What your clients need to know about business-related travel deductions

Business travel can be costly. Hotel bills, airfare or train tickets, cab fare, public transportation—it can all add up fast. The good news for your clients is that business travelers may be able offset some of those cost by claiming business travel deductions when they file their taxes.

Here are some details about these valuable deductions that all business travels should know.

Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. The travel period must be substantially longer than an ordinary day’s work, and a need for sleep or rest to meet the demands the work while away.

Travel expenses must be ordinary and necessary. They can’t be lavish, extravagant, or for personal purposes.

Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year.

Travel expenses for conventions are deductible if attendance benefits the business; there are special rules for conventions held outside North America.

Deductible travel expenses while away from home include the costs of:

• Travel by airplane, train, bus or car between your home and your business destination.
• Fares for taxis or other types of transportation between an airport or train station to a hotel, or from a hotel to a work location.
• Shipping of baggage and sample or display material between regular and temporary work locations.
• Using a personally owned car for business which can include an increase in mileage rates.
• Lodging and non-entertainment-related meals.
• Dry cleaning and laundry.
• Business calls and communication.
• Tips paid for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to the business travel.

Self-employed or farmers with travel deductions:

• Those who are self-employed can deduct travel expenses on Schedule C, Form 1040, Profit or Loss From Business, Sole Proprietorship.
• Farmers can use Schedule F, Form 1040, Profit or Loss From Farming.

Travel deductions for the National Guard or military reserves: Service members can claim a deduction for unreimbursed travel expenses paid during the performance of their duty.

Recordkeeping: Well-organized records make it easier to prepare a tax return. Keep records, such as receipts, canceled checks, and other documents that support a deduction.

More information:

• Publication 463, Travel, Gift, and Car Expenses
• IRS updates per diem guidance for business travelers and their employers