Business Travel Deductions: What Qualifies, Documentation Requirements, and Common Mistakes

Business travel deduction rules:

What is deductible:

• Airfare, train, or bus tickets (business class or coach, not first class unless the taxpayer normally flies first class)
• Rental car or personal vehicle mileage (at the business mileage rate) between business destinations
• Lodging (hotel, Airbnb) for business nights
• Meals while traveling: 50% of the cost (must be away from tax home overnight)
• Baggage fees, tips, laundry, and dry cleaning while traveling
• Business phone calls and internet while traveling
• Conference registration fees

What isn’t deductible:

• Commuting from home to the regular place of business (never deductible, regardless of distance)
• Travel that’s primarily personal with some business activities
• Spouse’s travel expenses (unless the spouse is an employee of the business with a bona fide business purpose for the trip)
• Lavish or extravagant expenses (the IRS does not define “lavish,” but costs far exceeding the business purpose may be challenged)

Mixed business/personal trips (domestic):

• If the primary purpose of the trip is business, transportation (airfare) is fully deductible
• Only expenses on business days are deductible (lodging, meals, local transportation)
• Personal days create nondeductible expenses
• Weekends between business days are treated as business days (if it would be impractical to return home)

International travel:

• If the trip is primarily business (more than 75% business days): transportation is fully deductible
• If less than 75% business: transportation is allocated between business and personal days
• Meals and lodging are always allocated (only business days are deductible)