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Deductible Business Travel Expenses Allowed by the IRS |

Figuring out which business travel expenses are tax-deductible according to IRS regulations can be tricky, especially if you are running on your own business and you don’t want to visit your accountant with every little question. What gets even trickier is trying to decipher whether travel expenses are deductible if you have combined a business trip with some leisure activities.

This article outlines the basic travel expenses that you can deduct as a legitimate business expense. But before diving in, I need to give you a definition, and that is the definition of a business day.

What Does the IRS Consider a Business Day?
Any of these qualify as a business day:

- a day on which you travel getting to and from your business destination
- a day when you spend at least 4 hours on business related activities
- a day when you have a pre-scheduled appointment

The first two are relatively simple to understand. Just be sure you have documentation to back up your travel, such as ticket stubs. On days when you are spending at least 4 hours on business activities, your activity log serves as documentation.

On days when you have a pre-scheduled appointment, you have to be able to prove that you actually attended the appointment. How do you prove it? If you met someone for a meal and picked up the tab, the receipt from the meal serves as proof. Otherwise, you’ll need to print out emails from before and after the trip to the person or people you met. The email from before your trips proves that the meeting was pre-scheduled. The email sent after the meeting (for instance, thanking them for meeting you) proves that you were at the meeting.

Tax-Deductible Business Travel Expenses
Now that we’ve gotten that definition taken care of, let’s get down to the list of items you can deduct from your business travel. The related IRS regulation or publication is listed after each category.

Business Meals
Half the cost of all your meals during actual business days can be deducted. This is true whether you met another person for a meal and picked up the tab, or you ate alone. (1.162-2(a))

This usually makes up a bulk of your business travel expenses. These expenses include rental cars, airline tickets, airport shuttles, taxis, and trains. (IRS Publication 463)

Any dry-cleaning or laundry expenses associated with clothes that you wore on the business part of the trip can be deducted as a legitimate travel expense. (Internal Revenue Ruling 63-145 and 1963-2 C.B. 86)

Any lodging costs, such as your hotel bill, are travel expenses that can be legally deducted. (IRS Publication 463)

Tips, Gratuities, Phone Calls
If you had to tip a cabbie, a porter, or a maid, then you can include these expenses as a part of your travel expenses. These should be associated with business days. Business related phone calls, whether local or long distance, may also be deducted. (1.162-2(a) and IRS Publication 463)

Does that sound simple enough? As always, remember that the devil is in the details, or in this case, the documentation. This article outlines all the legal business travel expenses you can deduct, but you really can only deduct these if they are properly documented. So deduct away as long as your document!

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