Excerpted from an article by Ryan Smith on Bench.com
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
Travel
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.
Lodging
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 workdays.
Here’s a sample itinerary to explain how this works:
Thursday: Fly to Durham, NC.
Friday: Meet with clients.
Saturday Night: 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.
Read more: https://bench.co/blog/tax-tips/travel-expenses-deductible/