer handled mailings.

Any rental payments made to occupy a warehouse for inventory or office space to conduct business are tax deductible. Your business structure —C corporation (C-corp) or S corporation (S-corp)—dictates whether you can pay a reasonable amount to rent property from shareholders.

Salaries and other compensation:

Employee salaries, gross wages, commissions, bonuses and other types of compensation count as tax-deductible expenses. Compensation can even extend to salaries paid to children and spouses, provided payments were made through payroll and those individuals performed services for your business. The amount paid does need to be considered reasonable.

Business-related travel expenses include flights, hotels and meals—but note that only 50% of the cost of meals for employees and customers is deductible. Costs for candidates who are traveling for an interview are deductible. Examples include parking fees and flights.

Costs include cell phone, electricity, internet, sewage and trash pickup fees (for commercial spaces).

Business meals:

You can deduct 50% of qualifying food and drink purchases. It needs to be related to the business, such as work conferences and meals on business trips. As a small business, you can deduct 50% of food and drink purchases that qualify.

Business use of your car:

You may be able to write off costs of maintaining and operating your vehicle if it’s strictly for business use. However, if it’s mixed, you can claim mileage related to the business use.

Moving expenses:

For work-related moving expenses, you may be able to deduct 100% of the costs related to your move. You will need to pass the distance test, such as your new job location being at least 50 miles from your former location.

Depreciation:

These are costs for big ticket items like machinery or a vehicle over its lifetime use, instead of it over one single tax year.

Charitable contributions:

You can deduct charitable contributions made to qualifying organizations—you may need to itemize these deductions.

Child and/or dependent care:

Qualifying costs associated with child or dependent care can be written off, though you’ll need to meet the IRS requirements.

Startup expenses:

Businesses who launched a new venture may be able to deduct up to $5,000 in startup expenses leading up your launch. Examples include marketing and employee training costs.

Mortgage interest:

If you’re purchasing a building or taking out a loan to build or improve your home for business purposes, you may be able to deduct the interest incurred.

Ones, such as bookkeeping software or recurring subscription with SaaS companies, used for business related purposes may be fully tax deductible.

Books and magazine subscriptions:

Magazine, books and journals that are specialized and directly to your business may be tax-deductible. For instance, newspapers may not be, but industry-specific magazines would.

Foreign earned income:

If you have a business based abroad you may be able to leave out any foreign income earned off your tax return, known as foreign earned income exclusion. You’ll need to meet certain requirements such as being under a certain income threshold.

Medical expenses:

Self-employed individuals, who pay for their own medical care expenses or insurance premiums, can deduct these expenses on their tax return. Examples include doctor’s fees and prescription drugs.

Licenses and permits:

Any required licenses and permits can be tax deductible. Examples include building permits and licenses to practice law in your state.

Manufacturing or raw materials:

These are directly related to the cost of goods sold or items and storage paid to sell your products.

Retirement contributions:

Contributing to a tax-advantaged account, such as an IRA or 401k, can reduce your taxable income—a great way for those who are self-employed to save on taxes.

Real estate taxes:

If you have a home office and itemize your taxes, you may be able to deduct some of the taxes you pay.

Client gifts:

Gifts for employees, clients or vendors may be fully tax deductible. For example, you give your employees gift baskets during the holiday season or send gift cards to vendors.

Employee loans:

If you pay an advance to an employee and expect them to pay you back (as in, they didn’t do any extra work to earn this “extra” income), you can deduct this amount. However, any interest paid may count as business income.

Skip the Golf?

If you have employees who frequently travel for business, ensure you follow small-business expense management best practices like making it easy for them to upload the receipts required by the IRS.

3 Steps to Categorize Expenses for Your Small Business or Startup

Poor tax compliance and inconsistent cash flow are among the top 10 financial challenges for small businesses. You can break that mold by being consistent in categorizing expenses. That allows you to see where and how much you’re spending to operate your company while being prepared come tax time.

You’ll also gather insights that will enable you to create a financial statement that adds visibility into profitability and cash flow. These statements are required for audits and are often requested by investors.

Here are three steps to categorize business expenses.

Determine correct categories for your specific business.

Choosing the right categories will depend on your industry. For example, a greeting card business may have dedicated categories for shipping and storage rental, whereas software-as-a-service ( SaaS) companies may have categories for digital services.

Start by identifying the expense categories your business uses the most—that financial statement will help here—and ones that you’ll need to grow. Refer to the list above to get started.

Reconcile and review financial accounts regularly.

Reviewing financial accounts is a good habit that will encourage you to stay on top of your expenditures. Reconciling bank statements can be easily done using accounting software. If you find you’re having challenges, a business-only credit card is a top expense management best practice.

Assign a category to all transactions.

Using the list of categories you came up with, look at your spending details and assign anything deductible. Pay particular attention to where receipts are required. Note that keeping business and personal finances separate is a top financial tip for small businesses and shields you from liability, so as you assign an expense, make sure it’s business-related.

What Else Can I Deduct as a Business Expense?

As we’ve mentioned, your home can yield many deduction opportunities, based on the percentage of space your office occupies—but you’ll need to itemize mortgage interest, utilities, insurance and property taxes. Or, you can claim the standardized deduction, which is $5 per square foot up to 200 square feet.

A few other items you may not have considered:

The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain groups, including some veterans and disabled individuals, who face significant barriers to employment.

Costs to protect intellectual property created by you or your employees, such as software code, a logo for your business or a patent for a new product or service.

Losses from a natural disaster or crime. If a fire or flood destroys your stock, or items are stolen, you may deduct losses not covered by your insurance.

Use Accounting Software to Track Spending and Categorize Business Expenses

One of the easiest ways for business owners to categorize expenses and track spending is to use accounting software, which often has prepopulated business categories. You can amend or add as needed, and it will automatically compile transactions.

Accounting software also helps you to use the data from your expenses to run profit and loss reports. Doing so shows you the amount you’re spending in each category so you can assess whether you need to get your costs under control or if you’re on track. You can break down spending at specific time intervals to see how expenses change. These reports simplify the deduction process while revealing your annual business expenses.

Improve Expense Management Efficiency

Free Business Expense Worksheet

One of the most exhaustive guides to what requirements need to be met for qualifying business expenses is the IRS publication 535. However, if you want a resource that’s easier to wade through, download our free overview guide . You can review a list of common business expense categories as well as nondeductible items.

Small Business and Startup Expense FAQs

What can be written off as a business expense.

Generally, if an expense counts as ordinary and necessary to conduct business, you can deduct it as a business expense. There is no comprehensive list because what counts as “ordinary and necessary” is highly dependent on industry.

What can’t be written off as a business expense?

Any spending considered a personal expense can’t be written off. In addition, you can’t deduct expenses related to client entertainment, with the exception of meals; fines or penalties for violating a law; country club dues; and illegal payments.

Can you deduct job expenses?

As of 2018, job expenses, such as for a relocation or other costs paid by workers but not reimbursed by employers, are no longer eligible. However, if a business reimburses an employee, then the employer can deduct that reimbursement as an expense.

Can I write off my business startup costs?

Businesses can write off startup costs, depending on the type of expenditure. Allowable deductions must be directly related to getting the business up and running and organizational in nature, such as training staff and incorporation fees. You may be able to deduct up to $5,000 for startup and an additional $5,000 for organizational costs.

Can I take the standard deduction and still deduct business expenses?

Yes, you can deduct business-related expenses even if you take the standard deduction.

What are three major types of expenses?

The three major types are fixed, variable and periodic.

Fixed expenses are those that don’t change for the foreseeable future. These can include auto lease payments or rent.
Variable expenses are expenses such as utilities, which can change from month to month.
Periodic expenses are ones that happen occasionally, like business travel or emergency car repairs.

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EXPENSES & DEDUCTIONS

Special per diem rate for business travel rises

Individual Income Taxation
S Corporation Income Taxation
IRS Practice & Procedure

The special per diem rates by which taxpayers may substantiate ordinary and necessary business expenses of travel away from home will be higher starting Oct. 1, the IRS provided Monday in Notice 2023-68 .

Generally, in lieu of actual lodging, meal, and incidental expenses incurred, a payer may consider substantiated, for federal tax purposes, an employee's expenses incurred for employment-related travel in an amount up to or equaling the federal per diem rate for the locality of travel.

The high-low substantiation method applies a higher rate to designated high-cost localities and a lower rate to all other localities. The annual update includes the per diem rate under the high-low substantiation method for travel within the continental United States (CONUS).

The rate for travel to high-cost localities within CONUS is $309; the rate for non-high-cost localities will be $214. The current rates for the period Oct. 1, 2022, to Sept. 30, 2023, are, respectively, $297 and $204. The portion of the rates treated as paid for meals for purposes of Sec. 274(n) is $74 for high-cost CONUS localities and $64 for all other CONUS localities, both the same as this year and the previous year.

The notice revised the list of high-cost localities for the upcoming new annual period (Oct. 1, 2023, to Sept. 30, 2024) for which the new rates are in effect. High-cost localities have a federal per-diem rate of $261 or more. Notably, Los Angeles, Calif., and Portland, Ore., have been removed from the list of high-cost localities for the new period.

The notice also provides the special rates for taxpayers in the transportation industry. The meals and incidental expenses rates are $69 for any locality of travel within CONUS and $74 for localities of travel outside CONUS, both the same as the current rates.

The rate for incidental expenses remains $5 per day, for travel in and outside CONUS.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at [email protected] .

Recent developments in Sec. 355 spinoffs

The research credit: documenting qualified services, income tax treatment of loyalty point programs, tax court rules cancellation of debt is part of gain realization, listing of reportable transactions under the apa.

This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction.

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Everything you need to know about T&E

Every dollar counts in the business world, yet a significant amount often goes unchecked: travel and expense (T&E). T&E is a substantial category in business accounting that handles costs incurred by employees on the road or while entertaining clients.

These expenses, which often include meals, lodging, travel fares, and client entertainment costs, quickly add up. That’s why you need a solid T&E expense management strategy to keep up with your business's financial health. But before we dive into strategic guidelines and tools for managing these expenses, let's lay the foundation.

What are T&E expenses?

T&E expenses can vary widely, depending on the industry, company size, and corporate policies regarding employee spending limits and acceptable expenditures. Examples of T&E expenses include the following:

hotel accommodations

car rentals

meals on the road

expenses associated with entertaining clients

parking fees

T&E expense management tips

The following are some best practices management tips when it comes to T&E.

Create a clear policy

One of the first steps in effective T&E expense management is to create a clear policy. This policy should outline what expenses are considered eligible for reimbursement and provide guidelines for employees on how to submit their expenses. It should also specify any spending limits or restrictions and detail the reimbursement process.

Educate employees

Once you’ve got a clear policy in place, another critical part of effective T&E expense management is educating and empowering employees about the company's T&E process. This way, employees are aware of what will and won’t be approved, avoiding any unwelcome surprises.

When they go on a business trip, for example, should they use their own card or a company card? What are the limits for spending in each category? How should they keep track of receipts and other documentation? And, if they need to pay for things with their own money upfront, how do they get reimbursed? Even better, use a T&E platform that helps educate employees on their policy when booking travel and generating expenses.

Use technology

Investing in a T&E expense management software simplifies and streamlines the process. It allows employees to easily submit their expenses, track their spending, and ensure compliance with company policies.

What you want to look for in a good expense management software is something that provides automated approval workflows, allowing managers to review and approve expenses quickly. You also want something that makes it easy on employees when it comes to tracking expenses and knowing if they’ve reached their limit or not.

For example, a platform that uses a receipt scanning feature is ideal. This helps to speed up the reimbursement process and ensures expenses are being properly reviewed and authorized.

Set spending limits

To control costs and prevent overspending, set spending limits for different expense categories. This can be done by establishing maximum allowable amounts for things like meals, accommodation, and transportation. Doing this also helps to encourage employees to be more aware of their spending.

Regularly audit and review expenses

Minimize fraud and ensure policy compliance by regularly auditing and reviewing T&E expenses. This means randomly selecting and examining expense reports to verify the accuracy of the information provided.

Then, you can identify any discrepancies early on and address them right away to maintain financial transparency and reinforce the importance of sticking to company policies.

Leverage data analytics

Data analytics can play a crucial role in T&E expense management. By leveraging data analytics tools, companies can gain insights into spending patterns, identify areas of potential cost savings, and uncover any fraudulent activities. Analyzing expense data also helps to identify trends, such as excessive spending on certain categories or by specific employees.

Creating a robust T&E budget

For small businesses, effectively managing T&E spend is crucial in financial planning and can influence the company's bottom line. Here are the steps involved in creating a T&E budget for your company.

Analyze past spending

Start by looking at past expenses to understand spending patterns. Categorize these expenses to identify where the bulk of the money goes. Then, you’ll be ready to create guidelines around these categories and know where to set limits.

Establish spending guidelines

Set clear policies on what’s considered an acceptable T&E expenditure. This helps in preventing overspending and fraudulent claims, but it also means that employees have a clearer understanding of how the process of spending, documenting, submitting, and reimbursing works.

Estimate future T&E spend

Estimate the upcoming period's expenses based on historical data and projected business growth. Remember to account for things like seasonal variations and planned business expansions. If you have expense software management in place, make sure it has a tool like Expensify’s Insights and Custom Reporting feature , which gives you a detailed, visual summary of company spending.

Allocate funds

Based on your estimation, allocate a specific amount for T&E in your budget, considering your business goals and financial constraints. Is it an important part of your business to wine and dine clients? Does your company employ events contractors nationwide, who need to be reimbursed for on-the-road expenses?

Whatever it is, having a set budget in place makes sure you stay on target when it comes to expenses.

Monitor and adjust

Regular monitoring of your T&E budget is not just important; it’s necessary. When you know what’s being spent and where it’s going, you can adjust the budget to accommodate unforeseen changes or to optimize spending.

Implement a T&E expense management solution

Investing in an expense management solution to streamline the T&E process creates a system of checks and balances, and ensures policy compliance. Instead of guessing how to categorize business expenses , a good tool automates it for you so you don’t have to do the heavy lifting.

Common T&E challenges

Almost every business has T&E expenses, but small businesses, in particular, face unique challenges when managing T&E.

Maintaining a clear T&E expense policy

It can’t be overstated: small businesses must have a clear T&E expense policy. Without it, ambiguity can lead to improper spending or compliance issues.

Solution: Implement clear and robust guidelines that outline allowable expenses and procedures for submissions.

Budgeting and monitoring T&E spend

Small businesses often struggle with forecasting and keeping T&E spending within budget, affecting profitability.

Solution: Use T&E expense management tools to track spending and understand trends for better forecasting.

Processing expense reports

Manual processing of expense reports is time-consuming and subject to human error.

Solution: Adopt automated expense management systems to streamline submissions and approvals.

Ensuring compliance and preventing fraud

T&E can be an area vulnerable to fraud and misuse.

Solution: Regularly audit expenses and educate employees on the importance of compliance to minimize risks.

Supporting a mobile and growing remote workforce

In a world where working from anywhere is starting to become the norm, access to T&E management tools on the go is essential.

Solution: Provide mobile-friendly tools, like Expensify, that allow employees to submit and manage expenses anytime, anywhere.

Manage T&E expenses with Expensify

Expensify simplifies the management of T&E spend, especially when it comes to tracking and controlling expenses. As a platform designed to ease the (often) daunting process of expense reporting, Expensify is a go-to solution for T&E expense management.

Key Features:

Automated expense reporting : Expensify automates the expense report creation process , saving time and reducing errors.

Receipt scanning : Snap and upload receipts using Expensify's mobile app, which automatically extracts relevant details.

Approval workflows : Customize approval workflows to align with your company's policies.

Reimbursements : Process reimbursements quickly, often within a single day.

Integration : Synchronize with accounting software for streamlined financial management.

With Expensify, you can maintain a balanced T&E budget by easily monitoring your T&E spend, ensuring compliance with company policies, and making expense tracking user-friendly for employees.

T&E expenses FAQs

What is a t&e transaction.

A T&E transaction is any financial activity that involves the costs of travel and entertainment related to business operations. As previously mentioned, these transactions typically include expenses incurred while employees are on business trips or hosting clients and may cover airfare, lodging, meals, client entertainment, and ground transportation.

Who are involved in the T&E process?

The T&E process usually involves several stakeholders within an organization:

Employees : They incur expenses while performing business-related activities.

Managers : Responsible for approving expense reports and ensuring they’re in line with company policies.

Accounting department : Processes reimbursements and maintains accurate financial records.

Auditors/Internal compliance : Ensures adherence to corporate policies and external regulations. The collaboration between these parties is crucial for effective T&E expense management.

What are T&E operating costs?

T&E operating costs are the day-to-day expenses that businesses incur as part of their travel and entertainment activities. These costs form part of the operational budget for companies with staff who travel or entertain clients regularly and can include:

Transportation (flights, trains, car rentals)

Accommodation (hotels, short-term rentals)

Meals and dining

Client entertainment

Miscellaneous travel-related expenses (e.g., WiFi charges, tips, parking fees)

Ready to make your T&E expense management less of a headache? Enter your information below, and we’ll take it from there.

Nick Tooker

Nick Tooker joined Expensify in 2017. He currently leads Investor Relations for the company, while driving top-line growth as a member of the strategic marketing team. He was an integral part of Expensify's successful Initial Public Offering in 2021. Prior to Expensify’s IPO, Nick focused on growing relationships with the company's top partners such as: Netsuite, Xero, & Gusto.

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The Complete Guide to Deducting Business Travel Expenses

Tax deductions. In the vocabulary of taxes there are few words with a sweeter ring. This is particularly true for taxpayers who may not qualify for tax credits, namely the refundable kind. There are numerous tax deductions available: medical expense, charitable, student loan interest, mortgage interest and more.

One of the more complex and varied type is related to business travel deductions. Deducting business travel expenses is is particularly useful to taxpayers who own their own business, operate as a freelancer or contractor or have significant travel for their regular course of business.

Because of the complexity, we decided the topic deserves more than a few blog posts. The in-depth guide from The Tax Institute covers:

What is a “tax home”?
How to determine whether an expense is “ordinary and necessary”
Deducting international travel expenses
Differentiating personal and business travel expenses
Special rules for conventions and cruises
Local travel expenses
What qualifies as substantiation
Vehicle expenses
Industry-specific deductions
And much more

Click here to download “The Complete Guide to Deducting Business Travel Expenses” by The Tax Institute at H&R Block.

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What is Business Travel Insurance? | Money

U nexpected events can disrupt even the most meticulously planned business trip . From medical emergencies to trip cancellations , these hiccups can be stressful and costly.

This is where business travel insurance comes in. It acts as a safety net, safeguarding you against a variety of unforeseen expenses:

Medical emergencies : This includes coverage for unexpected medical bills and treatment costs incurred during your trip.
Trip cancellations and delays: This coverage provides reimbursement for non-refundable trip expenses if your journey is canceled or delayed due to covered reasons like illness or bad weather.
Lost or delayed luggage: This covers the cost of replacing essential items if your luggage goes missing or arrives late.
Medical evacuation and repatriation : Coverage for transport back home in case of a medical emergency .

Many business travel insurance plans go beyond the essentials, offering additional benefits:

24/7 Assistance: Access to customer service representatives who can help with travel arrangements, finding medical care , or language translation.
Business Equipment Coverage: Upgrade your policy to include coverage for laptops, tablets, and other business essentials in case of loss, theft, or damage.
Rental Vehicle Coverage: Add coverage for rental cars used during your business trip .

How does business travel insurance work?

Business travel insurance affords many of the same protections as personal travel insurance .

Most travel insurance policies reimburse travelers — up to the plan’s limits — if their insured trip is canceled, postponed or delayed due to a covered reason or if they incur emergency medical expenses. They also generally cover lost or delayed luggage and medical evacuation and repatriation.

Additionally, most insurers provide 24/7 customer service and assistance with things like making travel arrangements, finding medical care facilities and obtaining language support.

While coverage options and details vary by insurer, some of the best travel insurance companies let you customize their standard policies by adding coverage for business property and rental vehicles — for an additional cost.

Research the specific types of coverage offered by each company you’re considering before purchasing a plan. It may also be helpful to review our guide on what travel insurance covers .

What does business travel accident insurance cover?

Business travel accident (BTA) insurance can cover different things, depending on the company and policy you select. There is no standard definition for terms like business travel insurance and business travel accident insurance. Companies market various policies under names like these, but policy names don’t guarantee specific types of coverage.

That said, BTA policies may cover:

Medical expenses stemming from an accident
Medical evacuation and repatriation
Emergency travel assistance
Accidental death and dismemberment
24/7 travel assistance

Depending on the insurer, coverage may also extend to personal trips tied to business ones.

Types of coverages in a business travel insurance policy

Again, while coverage options vary by insurer, you can generally find travel insurance plans that bundle the following types of coverage.

Trip cancellation and interruption

When you take a trip, you typically pay for things like your flight, accommodations and activities before you leave. Trip cancellation and interruption insurance reimburses you for those pre-paid, non-refundable trip costs if you cannot travel due to a covered reason.

Your policy will list covered reasons for canceling or interrupting your trip in the description of coverage. However, some common covered reasons include:

Illness or injury: You, your travel companion or a family member not traveling with you becoming ill or getting injured
Death: The death of a family member or traveling companion
Inclement weather: A natural disaster or severe weather at your destination
Job loss: You or your traveling companion losing their job or getting laid off

To cancel your trip for reasons other than those listed as covered under your policy, you must purchase cancel for any reason (CFAR) coverage. As the name suggests, CFAR travel insurance will reimburse you a percentage of your total trip cost (typically 50% to 75%) if you cancel for any reason at all.

CFAR is generally sold as an upgrade, so it costs extra. And to qualify you must insure the entire cost of your trip and purchase coverage within a certain timeframe, among other potential requirements.

Medical expenses and emergency medical evacuation

Most travel insurance policies cover unforeseen medical emergencies and illnesses. So, if you sprain an ankle or get food poisoning during your business trip, your policy should reimburse you for a portion of the medical expenses you incur. This generally extends to dental emergencies and even emergency medical evacuation to the nearest medical facility and/or your home after you’re discharged.

However, it’s important to note that most plans don’t cover pre-existing conditions . Some insurance companies offer a waiver of their pre-existing conditions exclusion, provided you meet certain requirements. These generally include purchasing coverage soon after booking, insuring the full cost of your trip and being medically fit to travel.

Similarly, doctor visits for routine checkups or prescription refills aren’t covered under travel insurance. But if you’re a U.S. citizen traveling domestically, these and other expenses are likely covered under your health insurance policy.

Travel delays and missed connections

Your business travels could be interrupted by a missed connecting flight or unforeseen arrival or departure delays. In either scenario, you may be faced with unexpected costs such as last-minute hotel bookings or additional transportation expenses to reach your destination.

Most travel policies reimburse you (up to a maximum) for expenses stemming from delays in your travel plans. However, policies generally require a certain number of hours to have passed — three hours or more, for example — before this coverage takes effect.

Baggage loss and delay

If you’re traveling with luggage, there’s always a chance the airline could lose it or send it to the wrong location. If that happens, you may need to purchase new clothes and supplies.

Baggage loss and delay coverage can reimburse you for some of these expenses. However, just as with travel delay coverage, most plans require a certain number of hours to have passed before coverage takes effect.

Business equipment coverage

Companies selling business travel insurance offer optional coverage for business equipment such as laptops, tablets and cameras. If the equipment is lost or damaged by your airline carrier or is stolen during your trip, the policy can cover the cost of repairing or replacing the item — up to your policy limits.

Some insurers also cover part of the cost of repairing or replacing rental equipment that your airline carrier loses, damages or fails to deliver on time.

Conditions may apply with either of these options, so the insurer may require you to report the loss within a certain timeframe or take necessary precautions to avoid a loss. Additionally, the company may exclude certain items from coverage, including passports and other documents.

Rental car damage

Rental car damage coverage is an optional add-on you can purchase along with many base travel insurance policies. This coverage option can reimburse you up to the policy’s coverage limit if your rental car is damaged or stolen during the scheduled rental period.

As with other business travel insurance options, exclusions and conditions may apply. For example, for damages to be covered, the driver at the time of the accident must generally be the same person listed in the rental car agreement.

Note, however, that not all rental car companies accept rental car damage as a suitable form of coverage. Always check with the car rental agency before purchasing this rider.

Who needs business travel insurance?

If you frequently travel for work, business travel insurance can help you cover a portion of the expenses you may incur in the event of a medical emergency, travel delay, cancellation or other covered loss.

This type of policy can benefit those who don’t have business travel coverage through their employer or are self-employed and often travel overseas carrying valuable business equipment. Even if your employer provides travel insurance, you may still want to purchase individual policy to supplement any gaps in their coverage.

How to get business travel insurance

If you think business travel insurance may be right for you, following these steps can help you get the right travel insurance policy and coverage amount.

1. Determine the type and level of coverage you need

Your first step should be to determine the amount of coverage you need for your upcoming trip. To do that, consider whether you already have coverage through a credit card or other form of insurance.

For instance, some of the best business credit cards provide travel insurance and protection if you use the card to book your plane ticket, hotel room or rental vehicle. Depending on your needs and whether your credit card provides primary or secondary coverage, you may not need additional insurance.

Similarly, if you’re traveling domestically, your health insurance policy likely covers medical emergencies that happen across state lines. And your homeowners or renters insurance should cover personal property stored in your vehicle.

If you’re traveling internationally and don’t have other forms of coverage, consider the risks you’re likely to face during your business trip. For example, if you’re traveling with valuable gear, opting for a policy with a high coverage limit for business equipment can protect your pocket and give you peace of mind.

Lastly, if you’re a frequent business traveler, an annual travel insurance plan may be more cost-effective than purchasing separate single-trip plans. Annual plans generally cover all eligible trips you take within the coverage period, as long as each one doesn’t exceed the maximum trip duration outlined by the plan.

2. Compare travel insurance plans from reputable providers

Once you have a good idea of the type and level of coverage you need, start comparing plans from multiple companies. Remember that while some insurers sell dedicated business travel policies, others provide comparable coverage through their standard travel insurance plans.

Regardless of marketing terms, compare policies based on the following:

Coverage exclusions
Coverage limits and maximum benefit amounts
Deductibles you may need to pay before your coverage activates

You may also want to check out travel insurance reviews to get a better sense of a company’s overall offer.

4. Get quotes from multiple travel insurers

To find the coverage you need at the best price, compare travel insurance quotes from multiple companies. Most travel insurers feature quote tools on their websites that can provide accurate price estimates in minutes. All you need to do is input basic personal information and travel details such as:

Your age and location
Your travel destination
The total cost of your trip
The coverage tier and optional add-ons you want

5. Purchase the policy that best suits your needs and budget

The last step in the process is to compare the insurance offers you’ve gathered and choose the one that best aligns with your requirements. While it may be clear which company offers the most extensive coverage for a reasonable price, you should also be mindful of deductibles and exclusions that could increase your out-of-pocket costs should you need to file a claim.

Is business travel insurance worth it?

The cost of travel insurance can range from 4% to 12% of your total trip cost. That may or may not be a figure you believe is worth paying. The decision comes down to the risks you’re likely to face during your travels and the level of financial responsibility you’re willing to assume in the event of a medical emergency, loss, delay or cancellation.

Summary of Money’s what is business travel insurance

Business travel insurance can provide financial protection for your next business trip by reimbursing you for a portion of the expenses you might incur if you had a medical emergency, travel delay or other covered loss.

While some companies market business insurance as a separate product, these policies generally offer many of the same coverage options as other travel insurance policies. However, some insurers also extend coverage to business equipment and business equipment rentals.

As with any other form of insurance, read your policy details carefully to understand exactly what your plan covers and to what extent.

This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author's alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer .

Key benefits of travel medical insurance

Travel medical insurance coverage
Who needs medical travel insurance?

Choosing the right travel medical insurance

How to use travel medical insurance, is travel medical insurance right for your next trip, travel medical insurance: essential coverage for health and safety abroad.

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Travel medical insurance covers unexpected emergency medical expenses while traveling.
Travelers off to foreign countries or remote areas should strongly consider travel medical insurance.
If you have to use your travel medical insurance, keep all documents related to your treatment.

Of all the delights associated with travel to far-flung locales, getting sick or injured while away from home is low on the savvy traveler's list. Beyond gut-wrenching anxiety, seeking medical treatment in a foreign country can be exceedingly inconvenient and expensive.

The peace of mind that comes with travel insurance for the many things that could ail you while abroad is priceless. As options for travel-related insurance abound, it's essential to research, read the fine print, and act according to the specifics of your itinerary, pocketbook, and other needs.

Travel insurance reimburses you for any unexpected medical expenses incurred while traveling. On domestic trips, travel medical insurance usually take a backseat to your health insurance. However, when traveling to a foreign country, where your primary health insurance can't cover you, travel medical insurance takes the wheel. This can be especially helpful in countries with high medical care costs, such as Scandinavian countries.

Emergency medical evacuation insurance

Another benefit that often comes with travel medical insurance, emergency medical evacuation insurance covers you for any costs to transport you to an adequately equipped medical center. Emergency medical evacuation insurance is often paired with repatriation insurance, which covers costs associated with returning your remains to your home country if the worst happens.

These benefits are for worst-case scenarios, but they might be more necessary depending on the type of trips you take. Emergency medical evacuation insurance is helpful if you're planning on traveling to a remote location or if you're traveling on a cruise as sea to land evacuations can be costly. Some of the best travel insurance companies also offer non-medical evacuations as part of an adventure sports insurance package.

It's also worth mentioning that emergency medical evacuation insurance is required for international students studying in the US on a J Visa.

Types of coverage offered by travel medical insurance

The exact terms of your coverage will vary depending on your insurer, but you can expect most travel medical insurance policies to offer the following coverages.

Hospital room and board
Inpatient/outpatient hospital services
Prescription Drugs
COVID-19 treatment
Emergency room services
Urgent care visits
Local ambulance
Acute onset of pre-existing conditions
Dental coverage (accident/sudden relief of pain)
Medical care due to terrorist attack
Emergency medical evacuation
Repatriation of mortal remains
Accidental death and dismemberment

Travel medical insurance and pre-existing conditions

Many travel insurance providers will cover pre-existing conditions as long as certain conditions are met. For one, travelers need to purchase their travel insurance within a certain time frame from when they placed a deposit on their trip, usually two to three weeks.

Additionally, travel insurance companies usually only cover stable medical conditions, which are conditions that don't need additional medical treatment, diagnosis, or medications.

Who needs travel medical insurance?

Even the best-laid travel plans can go awry. As such, it pays to consider your potential healthcare needs before taking off, even if you are generally healthy. Even if well-managed, preexisting conditions like diabetes or asthma can make a medical backup plan even more vital.

Having what you need to refill prescriptions or get other care if you get stuck somewhere other than home could be essential to your health and well-being. That's without counting all the accidents and illnesses that can hit us when away from home.

Individuals traveling for extended periods (more than six months) or engaging in high-risk activities (think scuba diving or parasailing) should also consider a solid medical travel plan. Both scenarios increase the likelihood that medical attention, whether routine or emergency, could be needed.

In the case of travel via the friendly seas, it's also worth considering cruise trip medical travel insurance . Routine care will be available onboard. But anything beyond that will require transportation to the nearest land mass (and could quickly become extremely expensive, especially if you're in another country).

Like other types of insurance, medical travel insurance rates are calculated based on various factors. Failing to disclose a preexisting health condition could result in a lapse of coverage right when you need it, as insurers can cancel your policy if you withhold material information. So honesty is always the best policy.

Even the best-laid travel plans can go awry. As such, it pays to consider your potential healthcare needs before taking off, even if you are generally healthy. Making the right choice when shopping for travel medical insurance can mean the difference between a minor hiccup in your travels and a financial nightmare.

When a travel insurance company comes up with a quote for your policy, they take a few factors into consideration, such as your age, your destination, and the duration of your trip. You should do the same when assessing a travel insurance company.

For example, older travelers who are more susceptible to injury may benefit from travel medical insurance (though your premiums will be higher). If you're traveling for extended periods throughout one calendar year, you should look into an annual travel medical insurance plan . If you're engaging in high-risk activities (think scuba diving or parasailing), you should seek a plan that includes coverage for injuries sustained in adventure sports.

Travel medical insurance isn't just for peace of mind. If you travel often enough, there's a good chance you'll eventually experience an incident where medical treatment is necessary.

Before you submit your claim, you should take some time to understand your policy. Your travel medical insurance is either primary (you can submit claims directly to your travel medical insurance provider) or secondary (you must first submit claims to your primary insurance provider). In the case of secondary travel medical insurance, a refusal notice from your primary insurance provider, even if it does not cover medical claims outside the US, is often required as evidence of protocol.

On that note, you should be sure to document every step of your medical treatment. You should keep any receipts for filled prescriptions, hospital bills, and anything else documenting your medical emergency.

As many people have found out the hard way, reading the fine print is vital. Most travel insurance policies will reimburse your prepaid, nonrefundable expenses if you fall ill with a severe condition, including illnesses like COVID-19.

Still on the fence about whether or not medical travel insurance is worth it ? It's worth noting that many travel insurance plans also include medical protections, so you can also protect against trip cancellations and other unexpected developments while obtaining travel medical insurance.

While short, domestic trips may not warrant travel medical insurance, it may be a good idea to insure longer, international trips. You should also consider travel medical insurance for trips to remote areas, where a medical evacuation may be expensive, and more physically tasking trips.

While shopping for travel medical insurance may not be fun, a little advance leg work can let you relax on your trip and give you peace of mind. After all, that is the point of a vacation.

Medical travel insurance frequently asked questions

Trip insurance covers any unexpected financial losses while traveling, such as the cost of replacing lost luggage, trip interruptions, and unexpected medical expenses. Travel medical insurance just covers those medical expenses without the trip interruption or cancellation insurance.

Travel insurance companies usually offer adventure sports as add-on coverage or a separate plan entirely. You'll likely pay more for a policy with adventure sports coverage.

Many travel medical insurance policies now include coverage for COVID-19 related medical expenses and treat it like any other illness. However, you should double-check your policy to ensure that is the case.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

**Enrollment required.

Main content

April 2024 Travel, Expense, and Card Policy Updates

The Travel and Card team is happy to announce the following policy updates and changes:

UW-3022, International Travel : To align with Universities of Wisconsin foreign/international travel policy, two new allowable expenses associated with international travel will be added: international calling/data plans when accompanied by a business justification and required inoculations/vaccinations.
UW-3024, Expense Reimbursement : Universities of Wisconsin require receipts regardless of cost for international calling/data plans as well as required inoculations/vaccinations. These have been added to the section “Receipts are always required…”
UW-3018, Meals and Incidentals : A note has been added to clarify that individual phone calls are included in the incidental per diem rate, but international calling/data plans are reimbursable for foreign travel if supported by a UW business purpose.
UW-3075, Official Functions and Expenses: Several Divisions on campus have reached out regarding whether children/dependent travel expenses may be included as part of an Official Function pre-approval for a UW-Madison job interview trip. Policy language currently limits this to “ a spouse/significant other/companion.” The “a” will be removed to allow for more flexibility in arranging job interview travel, where the number of accompanying individuals is not limited to one . The policy will now read: “Travel expenses for spouse/significant other/companions to accompany an applicant on a UW-Madison job interview trip.” The approved Official Function must outline each additional traveler for the job interview trip, the approved travel expenses for additional travelers, and the business benefit for including the additional traveler(s) on the job interview trip.
UW-3026, Non-Payable/Non-Reimbursable Expenses : This policy needed to be updated to reflect that dependent travel expenses may be payable/reimbursable if associated with a preapproved Official Function for job applicant travel. Additionally, a provision for rental of graduation regalia was added. Purchase of regalia is neither payable nor reimbursable. Finally, we clarified a point of confusion around manuscript expenses; both article submission fees and article publication fees are payable/reimbursable when purchased using a card product (e.g., debit, credit).

All of these changes are reflected in the UW-Madison Policy Library .

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6 Strategies for LGBTQ+ Financial Prep to Move to a Safer Place

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Legislation targeting LGBTQ+ communities is intensifying across U.S. states. Since 2022, the number of states banning gender-affirming care has risen from four to 23, and 21 states banned or restricted abortion. Two-thirds of states also currently have laws on the books that criminally penalize certain activities based on a person’s HIV-positive status.

Recent Washington Post analysis of FBI crime data reveals that hate crimes in K-12 schools have more than quadrupled in response to restrictive laws.

In 2017, long before the most recent legislation, a survey by National Public Radio, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health found more than half of the LGBTQ+ community regularly reported experiencing threats, harassment or violence due to their sexuality or gender identity.

It stands to reason that community members may wonder how to plan for their safety and well-being. If you need to move due to safety concerns — and have some time to prepare for the move — any financial planning you can do beforehand will go a long way. Consider the following six tips from financial and LGBTQ+ experts around the country.

How to financially prepare for a move (if you can)

1. evaluate your assets and expenses.

Taking stock of your income , expenses and assets can help you figure out what it will take to make your move a reality. Lindsey Young, a certified financial planner in Baltimore, says reviewing regular expenses, moving expenses and any costs you may face from temporary unemployment can help you understand where your money is going and plan where you want it to go.

Moving is expensive, and the LGBTQ+ community already tends to earn less than straight and cisgender workers on average, according to a Human Rights Campaign analysis of full-time LGBTQ+ workers and Bureau of Labor Statistics data. Transgender men and women, LGBTQ+ people of color and LGBTQ+ women face even more pronounced pay gaps and discrimination.

However, the LGBTQ+ community also has a rich history of supporting one another through mutual aid . So, check with your support network to see what’s available. Be aware that seeking help and support is normal, especially during challenging political moments.

2. Acquire cash on hand

Once you know how much money you need, consider how you might get it and create cash flow, says Young. For example, can you take on extra shifts at work? A second job? Can your chosen family or a GoFundMe make up the difference?

If you need to move but don’t have cash, says Young, consider what existing lines of credit you can access, such as a home equity line of credit, or HELOC , or credit card.

Also, consider whether you would want — or be able — to take on repaying new debt over the next several months or years. Are you more comfortable taking on debt to make a move happen, or would you prefer to tough it out where you are? Young says there is no correct answer, and it’s a matter of “understanding what their priorities are to really figure out what the right path forward is.”

3. Assemble your documents and back them up

Wherever you are, it’s always helpful to get your important documents together in one place. Make photocopies of anything important, such as medical records and personal IDs, and upload them to a safe cloud location so you can access them anywhere.

4. Specify your power of attorney

Officially designating who will make medical and financial decisions on your behalf is essential to putting someone you trust in charge if something happens to you. Make your will and choose your power of attorney so one isn’t chosen for you.

This step is crucial for anyone concerned that their biological family members (or the state) might try to challenge their wishes, even if they’re married. If your situation is complicated, finding an attorney who specializes in LGBTQ+ clients can help ensure that your wishes are followed despite any contentious family relationships you may have.

The risk of not planning can include that your wishes and loved ones aren’t honored, says Frank Summers, a certified financial planner in Charlotte, North Carolina. “I know of situations in which the estate of somebody who passed away went to a family member who did not approve of their relationship, who didn't like gay people and proceeded to make the life of the surviving partner extraordinarily difficult when that person is dealing with a tremendous and profound grief,” says Summers.

5. Connect to members of your community, old and new

Connecting to an LGBTQ+ organization or group in a new city might make you feel safer, as well as possibly open up connections to new jobs, health care providers and relationships.

As director of transgender services at The Center on Colfax in Denver, Sable Schultz has seen a significant uptick in people connecting to peer support group services in person and online as they prepare to move to Colorado. Considered a “refugee” state, Colorado has sheltered thousands of newcomers in 2024, and its Medicaid coverage includes gender-affirming services.

Summers sees particular groups of people impacted by legislation — trans and nonbinary people, people wanting to start families, people with children and people who require ongoing care. Needing to access care and not knowing if you’ll be able to get it (or, if you can get access, not knowing if you'll receive care with respect) can be overwhelming and scary, especially in a state like North Carolina that recently banned gender-affirming care and severely restricted abortion.

So wherever you’re headed, identify a support group, Queer Exchange, Facebook affinity group, or a social service provider that can connect you with housing, medical care, community or other support nearby.

6. Plan a safe travel route

If you’re getting on the road, consider how you can safely get from one place to another, including where you can use the restroom. Be sure to check in with local queer groups to identify where travelers have successfully stopped and stayed in the past.

If moving or traveling requires you to go through states targeting the LGBTQ+ community, particularly trans and nonbinary people, make a plan for how you can drive along large interstates and stop in larger towns and cities, or at least places that identify themselves as allies to the community.

What to do if you have to move and can’t prepare

Conversations about money aren’t usually related to an immediate life or death scenario, but for too many members of the LGBTQ+ community, that is the current reality. Safety is top of mind, especially given the ongoing rise in hate crimes.

Schultz describes Colorado as a refugee state because it mandates health care protections — including requiring gender-affirming care of Medicaid services — as well as general protections around gender identity and gender expression.

Other states where gender-affirming care is practiced include Alaska, California, Connecticut, Delaware, Hawaii, Illinois, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, Washington, Wisconsin, and Wyoming; and Washington, D.C.

If you’d feel safer in any of these states, it’s possible even a lack of financial planning shouldn’t keep you from making the move. For those who are currently unhoused or living out of their car, says Schultz, sometimes "it's at least safer to be unhoused here [in Colorado] than it would be to be wherever they were. And they can at least get the health care that they need."

There’s no shame in doing what you must to get to a safer place where you are valued and wanted. And if you’re an ally to the LGBTQ+ community, check in on your loved one. Consider what emotional, financial or other support you can offer them during this challenging time.

On a similar note...

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IMAGES

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COMMENTS

Topic no. 511, Business travel expenses
Topic no. 511, Business travel expenses. Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes. You're traveling away from home if your duties require you to be away from the general ...
How to Deduct Business Travel Expenses: Do's, Don'ts, Examples
To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn't your home. 2. You should be working regular hours. In general, that means eight hours a day of work-related activity. It's fine to take personal time in the evenings, and you can still take weekends off.
7 Rules You Should Know About Deducting Business Travel Expenses
Business travel expenses are entered on Schedule C if you're self-employed. The schedule is filed along with your Form 1040 tax return. It lists all your business income, then you can subtract the cost of your business travel and other business deductions you qualify for to arrive at your taxable income.
Tax Deductions for Business Travelers
You can deduct business travel expenses when you are away from both your home and the location of your main place of business (tax home). Deductible expenses include transportation, baggage fees, car rentals, taxis and shuttles, lodging, tips, and fees. You can also deduct 50% of either the actual cost of meals or the standard meal allowance ...
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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 ...
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There are two ways to deduct business travel expenses when you're using your own vehicle. Actual expenses method; Standard mileage rate method; Actual expenses is where you total up the actual cost associated with using your vehicle (gas, insurance, new tires, parking fees, parking tickets while visiting a client etc.) and multiply it by the ...
Deductions For Business Travel Expenses
If you travel away from home overnight on business, you can deduct these travel expenses: Airline, train, or bus fares — This includes first-class. Operation and maintenance of an automobile, like: Actual expenses or standard mileage rate. Business-related tolls and parking. You might rent a car while you're away from home on business.
Determining Tax Deductions for Travel Expenses
Step 1: Determine Your Trip Meets the Requirements of a Business Trip. A business trip for tax purposes is one that meets the following criteria: There must be a business purposes for the travel. You are required to be away from your tax home. The trip lasts overnight or a period long enough to require rest. The trip is temporary.
PDF THE COMPLETE GUIDE TO DEDUCTING BUSINESS TRAVEL EXPENSES
Can a taxpayer deduct expenses for business travel even if the trip includes personal activities? It depends. It is clear that taxpayers can deduct regular travel expenses when the trip is entirely business related. Additionally, if the taxpayer is on a domestic business trip and made personal side trips or stayed ...
Calculating Travel Expenses for Businesses
2. Pay with personal cards and submit expense claims. For many small to medium size businesses, this is the simpler option. Asking employees to pay business expenses from their personal account is pretty standard practice. Reimbursing expenses can be a time-consuming process for both Admin professionals and staff.
How to Deduct Business Travel Expenses
Deductions for Special Types of Travel . Conventions and Trade Shows: If you travel to a convention or trade show, you may need to show that the convention is directly related to or associated with your business.If you have a sales booth at the convention, that would qualify. If you are a delegate to a convention, the purpose of the convention must relate to your business.
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Here's a good policy for deducting travel expenses. 1. Determine how travel will be paid for. There are a few common ways to pay for travel expenses: Prepay: Pay for the hotel room (and maybe ...
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If traveling abroad, you must spend a minimum of 25% of your time conducting business to qualify as a business trip and claim travel expense deductions. If you conduct business for less than 25% of the time while on a trip, you can still deduct travel costs. This deduction must be proportional to the amount of time spent on business.
Here's what taxpayers need to know about business related travel
Business calls and communication. Tips paid for services related to any of these expenses. Other similar ordinary and necessary expenses related to the business travel. Self-employed or farmers with travel deductions. Those who are self-employed can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole ...
Can I deduct travel expenses?
If you're self-employed or own a business, you can deduct work-related travel expenses, including vehicles, airfare, lodging, and meals.The expenses must be ordinary and necessary. For vehicle expenses, you can choose between the standard mileage rate or the actual cost method where you track what you paid for gas and maintenance.. You can generally only claim 50% of the cost of your meals ...
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Business travel expenses are deductible if they are ordinary, necessary, and reasonable, and occur away from the taxpayer's regular place of business. Deductible expenses include transportation, lodging, meals (with limitations), and other travel-related costs. Proper documentation and adherence to IRS guidelines are essential, with specific ...
25 Small Business Tax Deductions- What's New for 2023
12. Business Travel Expenses. If you travel for business purposes, then the associated expenses can be deducted. This includes airfare, hotel stays, car rentals, and meals. Be sure to keep all receipts and documentation for your trips in case the IRS requests it. 13. Office Supplies Business Expense. Office supplies like paper, ink, and toner ...
36 Business Expense Categories for Small Businesses and Startups
Travel: Business-related travel expenses include flights, hotels and meals—but note that only 50% of the cost of meals for employees and customers is deductible. Costs for candidates who are traveling for an interview are deductible. Examples include parking fees and flights.
Special per diem rate for business travel rises
The special per diem rates by which taxpayers may substantiate ordinary and necessary business expenses of travel away from home will be higher starting Oct. 1, the IRS provided Monday in Notice 2023-68.. Generally, in lieu of actual lodging, meal, and incidental expenses incurred, a payer may consider substantiated, for federal tax purposes, an employee's expenses incurred for employment ...
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Every dollar counts in the business world, yet a significant amount often goes unchecked: travel and expense (T&E). T&E is a substantial category in business accounting that handles costs incurred by employees on the road or while entertaining clients.
Deducting Business Travel Expenses
There are numerous tax deductions available: medical expense, charitable, student loan interest, mortgage interest and more. One of the more complex and varied type is related to business travel deductions. Deducting business travel expenses is is particularly useful to taxpayers who own their own business, operate as a freelancer or contractor ...
Business Travel Reporting Starts With Expense Management
Managing business travel expenses doesn't have to be a complex and time-consuming task Thredd's Edwin Poot and Jonathan Vaux said.
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The organization of business travel can be a mammoth task, requiring complicated procedures and constant monitoring. The development of innovative software solutions that help manage and automate everything from booking flights and hotels as well as organizing expenses have become an invaluable resource for today's companies.. In a world of globalization, business travel is often a necessity ...
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Business travel insurance can provide financial protection for your next business trip by reimbursing you for a portion of the expenses you might incur if you had a medical emergency, travel delay ...
Travel Medical Insurance: Your Guide to Staying Protected on Trips
Travel insurance reimburses you for any unexpected medical expenses incurred while traveling. On domestic trips, travel medical insurance usually take a backseat to your health insurance.
April 2024 Travel, Expense, and Card Policy Updates
The Travel and Card team is happy to announce the following policy updates and changes: UW-3022, International Travel: To align with Universities of Wisconsin foreign/international travel policy, two new allowable expenses associated with international travel …
6 Strategies for LGBTQ+ Financial Prep to Move to a Safer Place
Learn more about how evaluating your expenses and assets, getting cash on hand, connecting with community and planning a safe route can help you change states if you feel unsafe where you are.