If you travel for work, and you are employed by someone other than yourself, it may be more beneficial to have your employer reimburse any costs you incur while traveling than to try to deduct them at tax time.
Deductible expenses occur when you are away on a work related trip outside of your main area of business. These expenses include:
- Lodging expenses such as hotel or motel costs
- Half of the amount you spend on meals and entertainment (for business purposes)
- Transportation services at the destination (local shuttles, taxis, etc.)
- The overall cost of getting back and forth from your trip.
The IRS defines a business trip as any travel away from your main area of businesses and you intend to stay away from your “Tax home” for a significant amount of time. If you are away long enough that you will require sleep in order to do your job, the trip may qualify as business related travel.
If you travel from one job to another, or you meet clients within your regular area of business, the travel does not qualify for business deductions. Instead, the IRs classifies these costs as transportation expenses.
If your travel expenses are not necessary and ordinary but instead seem extravagant, you likely won’t be able to deduct the cost of your travel. All expenses must be reasonable in order to qualify.