Article Posted on 12/30/2019
We often receive questions related to the deductibility of business travel expenses. Here are a few rules about which travel expenses are deductible in different situations.
- For a trip that is purely business, the travel costs are fully deductible. This includes airfare, cab fares, etc.
- Provided that your meals are not considered lavish or extravagant, under current tax law 50% of the cost of the meals is deductible. The 50% deduction for meals while traveling away from home applies even if the meal is not directly connected to a business function.
- At times, your travel may be a combination of business travel and a personal vacation. Only the meals and lodging expenses for the days that are business days are deductible. Meals and lodging on the personal days are not deductible.
- Even if a portion of the trip is personal in nature, if the trip is primarily for business (this requirement is typically met when there is more business time than there is personal time), then generally the cost of the travel itself (such as airfare) is fully deductible.
The deduction of travel expenses is an area that is scrutinized by the IRS. Documentation of the business purpose of the trip is very important.