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IRS Announces Special Per Diem Rates for Travel Away From Home Beginning October 1, 2022

EBIA

September 29, 2022 · 5 minute read

IRS Notice 2022-44 (Sept. 26, 2022)

Available at https://www.irs.gov/pub/irs-drop/n-22-44.pdf

The IRS has announced the special per diem rates that can be used to substantiate the amount of business expenses incurred for travel away from home on or after October 1, 2022. Employers using these rates to set per diem allowances can treat certain categories of travel expenses as substantiated without requiring that employees prove the actual amount they spent. (Employees must still substantiate the time, place, and business purpose of their travel expenses.) The amount deemed substantiated will be the lesser of the allowance actually paid or the applicable per diem rate for the same set of expenses. This notice, which replaces IRS Notice 2021-52 (see our Checkpoint article ), announces rates for use under the optional high-low substantiation method, special rates for transportation industry employers, and the rate for taxpayers taking a deduction only for incidental expenses. General guidance issued in 2019 regarding the use of per diems after the Tax Cuts and Jobs Act remains in effect (see our Checkpoint article ).

For travel within the continental United States, the optional high-low method designates one per diem rate for all high-cost locations and another for all other locations. Employers can use the high-low method for substantiating lodging, meals, and incidental expenses, or for substantiating meal and incidental expenses only (M&IE). Beginning October 1, 2022, the high-low per diem rate that can be used for lodging, meals, and incidental expenses increases to $297 (from $296) for travel to high-cost locations and increases to $204 (from $202) for travel to other locations. The high-low M&IE rates remain at $74 for travel to high-cost locations and $64 for travel to other locations. Many locations have been added to the list of high-cost locations, one has been removed, and many that remain on the list are now considered high-cost for a different portion of the calendar year.

While self-employed persons cannot use the high-low method, they may use other per diem rates to compute the amount of their business expense deduction for business meals and incidental expenses (but not lodging), or for incidental expenses alone. (Employees can no longer deduct their unreimbursed expenses due to the suspension of miscellaneous itemized deductions by the Tax Cuts and Jobs Act, so these other rates are effectively unavailable to them.) The special rate for the incidental expenses deduction is unchanged at $5 per day.

EBIA Comment: The per diem rules can greatly simplify the process of substantiating business travel expense amounts. If the amount of an allowance is deemed substantiated because it does not exceed the applicable limit, any unspent amounts do not have to be taxed or returned. If an employer pays per diem allowances that exceed what is deemed substantiated, however, the employer must either treat the excess as taxable wages or require actual substantiation. If substantiation is required, any unsubstantiated portion of the allowance must be returned or treated as taxable wages. For more information, see EBIA’s Fringe Benefits manual at Section XXI.G (“Travel Expense Reimbursements: Substantiation”).

Contributing Editors: EBIA Staff.

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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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Hiring Remote Employees: Travel Reimbursement, Home Offices, and More

Many businesses have transformed since the COVID-19 pandemic. Organizations experiencing human resource constraints are getting more creative when it comes to retaining and recruiting employees—including a growing remote workforce. But hiring remote employees can create uncertainties for companies to navigate.

Remote Working Tax Implications

Explore these frequently asked questions related to remote working tax implications.

What’s the definition of tax home?
What are considerations for determining payroll reporting?
What’s the impact of remote employees on nexus?
Can internal revenue code (IRC) Section 139 still be used?
What are business considerations when hiring remote employees?
What are the options for providing home office equipment?
How can a company reimburse home office expenses?
How is commuting defined and applied to travel reimbursements?
Can employees working from home write off their office spaces?
How is the convenience of employer rule used to determine travel reimbursement?

Generally, an employee’s tax home is the regular place of business or post of duty, regardless of where they live. It includes the entire city or general area of a business or work location.

The IRS hasn’t published updated guidance following the COVID-19 pandemic. Thus, taxpayers should follow previous rules and guidance and apply them to their specific facts and circumstances.

It’s important for businesses to understand the definitions of both home and office in relation to flexible workforces for employees who can be:

100% remote
Working in the field

The remote workforce ushered in by the COVID-19 pandemic seems here to stay, resulting in the need to meet new payroll reporting requirements.

If a company has remote employees in a state where it hadn’t already registered, there will be certain thresholds being met that could call for registration in states where those employees are located.

If certain thresholds are met, such as the number of days worked in-state or amount of compensation, then the company needs to register for payroll reporting with those states. Note that the company may be required to complete other registrations with the state aside from just income tax withholding.

Employers will want to remind their employees of their individual tax reporting obligations. Given that employer withholding taxes are based on employee residence, employees need to understand the individual filing requirement in their own states as opposed to where the company is located—unless there’s reason to file in the state where the company is located.

An example reason for filing in the company’s state would be if the employee visits the office location in the other state and meets the states specific thresholds for personal income tax filing requirements, among other possible personal reasons for activity in that state.

When a company has a remote employee with out-of-state payroll, that typically creates nexus in that state for the company, unless a specific exception is met. When nexus is established, also known as physical presence, a company can create additional filing requirements for themselves, in addition to having to withhold income taxes on the employee’s wages.

A company is typically recognized as doing business in a state when any remote employee located there works for the company. This employee could establish nexus, possibly creating new income, franchise, and sales and use tax obligations.

IRC Section 139 deals with disaster relief payments from the employer that are generally tax free to the recipient. The COVID-19 pandemic was declared a disaster by the federal government and the covered period for expenses to qualify started March 13, 2020.

Section 139 disaster relief payments need to be reasonable, necessary, and the result of the declared disaster. Wages aren’t considered a Section 139 payment. IRC Section 139 can still be used related to the COVID-19 pandemic if the expenses meet the definition of a qualified payment under IRC Section 139.

If an organization is interested in providing disaster relief payments and other support to employees under Section 139 for other payment related to disaster relief (COVID-19 or otherwise), the organization could implement a policy for these types of payments.

When hiring remote employees, there are several business considerations that should be thought, both internally and externally. Below is a list of items to be considered.

Well documented working arrangements, such as through employment agreements
Additional administrative tasks of having remote employees
Payroll requirements and registrations with the states, such as state tax withholding and unemployment taxes
State nexus establishment and adding new footprints in new states

Internal Revenue Code (IRC) Section 162 permits employers to reimburse employees for legitimate job-related expenses deemed ordinary and necessary, such as a computer, monitors, printer, or internet service.

An employer has many options on how to structure home office reimbursement expenses, such as a stipend or reimbursement policy. What’s important is that it be made under an accountable plan , meaning, a set of procedures that ensures that employees don't get reimbursed for personal expenses.

An employer can reimburse employees for certain home office expenses through an accountable plan. As discussed above, the main factor for reimbursement is the IRC Section 162 standard of an ordinary and necessary business expense.

According to the IRS, ordinary and necessary expenses related to the COVID-19 pandemic can include a range of expenses related to remote work, health care, and childcare, such as:

Home office items, such as monitors, printers, phone, and office supplies
Cost to install new or expanded internet service
Cost of increased utilities

Would Reimbursement be Taxable or Nontaxable?

The accountable plan allows employees to receive tax-free money for expenses while the employer deducts the expense. An employer should be ready to substantiate the business connection and cost of the expense.

Transportation expenses between an employee’s home and the main place of work are considered commuting expenses.

Daily transportation expenses employees incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses, with some exceptions.

One can deduct daily transportation expenses incurred going between the residence and a temporary workstation outside the metropolitan area where they live.

Daily transportation expenses can be deducted if an employee has one or more regular work locations away from the residence or the residence is the principal place of business, and they incur expenses going between the residence and another work location in the same trade or business.

Travel expenses are the ordinary and necessary expenses for traveling away from the home for the job. Generally, a tax home refers to the entire city or general area of a main place of business or work, regardless of where a family home is.

The Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the miscellaneous deduction for home office expenses for tax years 2018–2025, making employees not eligible to claim the home office expense deduction.

Convenience of employer generally means that daily transportation expenses incurred by an employee between the primary residence and employer’s office are personal expenses.

These personal expenses aren’t eligible for either a deduction by an employer under section 162(a)(2) or tax-free reimbursement to an employee—unless they’re excluded as qualified transportation fringe benefits. This rule is subject to exceptions, however.

For example, if an employee’s residence is the principal place of business, within the meaning of IRC Section 280A, then the transportation costs between the home office and employer’s office may be deductible by the employer and eligible for tax-free reimbursement to the employee.

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.

Let a local tax expert matched to your unique situation get your taxes done 100% right with TurboTax Live Full Service . Your expert will uncover industry-specific deductions for more tax breaks and file your taxes for you. Backed by our Full Service Guarantee . You can also file taxes on your own with TurboTax Premium . We’ll search over 500 deductions and credits so you don’t miss a thing.

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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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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

Find Timothy On LinkedIn

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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Travel expense deductions 101.

The IRS defines Business Travel as traveling away from your tax home that is “substantially longer than an ordinary day’s work” and that requires you to rest or sleep away from home.

To deduct these expenses, you need to have slept away from home and your travel must be temporary (less than a year).

What Expenses Are Deductible While Traveling for Business?

When you are self-employed and traveling between your tax home and business destination you can deduct the cost of travel by train, bus or airplane.

Other business travel deduction includes:

Taxi, commuter bus, airport limousine : The costs of travel between the airport and hotel or to a business location can be deducted from your taxes.

Meals and lodging : The cost you spend on meals and lodging while you are away from home on a business can be submitted an actual expense or use per diem rates, as determined by the IRS.

Car/Truck : The IRS has a standard mileage allowance. If you use your car or truck for business travel within this allowance, you can deduct the cost of maintenance, operating, tolls and parking expenses from your taxes.

Shipping and baggage : The costs of delivering baggage or shipping business materials between your regular work location and tax home and temporary business location are deductible.

How Do You Document Travel Expenses?

Keep your receipts! It is the most important part of deducting travel expenses. You don’t need to have paper copies, but you should have more than just a line item on a credit card to show.

Your receipts should be a specific as possible and include:

Expense details
Amount spent
Business purpose

In this article, you will also learn about:

Can You Write off Flights for Work?

Can you write off tolls for work on taxes, can you write off mileage, can you write off hotel expenses for work.

The IRS states that travel by airplane between your home and your business destination can be a deduction for business travel. If you were provided an airline ticket or you’re riding free as a result of a frequent traveler or similar program, your cost is zero and you have nothing to deduct.

You can claim the price of a toll, if you incur that expense while traveling away from your tax home for a business-related reason. This is cost should not be associated with your regular commute to and from your regular place of business. You can write off your actual expenses for using car for business or you can use the Internal Revenue Service’s standard mileage rate, which was 54.5 cents per business mile for tax year 2018 and 53.5 cents per business mile as of the 2017 tax year.

Drives for business, medical reasons or in support of a charitable organization, you can deduct that mileage on your taxes.

As of January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

57.5 cents per mile for business miles driven
17 cents per mile driven for medical purposes
14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating a vehicle, and the rate for medical purposes is calculated with variable costs in mind.

You can only claim the deduction if you use your personal vehicle for your business, medical, or charitable purposes. If you use a vehicle that was purchased by a business, you cannot claim business mileage.

To claim your hotel stay as a deduction on your taxes, the IRS requires you to travel away from your “tax home” – the area where most of your work takes place.

The self-employed deduct these expenses on their Schedule C self-employment tax with Form 104. They frequently have higher travel deductions because there is no employing company to reimburse their expenses.

Make sure you save your receipts. Get a receipt from the hotel front desk and save any documentation you have explaining the business merit of your trip.

6 Common Miscellaneous Expenses Examples | Tax Deduction Tips for Small Businesses

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Deductions for Travel Away From Home

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).

I am the text that will be copied.

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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Who Qualifies for Work-From-Home Tax Deductions?

5 Min Read | Dec 21, 2023

Working from home has its perks. You can make the 20-step commute from your bedroom to your office in a little under four seconds. And pajamas are the new business casual wear.

But does working remotely have any tax advantages? What are work-from-home tax deductions or write-offs? We want you to get every deduction you deserve—so you’ll have more cash in your pocket to get out of debt, save for an emergency fund, and win with money. So let’s dig into the deets on work-from-home deductions.

Can I claim the home office tax deduction if I've been working remotely?

If your employer instituted work-from-home policies during the pandemic, you probably spent some time and money setting up a home office (the kitchen table just wasn’t going to cut it for a desk). And maybe you’ve continued working remotely some or all of the time.

Unfortunately, if you’re a salaried or hourly employee (the kind who receives a W-2 during tax season), you can’t take tax deductions for your home office . Bummer. (But grab some string cheese from the fridge next to your desk, and you’ll feel better before you know it.)

Self-Employed Independent Contractors

So who gets to take work-from-home tax deductions? Well, the IRS reserves them for self-employed independent contractors . In other words, if you work full time as a freelancer or have a side hustle that requires an office, you qualify to deduct a portion of your home’s expenses.

The IRS used to allow W-2 employees to deduct expenses related to working from home, but Congress changed that with its 2017 tax reform bill. A few very specific types of W-2 employees can still take the home office tax deduction, but we’ll talk about that in a minute.

Tax Deductions for Contractors

If you’re self-employed, you’ll probably end up receiving one or more 1099-NEC tax forms from the companies you worked for. A 1099 lists income you earned as an independent contractor so you can report it on your taxes. Don’t just toss those in a desk drawer. You’ll need them come tax time!

When you’re self-employed you often end up wearing lots of hats—accountant, HR rep, janitor. And since you don’t have an employer withholding taxes from your paycheck, it’s up to you to manage them yourself. That includes the self-employment tax , which is the full 15.3% of Social Security and Medicare taxes (an employer normally pays half of these taxes).

The best way to lower your tax bill is by claiming tax deductions . Here are 16 self-employment tax deductions to help you save money!

One of the bigger tax deductions you can take if you work from home as an independent contractor is the home office deduction. To take this deduction, you’ll need to figure out the percentage of your home used for business. Say your home office occupies 10% of your house. That mean you can deduct 10% of your utility bills (electricity, water and gas), mortgage payment or rent, property taxes, mortgage interest, homeowners insurance, repairs, and maintenance.

Home-Based Worker Exceptions

There are exceptions to every rule, right? So the small (and very specific) group of W-2 employees who can claim work-from-home tax deductions are Armed Forces reservists, certain performing artists, state or local government officials who are paid on a fee basis, people with physical or mental disabilities, and teachers. 1

If you fall into any of those groups, you’ll still need to jump through a couple of hoops before you actually get a deduction. (Yep, Uncle Sam loves to have you jump through hoops.)

Got small business tax questions? RamseyTrusted tax pros are an extension of your business.

First, the IRS only allows you to deduct expenses above 2% of your adjusted gross income. 2 So if your income is $50,000, your threshold to begin claiming expenses is $1,000.

Reaching the threshold for expenses doesn’t sound super difficult, but the second hoop is the real deal breaker. To claim expenses, you’ll need to itemize deductions . Since most W-2 employees get a lower tax bill by taking the standard deduction instead of itemizing, you’re probably just going to be out of luck if you want to claim expenses.

How to Claim Work-From-Home Tax Deductions

If you’re still reading, that must mean you’re self-employed and can claim work-from-home tax deductions. If that’s the case, you’re going to have to fill out a Schedule C . This form lists profit or loss from business, and it’s where you can deduct all of your business expenses. Hopefully your deductions will add up to a nice little chunk of change!

Get Some Help With Your Taxes

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But hey, if you feel like you need someone to guide you through all those forms and schedules, ask an Endorsed Local Provider (ELP) for help with your taxes. They’re RamseyTrusted and can help you file your taxes with confidence. Find a tax pro today !

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23 Common Tax Deductions for Small-Business Owners

We don’t have to convince you that taxes are complicated—especially for small-business owners. But the good news is that there are plenty of small-business tax deductions available to make tax season a little less painful!

What Is a 1099-NEC?

If you’re self-employed, you’ll receive a 1099-NEC listing the income you earned as an independent contractor. Don’t toss them out. You’ll need them to file your taxes. Take a look to learn more.

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%.

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🌐 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.

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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

Over 1M freelancers trust Keeper with their taxes

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Everything You Need to Know About the Business Travel Tax Deduction

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What tax write-offs can I claim?

At Keeper, we’re on a mission to help people overcome the complexity of taxes. We’ve provided this information for educational purposes, and it does not constitute tax, legal, or accounting advice. If you would like a tax expert to clarify it for you, feel free to sign up for Keeper. You may also email [email protected] with your questions.

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Small Business Trends

10 tax deductions for travel expenses (2023 tax year).

Tax season can be stressful, especially if you’re unaware of the tax deductions available to you. If you’ve traveled for work throughout the year, there are a number of deductions for travel expenses that can help reduce your taxable income in 2024 and save you money.

Read on for 10 tax deductions for travel expenses in the 2023 tax year.

Are business travel expenses tax deductible?

Business travel expenses incurred while away from your home and principal place of business are tax deductible. These expenses may include transportation costs, baggage fees, car rentals, taxis, shuttles, lodging, tips, and fees.

It is important to keep receipts and records of the actual expenses for tax purposes and deduct the actual cost.

What kinds of travel expenses are tax deductible?

To deduct business travel expenses, they must meet certain criteria set by the IRS.

The following are the primary requirements that a travel expense must meet in order to be eligible for a tax deduction:

Ordinary and necessary expenses: The expense must be common and accepted in the trade or business and be helpful and appropriate for the business.
Directly related to trade or business: The expense must be directly related to the trade or business and not of a personal nature.
Away from home overnight: The expense must have been incurred while away from both the taxpayer’s home and the location of their main place of business (tax home) overnight.
Proper documentation: The taxpayer must keep proper documentation, such as receipts and records, of the expenses incurred.

Eligible Business Travel Tax Deductions

Business travel expenses can quickly add up. Fortunately, many of these expenses are tax deductible for businesses and business owners.

Here is an overview of the types of business travel expenses that are eligible for tax deductions in the United States:

Accommodation Expenses

Accommodation expenses can be claimed as tax deductions on business trips. This includes lodging at hotels, rental costs of vacation homes, and other lodgings while traveling.

Meal Expenses

Food and beverage expenses incurred on a business trip may be deducted from taxes. This includes meals while traveling and meals during meetings with clients or contractors.

Transportation Expenses

Deducting business travel expenses incurred while on a business trip may also be claimed.

This includes flights, train tickets, car rentals, gas for personal vehicles used for the business trip, toll fees, parking fees, taxi rides to and from the airport or train station, and more.

Expenses of operating and maintaining a car

Expenses of operating and maintaining a car used for business travel may also be claimed as tax deductions.

This includes fuel, insurance, registration costs, actual costs of repairs, and maintenance fees. Fees paid to hire a chauffeur or driver may also be deducted.

Operating and maintaining house-trailers

Operating and maintaining house trailers for business travel may be eligible for tax deductions, provided that the use of such trailers is considered “ordinary” and “necessary” for your business.

This includes any costs associated with renting or owning a trailer, such as fuel costs, repair and maintenance fees, insurance, and registration charges.

Internet and phone expenses

Internet and phone expenses associated with business travel can also be claimed as tax deductions. This includes the cost of any internet service, such as Wi-Fi or data plans, and phone services, such as roaming charges or international calls.

Any communication devices purchased for business use, such as smartphones and laptops, may also be eligible for tax deductions.

Computer rental fees

Rental fees for computers and other computing devices used during business travel may also be deducted from taxes. This includes any applicable charges for purchasing, leasing, or renting a computer, as well as the related costs of connecting to the Internet and other digital services.

All such expenses must be necessary for the success of the business trip in order to qualify for a tax deduction.

Travel supplies

Travel supplies, such as suitcases and other bags, are also eligible for tax deductions when used for business travel. Any costs associated with keeping the items protected, such as locks and tracking devices, can also be claimed as tax deductions.

Other necessary supplies, such as office equipment or reference materials, may also be eligible for deductions.

Conference fees and events

Conference fees and events related to business travel may also be eligible for tax deductions. This includes fees associated with attending a conference, such as registration, accommodation, and meals.

Any costs related to the organization of business events, such as venue hire and catering, may also be claimed as tax deductions.

Cleaning and laundry expenses

Business travel expenses associated with cleaning and laundry may also be claimed as tax deductions. This includes a portion of the cost of hotel and motel services, such as cleaning fees charged for laundering clothing, as well as any other reasonable expenses related to keeping clean clothes while traveling away from home.

Ineligible Travel Expenses Deductions

When it comes to business expenses and taxes, not all travel expenses are created equal. Some expenses are considered “Ineligible Travel Expenses Deductions” and cannot be claimed as deductions on your income taxes.

Here is a list of common travel expenses that cannot be deducted, with a brief explanation of each:

Personal Vacations: Expenses incurred during a personal vacation are not deductible, even if you conduct some business while on the trip. In addition, expenses related to personal pleasure or recreation activities are also not eligible for deductions.
Gifts: Gifts purchased for business reasons during travel are not deductible, even if the gifts are intended to benefit the business in some way.
Commuting: The cost of commuting between your home and regular place of business is not considered a deductible expense.
Meals: Meals consumed while traveling on business can only be partially deducted, with certain limits on the amount.
Lodging: The cost of lodging is a deductible expense, but only if it is deemed reasonable and necessary for the business trip.
Entertainment: Entertainment expenses, such as tickets to a show or sporting event, are not deductible, even if they are associated with a business trip.

How to Deduct Travel Expenses

To deduct travel expenses from income taxes, the expenses must be considered ordinary and necessary for the operation of the business. This means the expenses must be common and accepted business activities in your industry, and they must be helpful, appropriate, and for business purposes.

In order to claim travel expenses as a deduction, they must be itemized on Form 2106 for employees or Schedule C for self-employed individuals.

How much can you deduct for travel expenses?

While on a business trip, the full cost of transportation to your destination, whether it’s by plane, train, or bus, is eligible for deduction.

Similarly, if you rent a car for transportation to and around your destination, the cost of the rental is also deductible. For food expenses incurred during a business trip, only 50% of the cost is eligible for a write-off.

How do you prove your tax deductions for travel expenses?

To prove your tax deductions for travel expenses, you should maintain accurate records such as receipts, invoices, and any other supporting documentation that shows the amount and purpose of the expenses.

Some of the documentation you may need to provide include receipts for transportation, lodging, and meals, a detailed itinerary or schedule of the trip, an explanation of the bona fide business purpose of the trip, or proof of payment for all expenses.

What are the penalties for deducting a disallowed business expense?

Deducting a disallowed business expense can result in accuracy-related penalties of 20% of the underpayment, interest charges, re-assessment of the tax return, and in severe cases, fines and imprisonment for tax fraud. To avoid these penalties, it’s important to understand expense deduction rules and keep accurate records.

Can you deduct travel expenses when you bring family or friends on a business trip?

It is not usually possible to deduct the expenses of taking family or friends on a business trip. However, if these individuals provided value to the company, it may be possible. It’s advisable to speak with an accountant or financial expert before claiming any deductions related to bringing family and friends on a business trip.

Can you deduct business-related expenses incurred while on vacation?

Expenses incurred while on a personal vacation are not deductible, even if some business is conducted during the trip. To be eligible for a deduction, the primary purpose of the trip must be for business and the expenses must be directly related to conducting that business.

Can you claim a travel expenses tax deduction for employees?

Employers can deduct employee travel expenses if they are ordinary, necessary, and adequately documented. The expenses must also be reported as taxable income on the employee’s W-2.

What are the limits on deducting the cost of meals during business travel?

The IRS permits a 50% deduction of meal and hotel expenses for business travelers that are reasonable and not lavish. If no meal expenses are incurred, $5.00 daily can be deducted for incidental expenses. The federal meals and incidental expense per diem rate is what determines the standard meal allowance.

What is a Tax Home, and How Does it Impact Travel Expenses?

Written by Liz Farr, CPA

Modified Aug 8, 2019

Today’s super-mobile workforce means that you may have clients who are splitting their time between multiple work locations. In these situations, understanding the concept of a tax home will help clarify the treatment of travel expenses.

What is a Tax Home?

The IRS defines a tax home as the city or general area where someone’s main place of business or work is located. If your client travels away from their tax home for work purposes, their travel expenses may be deductible.

“May be deductible” has taken on new meaning since the Tax Cuts and Jobs Act was passed in late 2017. Under prior law, employees could deduct unreimbursed work expenses, including travel expenses, as a miscellaneous itemized deduction. However, from 2018 though 2025, that deduction has been suspended, except for Armed Forces reservists, qualified performing artists, and fee-basis state or local government officials.

The best bet for employees who no longer qualify to deduct their travel expenses is to set up an accountable plan with their employer. Reimbursed travel expenses under an accountable plan are not taxable to the employee, while reimbursements under a non-accountable plan are included in the employee’s wages.

However, self-employed individuals can still deduct expenses for travel away from their tax home as business expenses.

A tax home may or may not be the same place as the family home, or a place that your client returns to regularly. For clients who work in more than one place, their tax home is their main place of business or work. This is determined by considering the following factors:

The total time spent in each place.
The level of business or work activity in each place.
The relative amount of income earned in each place.

Expenses for work-related travel away from someone’s tax home are deductible or can be reimbursed tax-free under an accountable plan. Travel expenses include transportation, meals, lodging, laundry and dry cleaning, and incidentals.

For example, Ryan is a self-employed consultant living in Denver. He spends one week of every month working onsite for a client in Salt Lake City. Ryan spends the remaining three weeks of the month working with clients in the Denver area. Ryan’s tax home is Denver, so his travel, lodging and meal expenses for his monthly trips to Salt Lake City are deductible.

Over time, Ryan’s client in Salt Lake City becomes a bigger part of his work. Eventually, Ryan is spending all of his working time in Salt Lake City and flying home to Denver on the weekends. Now, his tax home is Salt Lake City, and neither his living expenses in Salt Lake City nor his plane fare between Denver and Salt Lake City are deductible.

What About Temporary Work Assignments?

It’s not unusual for an employee to be sent to work in a different location. If that assignment is temporary and the employee maintains a home in the original location, the tax home is still the original location. Travel expenses will be deductible for a contractor. Employee reimbursements under an accountable plan will be tax-free.

But, if the assignment is permanent or indefinite, then the person’s tax home is the new location, so travel expenses are not deductible. Accountable plan reimbursements are now taxable to the employee.

The IRS defines “temporary” as a work assignment that’s expected to last a year or less. If a work assignment that started out as a temporary posting is extended to more than a year, then it becomes an indefinite assignment when the anticipated duration changes.

For example, Kimberly has been working for a company in Boston and is sent to Los Angeles for an eight-month project. Kimberly’s tax home is still Boston. Her employer reimburses her for her travel, lodging and meals under an accountable plan, and those reimbursements are tax-free.

However, seven months into the project, Kimberly’s employer decides to extend her posting in Los Angeles for another eight months, to a total of 15 months. At that point, Kimberly’s assignment becomes indefinite, so her tax home changes to Los Angeles. If her employer continues to reimburse her for living expenses, even if it’s done under an accountable plan, those reimbursements are now taxable.

This only scratches the surface of the tangled web that results when people live and work in multiple locations. Depending on the states involved, your clients may also have state tax issues. IRS Publication 463 , Travel, Gift, and Car Expenses , is a good resource, so be sure to check it out if you have clients in this situation.

Editor’s note: This article was published on the Firm of the Future blog .

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Liz spent 15 years working as an accountant with a focus on tax work as well as working on audits, business valuation, and litigation support. Since 2018, she’s been a full-time freelance writer, and has written blog posts, case studies, white papers, web content, and books for accountants and bookkeepers around the world. Her current specialty is ghostwriting for thought leaders in accounting. More from Liz Farr, CPA

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Overnight travel expenses

Deductions for travel expenses you incur when you travel and stay away from home overnight for work.

Last updated 13 December 2023

For a summary of this content in poster format, see Travel expenses (PDF, 705KB) This link will download a file This link will download a file .

Eligibility to claim travel

You can claim a deduction for travel expenses (accommodation, meals and incidental expenses) if you travel and stay away from your home overnight in the course of performing your employment duties.

You can't claim travel expenses if you don't stay away from your home overnight.

You are travelling overnight for work in the course of performing your employment duties if:

there is no change to your regular place of work (the usual or normal place where you start and finish your work duties for your employer)
you're away from home for short periods of time
you stay in short-term accommodation such as a hotel.

For example, you would be travelling and staying overnight for work if you need to travel interstate for a number of days to meet with clients.

An employee travelling away from their home overnight for work usually isn't, or can't be, accompanied by family or have family or friends visit them.

You won't be travelling away from home overnight for work if:

because of your personal circumstances, you live a long way from where you work
you're living at a location where you are working
you choose to sleep at or near your workplace rather than returning home.

Expenses you incur in these circumstances are not deductible because you incur them to start earning employment income. They are private expenses.

Example: not away from home overnight

Mal lives in Hobart and works for an engineering firm.

On occasion, Mal flies to Melbourne for meetings with clients. When Mal's work requires him to attend these meetings, he catches an early flight to Melbourne and returns to Hobart on the same day.

Mal's employer pays him an allowance to cover the cost of his food and drink while he is in Melbourne. The allowance amount is shown on his income statement at the end of the income year.

Mal must include the allowance he receives as income in his tax return.

Mal can't claim a deduction for the amount he spends on food and drink when he travels to Melbourne. Mal is not travelling overnight in the course of performing his employment duties and the expenses are private.

Travel expenses you can claim

Travel expenses you can claim include:

accommodation expenses – for example, the cost of staying in a hotel, motel, serviced apartment, caravan, or a property booked through a digital platform
meals (food and drink) expenses
incidental expenses that are minor but necessary expenses associated with your work-related travel – for example, a car parking fee, bus ticket or a charge for using the phone or internet for work-related purposes at your overnight accommodation
transport expenses to get to and from the location you are travelling to overnight for work – for example, the cost of flights.

If your travel is for both work and private purposes, you can only claim the expenses that are for work purposes. You'll need to apportion your travel expenses .

You generally need to keep records such as receipts or other written evidence for your travel expenses.

You claim your deduction for these expenses at Work-related travel expenses in your tax return.

Example: deductible travel expenses for work-related trip

Beth is an executive in a large banking company. She travels from her regular workplace in Melbourne to Sydney for a 3-day meeting with clients.

Beth pays for her flights between Melbourne and Sydney, her hotel and all of her meals while she is in Sydney. She also incurs some incidental expenses, including taxi fares from her hotel to the offices of her clients. Beth has receipts for all of these expenses and her employer doesn't reimburse her.

Beth's regular place of work remains her workplace in Melbourne, she is in Sydney for a short period of time and she stays in a hotel. Therefore Beth is travelling away from her home overnight in the course of performing her employment duties. She can claim a deduction for the cost of her flights, accommodation, meals and incidental expenses.

In rare circumstances you may be able to claim expenses for accommodation that you rent or buy to stay in when you travel away from home temporarily to perform your work. These expenses:

must be proportionate to what you would have paid for suitable commercial accommodation for the period of travel
must be apportioned if the property is also used for private purposes
cannot be incurred because of a choice you made to maintain your residence in a different location to your place of employment.

Before making a claim for this type of accommodation, check the rules in TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses travel allowances, and living-away-from-home allowances .

Travel expenses you can't claim

You can't claim travel expenses if:

you sleep in accommodation your employer provides
you eat meals your employer provides
your employer or a third party reimburses you for any costs
due to your personal circumstances, you live a long way from where you work
you choose to sleep at or near your workplace rather than returning to your home between your work shifts.

Example: living a long way from work – travel expenses not deductible

Craig lives in Brisbane with his family. He accepts a job on a long-term project in Sydney. His employment contract indicates that his place of work is the office on the project site in Sydney.

As Craig lives in Brisbane and doesn't need to be physically on site all the time, he has an informal agreement with his employer to work from home whenever he is not required on site. When it is necessary for Craig to be on site, he is generally there for no longer than 2 weeks at a time. As Craig's regular place of work is in Sydney, his employer does not cover the cost of his flights to Sydney or his accommodation, meals and incidental expenses when Craig stays near the site.

Craig can't claim a deduction for the accommodation, meals and incidental expenses he incurs when he travels and stays in Sydney to work at the project site. Craig incurs the expenses as a consequence of his personal circumstances, that is, it is his decision to live in Brisbane and work in Sydney. The expenses are private expenses.

Craig can't claim the cost of his flights between Brisbane and Sydney for the same reasons.

Example: choosing to sleep near workplace – travel expenses not deductible

Max and Doris have retired from full-time work and spend their time travelling around Australia. They use their caravan as accommodation while they are travelling. When Max and Doris need some extra money, they work as fruit pickers for a couple of weeks at a time.

During the income year, Max and Doris spend 42 weeks travelling around Australia and 10 weeks working at different farms.

Max and Doris can't claim a deduction for the decline in value of their caravan or for any amounts they spend on meals, caravan park rental and incidentals during the 10-week period they spent working. The caravan isn't used for a taxable purpose (for the purpose of gaining or producing their assessable income) and the meals, caravan park rental and incidental expenses are private in nature.

Example: reimbursed travel expenses not deductible

Omar is a sales manager. Under the terms of his employment agreement, Omar is based in his employer's Perth office. He is also responsible for the offices in Albany and Broome.

When Omar travels to the Albany and Broome offices for meetings and staff performance appraisals he is away overnight. His employer books and pays for his flights and his accommodation when he travels. Omar uses his employer's credit card to pay for meals and incidental expenses when he travels.

Although Omar is travelling away from his home overnight for work, he can't claim a deduction for his flights, accommodation, meals or incidental expenses. This is because his employer pays for all of these expenses directly.

Living at a location

If you are living at a location where you are working, you can't claim accommodation, meals or incidental expenses for being at that location.

You will generally be living at a location if all the following are true:

there is a change in your regular place of work
the overall period you are away from your home is relatively long
you stay in longer term or settled accommodation, such as a unit or house.

An employee living at a location usually is, or can be, accompanied by family or have family and friends visit them.

Example: living at a location – travel expenses not deductible

Maria works at her employer's office in Adelaide. She lives close to the office with her family. Maria's employer is setting up a new office in Perth and assigns Maria to the Perth office for 6 months to help set it up.

During the period she is in Perth, Maria lives in a 2-bedroom unit close to the new office, which would be big enough to accommodate her family if they travelled to Perth with her. Maria's family remain in the family home in Adelaide rather than join her in Perth.

Maria is living in Perth for the 6-month period rather than travelling to Perth because:

she is staying away from her home for a relatively long period
she is staying in longer term accommodation
her regular place of work has become the Perth office.

The expenses Maria incurs for her accommodation and meals while she is working in Perth are private expenses. They are not deductible.

Even if Maria travelled home each weekend, she would still be living in Perth for the 6-month period.

Apportioning travel expenses

If your expenses are for both work and a private purpose, you can only claim the work-related expenses.

For example, you need to apportion your travel expenses if:

you add a holiday to the end of work-related travel
family or friends travel and stay with you when you travel overnight for work
you attend a work-related activity while you happen to be on holiday.

If the private part of your travel is incidental to your travel away from your home overnight on a work trip, you may not be required to apportion your costs.

Example: travelling with a partner or family member

Juan is an employee accountant in Adelaide. His employer requires him to travel to Melbourne for a week to visit clients and attend a number of meetings in the Melbourne office. Juan's partner and 2 small children go with him so they can have a holiday in Melbourne while Juan is working. To accommodate his family, Juan books a 2-bedroom apartment.

As Juan is travelling overnight for work purposes, he can claim a deduction for the cost of his accommodation and meals. However, Juan can only claim a deduction for the amount the accommodation and meals would cost if he was travelling alone. For example, Juan would incur the cost of a 1-bedroom apartment when travelling alone.

The cost of accommodation and meals for Juan's family while they are on holiday in Melbourne is private. He can't claim that part of the cost as a deduction.

Example: travel to another destination from a work location

Nitin travels from Melbourne to Perth for a 5-day work conference and adds on a return trip to Broome for 2 days for private purposes.

Nitin can claim a deduction for his flights to and from Perth and the accommodation, meals and incidental expenses that he incurs during the 5 days he spends at the work conference in Perth.

Nitin can't claim a deduction for the cost of travelling between Perth and Broome or for any of his accommodation, meals or incidental expenses while he is in Broome. These expenses are private.

Example: combined personal and work-related trip to same destination

Andrea is in the process of booking a holiday to Sydney to see an art exhibit when her employer asks her if she would attend a 3-day work-related conference. The conference coincidently is to be held from the Monday following the holiday Andrea is planning.

Andrea changes her travel arrangements to include the additional time in Sydney. In total, she spends 3 days in Sydney for private purposes, then an additional 3 days at the conference.

Andrea must apportion the cost of her flights for the private part of her trip (50%). Andrea can only claim the accommodation, meals and incidental expenses she incurs while attending the 3-day work-related conference.

Example: personal travel incidental to work-related travel

Norma is an employee architect. She travels to an 8-day work conference in Hawaii on trends in modern architecture. One day of the conference involves a sight-seeing tour of the island, and a game of golf is held on the final afternoon of the conference.

Norma can claim the cost of her flights to Hawaii and her accommodation, meals and incidental expenses as a deduction. The private activities, the island tour and golf game are incidental to the main purpose of her travel, which is the work conference.

Example: attending work-related events during personal travel

Pablo is holidaying in Cairns when he becomes aware of a work-related seminar which runs for half a day. Pablo pays the seminar fee and attends.

Pablo can claim the cost of attending the seminar. Pablo can't claim his airfares to and from Cairns or accommodation and meals while in Cairns, as the primary purpose of the travel is private.

This Is How Much Stay-at-Home Parents Could Be Saving

A s a young mother, I wanted nothing more than to be home with my boys. I knew I would want a career one day, but while the children were young, I wanted to be there. Some of my friends felt differently. They couldn't imagine being with their kids all day or postponing their careers to stay home and change diapers -- and that's fine. All of our children grew up to be awesome human beings.

There are challenges to being a stay-at-home parent. They include having to get by on one income, having less money to save and invest , and occasionally, a sense that the world is passing you by.

There's also an upside associated with being a stay-at-home parent (SAHP), including the opportunity to save money. Although they won't have as much money coming into their checking account , here's how much a household with two small children can save.

Child care: $33,384 annual savings

The average weekly cost of daycare in the U.S. is $321. Let's say both children are in daycare. By having one parent at home to look after the kids, the family would save $33,384 annually.

Work attire: $638 annual savings

The average American spends $161 per month on clothing. If a person works in a professional setting, it may be more, but let's use the $161 average. $161 monthly equals $1,932 spent annually on clothing. Naturally, the SAHP won't want to walk around showing all their bits and pieces, so they'll still need to buy clothes. There's no need to traumatize the FedEx delivery person.

What if they cut their clothing budget by a third? That would lead to an annual savings of $638. Comparison shopping and using cash back apps could help the household save even more.

Morning drink: $520 annual savings

Despite stories to the contrary, Drive Research found that only 8% of Americans stop by a coffee shop daily on their way to work. New parents are among the frequent flyers, with 67% of them saying you're sure to find them at a coffee shop once a week and 49% admitting they spend money in a coffee shop more than once a week.

For the sake of this illustration, let's say a parent with a young child (or children) spends $5 a week at a coffee shop, but switches to making their own brew once they become a stay-at-home parent. That's a savings of $520 annually.

Convenience meals: $1,800 annual savings

Let's face it: We're more likely to hit our favorite dining spot or order delivery when we're tired from a long day at work. While it's certainly not the case every day, ideally, a parent who stays at home will have more time (and perhaps energy) to prepare home-cooked meals.

The average American family spends about $300 per month eating out. That's a whopping $3,600 annually. Since mom or dad has more time to cook, let's imagine that they eat away from home half as often. That would give them an extra $1,800 to put in a high-yield savings account or help offset the SAHP's loss of salary.

Transportation costs: $1,023 annual savings

According to the Institute for Transportation & Development Policy (ITDP), the amount of money spent on transportation in the U.S. is typically higher than that of other industrialized countries, mostly because Americans are more dependent on their cars than on public transportation.

As of 2023, car owners spent an average of $12,295 each year on their vehicles. Of that, $3,100 is spent on gasoline (or other fuels) and motor oil. We can't assume that a SAHP will give up driving, but it's safe to say that they may not be driving as far as they once did, especially if their previous job found them spending a great deal of time behind the wheel.

Even if a stay-at-home parent cuts their driving expenses by one-third, that's a savings of approximately $1,023 per year. I say "approximately," because less time on the road also means less wear and tear on the car and less frequent vehicle maintenance.

Income taxes: Depends on several factors

How much a household with a SAHP can save on income taxes depends on several factors, including how much the couple earned when they both worked and how much their annual income decreased after one parent left the job.

Let's say that when both parents worked, they had an adjusted gross income of $127,700. The couple files their taxes jointly and doesn't itemize their tax deductions. Instead, in 2023, they took the standard deduction for married couples of $27,700. Once the standard deduction was subtracted from their income, the couple was left with $100,000 of taxable income, putting them in the 22% tax bracket.

Again, for the sake of illustration, we'll say that the parent who chose to stay home with the children earned $40,000 annually. That means that the household income fell from $127,700 to $87,700. Once the couple takes the standard deduction, they're left with a taxable income of $60,000, putting them in the 12% tax bracket.

Their income dropped, but so did their tax burden.

I know that your personal finance situation is unique. You may have one child at home or five. And unlike this scenario, the SAHP may have once been the primary breadwinner. Still, the family described above would save a total of $37,365 annually, plus the amount their income taxes are reduced by.

There are strong feelings on both sides of the SAHP debate, but ultimately, you must do what's best for you and your family. As long as you're happy and can make ends meet, you're doing pretty well.

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy .

This Is How Much Stay-at-Home Parents Could Be Saving

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 ...
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Travel Expenses
Per IRS Publication 463 Travel, Gift, and Car Expenses, page 3: To determine whether you are traveling away from home, you must first determine the location of your tax home. Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area ...
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Travel Expense Deductions 101
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Deductions for Travel Away From Home. A taxpayer may be able to deduct travel, meals and lodging while away from home on business. Unlike tax deductions for travel and lodging away from home, meals are limited to 50%. This can include personal meals where business is not discussed. Other items may also be deducted, depending on the circumstances.
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PDF 2022-2023 Special Per Diem Rates
purposes of computing the amount allowable as a deduction for travel away from home, this notice is effective for meal and incidental expenses or for incidental expenses only paid or incurred on or after October 1, 2022. See sections 4.06 and 5.04 of Rev. Proc. 2019-48 (or successor) for transition rules for the last 3 months of calendar year 2022.
Overnight travel expenses
Eligibility to claim travel. You can claim a deduction for travel expenses (accommodation, meals and incidental expenses) if you travel and stay away from your home overnight in the course of performing your employment duties. You can't claim travel expenses if you don't stay away from your home overnight. You are travelling overnight for work ...
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Travel You Can't Deduct — Some types of travel don' t qualify for a tax deduction. For example, you can't deduct your costs if a significant part of the trip involves recreation or vacation. For more on these rules, see . Publication 526, Charitable Contributions. You can get it on IRS.gov/forms at any time. Date: June 1, 2017

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Determining Tax Deductions for Travel Expenses + List of Deductions

Bottom Line

Key Takeaways

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

Business Purpose

Overnight Stay

Temporary Travel

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

Round-trip Transportation To-and-From the Destination

Transportation at the Destination

Incidentals

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

Primarily Business Domestic Trips

Primarily Personal Domestic Trips

Business Foreign Trips

Frequently Asked Questions (FAQs)

Can I deduct travel expenses for my employees?

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

About the Author

Tim Yoder, Ph.D., CPA

Join Fit Small Business

Resources for Your Growing Business

What Expenses Are Deductible While Traveling for Business?

How Do You Document Travel Expenses?

Can You Write off Flights for Work?

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Deductions for Travel Away From Home

How to Deduct Travel Expenses (with Examples)

The travel needs to qualify as a “business trip”

The rules are different when you travel outside the United States

List of travel expenses

Meals and entertainment during your stay

Meals and entertainment while you travel

Bringing friends & family on a business trip

Driving to your destination

Renting a place to stay

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

If your business travel is with your own vehicle

The cost of breaking the rules

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