As the summer travel season is almost upon us, a portion of your summer travel may be tax-deductible. If your travel is primarily for business or for career-related education, then a portion of the trip may be tax-deductible. As long as most of your travel days are for business purposes, you can deduct the cost of travel (airfare, trains, car), hotel, parking, taxi service, meals, etc. – Travel expenses.

As defined by the IRS, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. An ordinary expense is one that is common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary.

The key factor is that your trip must be primarily for business. Days of leisure can be added to a trip and still be considered primarily for business. The more days and time per day spent on business will help substantiate the trip. There are no set rules on the days and time needed.

Keep all of your documentation on the business purposes, including confirmations of appointments, emails, phone records, registration to conferences, etc. The days to travel to and from a business trip are considered part of the trip. This includes weekend if it is impractical to come home between weekday business meetings. Planning ahead can make this happen.

Traveling With Your Spouse
If a spouse goes with you on a business trip or to a business convention, his or her travel expenses can only be deducted if your spouse is
1. Your employee,
2. Has a bona fide business purpose for the travel, and
3. Would otherwise be allowed to deduct the travel expenses.

To be an employee, your spouse must be on the payroll and payroll taxes must be paid. If your spouse is not an employee and travels with you as a vacation, you can still deduct the cost of your room at the single occupancy per day rate, rather than half of the rate. Meals could also be deductible, if you are paying for lunch or dinner for a customer or business associate and that person’s spouse, the full cost of the meals might qualify under the 50% meal deduction.

With travel outside of the United States, the transportation for business trips of one week or less, may be deducted. However, only a portion of transportation costs for longer trips are deductible.

What Expenses are Deductible?

Here’s what you can deduct when you travel away from home for business.

Transportation Expenses

You can deduct Transportation Expenses when you travel by airplane, train, bus, or car between your home and your business destination. If you were provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. If you travel by ship, additional rules and limits apply.

Taxi, Commuter Bus, Subway, and Airport Limousine Fares

You can deduct the fares for these and other types of transportation that take you between:

1. The airport or station and your hotel, and
2. The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location.

Baggage and Shipping Expenses

You can deduct the cost of sending baggage and sample or display material between your regular and temporary work locations.

Car Expenses

You can deduct the cost of operating and maintaining your car when traveling away from home on business. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking. If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses.

Lodging and Meals

You can deduct your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Meals include amounts spent for food, beverages, taxes, and related tips. Additional rules and limits may apply.

Cleaning Clothes

You can deduct the dry cleaning and laundry expenses you incur while away on business.

Telephone Expense

All business calls while on your business trip are deductible. This includes business communication by fax machine, or other communication devices.

Tips

You may deduct the tips you pay for any expense listed above.

Other Expenses

You can deduct other similar ordinary and necessary expenses related to your business travel. These expenses might include transportation to or from a business meal, public stenographer’s fees, computer rental fees, or Internet access fees.

Please contact SS&C if you have any questions.