Traveling for business is a necessary—and sometimes fun—part of running a company. Whether you’re meeting with clients or suppliers, attending conferences, or scouting out new opportunities, these trips come with significant expenses. The good news? The IRS lets you deduct many of these costs.

But before you start tossing every receipt into the tax-deductible pile, it’s important to know the rules. Let’s break it down so you can make the most of your business travel deductions without getting into hot water with the Internal Revenue Service (IRS).

What Counts as a Business Trip?

A business trip isn’t just any getaway where you take a few work calls between sightseeing adventures. To qualify as a deductible business trip, your travel must be primarily for business purposes and take you away from your “tax home” (your regular place of business) for longer than a typical workday.

Here’s the key criteria for determining whether your business travel expenses are deductible:

The trip is ordinary and necessary for your business

All business expenses must be ordinary and necessary to be deductible. Ordinary expenses are common and accepted in your industry. Necessary expenses are helpful and appropriate for your business.

You have a clear business purpose

Meeting clients, attending trainings, or negotiating deals are good examples of trips with a clear business purpose. You need to be using the physical location. “Work from home” activities like client calls and emails does not count.

Your travel takes you away from your tax home long enough that you need to sleep or rest

If you drive two hours away for a business meeting and return home the same day, that doesn’t count as a business trip, so you can’t deduct business meals. However, if you drive two hours away, stay in a hotel overnight, and then have breakfast in the morning before a full day of client meetings, that counts as a business trip.

The majority of the trip is for business, not personal leisure

You can’t plan a family vacation, then schedule a business lunch during the trip and write the whole thing off. But you can add some sightseeing to a business trip. We’ll get to the rules for mixed-purpose trips later.

If your trip meets these requirements, congrats! You’re on your way to some valuable tax deductions.

What Travel Expenses Are Deductible?

When it comes to deducting travel expenses, the IRS is surprisingly generous—if you follow the rules. Here are some common business travel expenses you can write off:

Transportation Costs

• Airfare, train, or bus tickets to and from your destination
• Uber, Lyft, taxis, and public transportation to and from the airport or train station or at your destination
• Car rental costs, tolls, and parking fees
• Standard mileage deduction if you use your own vehicle for the trip (keep a mileage log!)

Lodging

• Hotel stays, Airbnb rentals, or other accommodations (within reason—penthouse suites probably won’t fly!)
• Business-use WiFi fees at your hotel

Meals and incidental expenses

• 50% of business meals are deductible, whether dining solo or entertaining a client
• Per diem rates (essentially a standard meal allowance) are an alternative option but require extra record-keeping
• Conference fees and event registration costs
• Tips for service providers like hotel staff, drivers, or baggage handlers
• Shipping costs for materials needed for a conference or client meeting
• Business calls, fax, computer rental fees, or internet access fees (if not already included in your lodging)

Special Rules for Foreign Travel Expenses

International business trips follow the same general guidelines but with one major difference: If your trip is primarily for business but includes some personal days, you may need to allocate expenses accordingly.

If the trip is less than one week long, and the majority of time is spent on business, then the entire transportation cost is deductible. However, if your trip is more than a week long and includes a mix of personal and business activities, you’ll need to prorate your expenses.

For example, say you’re in Paris for 10 days, and 7 of those days are work-related. You can deduct 70% of your airfare. Lodging and meals should also be allocated accordingly.

What About Trips That Are Part Business, Part Personal?

Ah, the classic work-play combo! If you mix business with pleasure, you’ll need to be extra careful about tracking expenses.

• Transportation costs (airfare, train, rental car) are fully deductible only if the trip’s primary purpose is business. If the main reason is personal (with a bit of business thrown in), you’re out of luck.
• Hotel and meal expenses are deductible only for the business portion of your trip. Those expenses are on you if you stay a few extra days for sightseeing.
• Excursions and entertainment that aren’t directly related to business (think: a Broadway show or a wine tour) are not deductible.

One more rule to remember when claiming business travel deductions: you can’t claim expenses for family members or other travel companions unless they’re part of your business.

For example, if your spouse accompanies you on a trip to New York City and they sight-see while you attend a work conference, their airfare, meals, and incidental expenses are not deductible. However, if your spouse is a partner in your business and attends the conference with you, their travel expenses are deductible.

The Secret to Air-Tight Travel Deductions: Documentation!

A tax deduction is only as good as the documentation backing it up. To comply with IRS rules (and ensure your business travel deductions can withstand scrutiny under a potential audit):

• Keep all receipts and invoices for travel-related expenses
• Maintain a travel log for business trips in your personal vehicle, noting business activities and meetings
• Record the purpose of each expense (i.e., “Lunch with potential supplier to discuss contract terms”)
• Use apps like Expensify or QuickBooks to track and categorize expenses in real-time

Claiming business travel expenses lets you have your cake and eat it too: you can see the world while claiming valuable tax deductions. But remember, the IRS tends to take a closer look at tax deduction categories prone to abuse, and travel and meal expenses are definitely on that list.

Don’t let that dissuade you from claiming legitimate business travel expenses. Just follow these guidelines, track your expenses, and keep airtight documentation of every deduction. When you know what’s deductible, you can confidently take advantage of business travel tax breaks.

Need help making sure you’re claiming every deduction you deserve? Contact NewWay Accounting.We’re here to help you navigate tax savings and keep your finances on track!