How to write off travel expenses 

If you or your team travel for work, knowing how to write off travel expenses can save your business significant tax savings at the end of the year.

However, it’s important to note that you’ve got to play by the IRS rules.

That means understanding what counts as a deductible travel expense, what doesn’t, and how to track everything properly. 

Whether you’re a small business owner, an accountant, or a travel expense manager at a larger company, this guide will walk you through what qualifies as a business trip, which travel expenses are tax deductible, and how to stay compliant while maximizing your deductions. 

What qualifies as a business trip? 

Before gathering receipts and claiming deductions, it’s crucial to understand what the IRS considers a legitimate business trip.

Simply booking a getaway and labeling it as a “conference” does not meet the requirements. 

Here are the key criteria a trip must meet to qualify: 

• You must travel away from your tax home. Your tax home is your primary business place, which may differ from where you live. 
• The trip’s main purpose must be business-related. While personal activities can be part of the trip, they must be incidental—not the focus. 
• The trip must extend beyond a regular workday, typically requiring an overnight stay. 

If your trip meets these conditions, you’re likely eligible to deduct related expenses.

However, documentation is essential. Keep a detailed travel log that includes: 

• The dates of your trip. 

• Locations visited. 

• The business purpose (e.g., client meetings, industry conferences, training). 

• Names and roles of individuals you met with, along with the reason for the meeting. 

What doesn’t count as a business trip? 

Certain types of travel may not qualify, even if some business activities are involved.

For example: 

• A trip taken primarily for personal reasons, with only incidental business activity. 
• Travel that doesn’t involve being away from your tax home for more than a standard workday. 
• Commuting between your home and regular workplace, which is never deductible. 
• Expenses that are not ordinary and necessary—for instance, luxury upgrades or recreational activities that don’t directly relate to your business. 
• Travel costs for companions, such as family members or friends who join you on the trip but are not employees or directly involved in the business purpose.

When in doubt, focus on the trip’s primary purpose and make sure your documentation supports a business intent. 

Ordinary and necessary expenses 

Once you’ve confirmed that your trip qualifies as a business expense, the next step is determining which specific costs you can deduct.

The IRS allows deductions for two key types of expenses as mentioned above: ordinary and necessary.  

• Ordinary expenses are those that are common and widely accepted within your industry.  
• Necessary expenses are those that are helpful and appropriate for your business operations. 

For instance, if you’re traveling out of state to attend an industry conference, your airfare and hotel stay would typically be considered both ordinary and necessary.

However, opting for a first-class flight or booking a luxury resort may be harder to justify—especially if such choices are uncommon for businesses of your size or industry. 

How much of business travel is tax deductible? 

Business travel costs can be a valuable way to reduce your taxable income when handled correctly. Most qualified expenses are fully or partially deductible under IRS guidelines. 

What travel expenses are tax deductible? 

Here’s a quick breakdown of typical business travel deductions: 

• Transportation: 100% deductible. 
• Lodging: 100% deductible when the stay is exclusively for business. 
• Meals: 50% deductible if business-related and properly documented. 
• Entertainment: generally not deductible, due to changes introduced by the Tax Cuts and Jobs Act. 
• Event registration fees: 100% deductible if the event is directly related to your trade or business (e.g. conferences, seminars, trade shows). 
• Equipment rentals: 100% deductible when used for a business purporse during the trip (e.g., renting a projector for a presentation or AV equipment for a conference booth). 

Understanding what qualifies—and what doesn’t—can help you stay compliant while maximizing your deductions. 

Mixed-purpose trips: How to handle blended travel 

When a trip combines both business and personal activities—like attending a conference and then extending your stay for vacation—you’ll need to prorate your deductions.

The IRS only allows you to write off expenses that are directly related to the business portion of your trip. 

Here’s how to break it down: 

• Transportation: if the primary purpose of the trip is business, your round-trip airfare is typically fully deductible—even if you add a few personal days. 
• Lodging: you can only deduct the nights spent on business-related activities. 
• Meals: apply the 50% deduction rule only to meals on business days. 
• Personal activities: sightseeing, entertainment, and other leisure expenses aren’t deductible. 

Special considerations during holiday travel 

Holiday trips require extra attention when it comes to deductions: 

Business during personal travel

If you’re on a holiday trip but conduct legitimate business—like meeting with a client or attending a work event—you can deduct expenses tied to those specific activities.

However, vacation-related costs remain personal and non-deductible. 

Traveling with family or friends

You cannot deduct expenses for anyone who isn’t involved in the business purpose of the trip.

That means your spouse, kids, or friends’ airfare, meals, and lodging are on your dime.

That said, shared costs—like a rental car needed for business—can still be deducted, even if others ride along.

Travel expenses examples 

Still wondering what travel expenses are deductible? Here’s a closer look at common examples: 

Transportation

• Airfare: round-trip flights to and from your business destination 
• Train or bus tickets: any commercial travel used specifically for business. 
• Car rentals: deductible if the vehicle is used exclusively for business purposes during the trip. 
• Personal vehicle use: you can deduct mileage using the IRS standard mileage rate or claim actual expenses like gas, maintenance, and insurance. 
• Tolls and parking fees: fully deductible when incurred during business-related travel.  

Lodging 

Is lodging tax deductible? Absolutely—hotel, motel, or Airbnb stays are generally 100% deductible if the accommodation is exclusively for business.

However, it’s important to avoid luxury accommodations that exceed what’s considered reasonable for your industry. 

Meals 

Are meals while traveling deductible?

Yes—business-related meals are 50% tax deductible when they meet IRS requirements.

This includes meals with clients or meals purchased during business trips.

To qualify, keep receipts and record the business purpose for each expense. 

Incidental expenses

• Tips: for hotel staff, porters, bellhops, and others providing business-related services. 
• Dry cleaning or laundry: deductible if you’re away for multiple days and must maintain professional attire. 
• Business communications: charges for business-related phone calls or Wi-Fi access while on the road. 

Declaring travel expenses in your tax return 

Once you’ve tracked and categorized your travel expenses, the next step is reporting them accurately on your tax return.

The process varies depending on your business structure: 

For sole proprietors and single-member LLCs 

Report travel expenses on Schedule C (Form 1040) under the following lines: 

• Line 24a: travel (includes transportation, lodging, and other related costs). 
• Line 24b: meals (remember, only 50% of eligible business meals are deductible). 

Using tax software can help you easily categorize each expense during the input process—streamlining tax preparation and reducing the chance of errors. 

For C corporations, S corporations, and partnerships

• C corporations: report travel expenses on Form 1120. 
• S corporations: use Form 1120S. 
• Partnerships: use Form 1065. 

In all cases, it’s essential to maintain detailed records, properly categorize each expense, and retain supporting documentation.

Accurate reporting ensures compliance with IRS regulations and maximizes your allowable deductions. 

Best practices for managing travel expenses 

The key to effectively managing and legally deducting travel expenses is organization.

Here are some best practices to keep your records accurate and audit-ready: 

• Keep a detailed travel log: record each trip’s dates, destinations, and specific business purposes. 
• Save all receipts: especially for lodging and meals. Digital copies are acceptable as long as they are clear and legible. 
• Use expense-tracking software: expense management tools make it easy to log, categorize, and store travel expenses in real time. 
• Travel during the workweek: midweek travel is more likely to be considered business-related than weekend trips. 
• Bundle meetings: group client visits, conferences, or training sessions together to strengthen the business justification for the trip. 
• Review IRS Publication 463 annually: this publication outlines the most current IRS guidelines on deductible travel, meals, and entertainment expenses. 

How to calculate business travel expenses 

Depending on the nature of your trip, you’ll need to approach expense calculations differently. Below are the two most common scenarios and how to handle each one: 

1. Business trip without personal days 

This is the most straightforward scenario, where the entire trip is dedicated to business purposes. 

Imagine you attend a three-day industry conference in Chicago, and all activities are work-related.  

Expenses:

• Round-trip airfare: $400 
• Hotel (3 nights): $600 ($200 per night) 
• Meals: $180 
• Taxi to/from airport and venue: $100 

Calculation:

• Transportation: $400 (airfare) + $100 (taxi) = $500 
• Lodging: $600 
• Meals: $180 × 50% = $90 

Formula:

Travel Deduction = transportation + lodging + business expenses + (meals ÷ 2) 

Total deductible travel expense = $500 + $600 + $90 = $1,190 

2. Business trip including personal days 

If your travel includes both business and personal components—such as attending a conference followed by a weekend stay—you’ll need to prorate your deductions based on the business portion.  

For instance, imagine you attend a four-day training session in New York (Monday to Thursday) and extend your stay for personal travel over the weekend (Friday to Sunday). 

Expenses:

• Round-trip airfare: $500 
• Hotel (6 nights total): $1,200 ($200 per night) 
• Meals: $300 
• Subway/taxi for business days: $80 
• Broadway show ticket (personal): $120 

Calculation:

• Airfare: $500 (deductible, since business is the primary purpose) 
• Lodging for business nights (Mon–Thu): 4 × $200 = $800 
• Meals during business days: estimated $200 × 50% = $100 
• Business transportation: $80 
• Personal expenses (Fri–Sun lodging and entertainment): not deductible 

Formula: 

Travel deduction = transportation for business days + lodging for business nights + business expenses + (meals for business days ÷ 2) 

Total deductible travel expense = $500 + $800 + $100 + $80 = $1,480 

Final thoughts on travel expenses 

Learning how to write off travel expenses doesn’t have to be overwhelming.

By understanding what qualifies as a business trip, identifying which expenses are deductible, and maintaining detailed records, you can confidently claim legitimate tax savings—without worrying about compliance issues. 

Digital tools can make the process even smoother. With features like intuitive expense tracking, smart categorization, and easy-to-generate financial reports, they help you manage travel costs efficiently while ensuring you stay IRS-compliant. 

Ready to simplify your travel expense management?

Explore Sage time and expense management software today and take the hassle out of tracking, reporting, and maximizing your travel deductions.