Lewes CPA
officeProgar & Company, P.A.
Certified Public Accounting services for businesses and individuals
Business travel away from home (MS Word)
Business travel away from home (.pdf)
Business travel away from home (within the U.S.)
Dear Reader:
The purpose of this letter is to advise you of the rules for
deducting the cost of your out-of-town business travel within the
U.S. These rules only apply if the business conducted out of town
reasonably requires an overnight stay.
The actual costs of travel (e.g., plane fare, cab to airport, etc.)
are deductible for out-of-town business trips. You are also allowed
to deduct the cost of meals and lodging. Your meals are deductible
even if they are “personal,” i.e., not connected with business,
although, as with all deductible meals, only 50% of the cost is
allowed (80% for long-haul truckers, certain airline, train and bus
employees, and certain merchant mariners). Additionally, no
deduction is allowed for meal or lodging expenses that are “lavish
or extravagant,” a term that has been interpreted to mean
“unreasonable.”
Personal entertainment costs on the trip aren't deductible, but
business-related costs such as for dry-cleaning, phone calls, and
computer rentals are.
Some allocations may be required if the trip is a combined
business/pleasure trip, for example, if you fly to a location for
five days of business meetings and stay on for an additional period
of vacation. Only the cost of meals, lodging, etc., for the business
days are deductible—not for the personal vacation days.
On the other hand, with respect to the cost of the travel itself
(plane fare, etc.), if the trip is “primarily” business, the travel
cost can be deducted in its entirety and no allocation is required.
Conversely, if the trip is primarily personal, none of the travel
costs are deductible. An important factor in determining if the trip
is primarily business or personal is the amount of time spent on
each, although this isn't the sole factor.
If the trip doesn't involve the actual conduct of business but is
for the purpose of attending a convention, seminar, etc., IRS checks
the nature of the meetings carefully to make sure they are not
vacations in disguise. Be careful to save all material helpful in
establishing the business or professional nature of this travel.
The rules on deducting the costs for your spouse if she accompanies
you on a business trip are very restrictive. No deduction is allowed
unless she's an employee of yours or your company and her travel is
also for a business purpose.
Finally, note that personal expenses you incur at home as a result
of taking the trip aren't deductible. For example, the cost of
boarding a pet while you're away isn't deductible.