Travel expenses are the ordinary and necessary expenses that you
pay while traveling away from home on business. Employees deduct these
expenses on Schedule A (Form 1040).
You are traveling away from home if your duties require you to be
away from your tax home for a period substantially longer than an ordinary
day's work and you need to get sleep or rest to meet the demands of your
work.
Generally, your tax home is the entire city or general area where
your main place of business is located, regardless of where you maintain
your family residence. For example, you live with your family in Chicago
but work in Milwaukee where you stay in a hotel and eat in restaurants.
You return to Chicago every weekend. You may not deduct any of your travel,
meals, or lodging in Milwaukee because that is your tax home. Your travel
on weekends to your family home in Chicago is not for business reasons,
so these expenses are also not deductible. If you regularly work in two
or more areas, your tax home is the general area where your main place
of business or work is located.
You may not deduct expenses that are lavish or extravagant or that
are for personal or vacation purposes. Also, you may not deduct travel
expenses at a temporary work location if it is expected that you will work
there for more than one year.
Some deductible travel expenses include:
- Air, rail, and bus fares,
- The cost of operating and maintaining your car,
- Taxi fares or other costs of transportation between the airport
or train station and your hotel, from one customer to another, or from
one place of business to another,
- Meals and lodging; and
- Tips that are incidental to any of these expenses.
Meal expenses are deductible only if your trip is overnight or long
enough that you need to stop for sleep or rest to properly perform your
duties. The deduction for business meals is generally limited to 50% of
the cost.
Instead of keeping records of your meal expenses and deducting the
actual cost, you can generally deduct a standard meal allowance ranging
from $30 (for most areas in the United States) to $42 depending on where
and when you travel.
You may also deduct travel expenses, including meals and lodging,
you had in looking for a new job in your present trade or business. You
may not deduct these expenses if you had them while looking for work in
a new trade or business or while looking for work for the first time. If
you are unemployed and there is a substantial break between the time of
your past work and your looking for new work, you may not deduct these
expenses, even if the new work is in the same trade or business as your
previous work.
Travel expenses for conventions and seminars are not deductible,
unless you can show that your attendance benefits your trade or business.
If you are an employee, your allowable travel expenses are figured
on Form 2106 or 2106-EZ.
Unreimbursed expenses are carried from Form 2106 or 2106-EZ to Schedule
A, Form l040, subject to a limit based on 2% of adjusted gross income.
Select Topic 508 for information on the 2% limit.
If you do not itemize your deductions, you cannot deduct these expenses.
If you are self-employed, travel expenses are deductible on Schedule C,
C-EZ, or F, Form 1040.
Good records are essential. Select Topic 305
for information on record keeping.
For more information on travel expenses, see Publication
463, Travel, Entertainment, Gift and Car Expenses. Publications
can be downloaded from this site,
or ordered by calling 1-800-829-3676.
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