How to write off travel expenses: A complete guide to accounting & business travel

Many small business owners have to travel a few times a year or even as often as every week. Unfortunately, the cost of transport, lodgings, and meals adds up. However, you can reduce these costs by writing them off as business expenses by learning about IRS deductible travel expenses.

Learning how to write off travel expenses can save your business thousands of dollars each year. They also empower owners to network, visit clients, and attend valuable workshops. Finally, knowing which deductions are eligible for a write-off can save you a lot of stress at tax time. This travel expenses tax deduction guide overviews which expenses are deductible, how to deduct them, and how to calculate them.

Jump to:

• What qualifies as a business trip for tax deductions?
• Which travel expenses are tax deductible?
• What travel expenses are not tax deductible?
• How to write off travel expenses on your taxes
• How to calculate business travel expenses
• Navigating car-related travel deductions
• Example business vacations you could write off
• Things to consider when writing off travel expenses for holiday travel
• Understanding disallowed business expenses
• Find peace of mind come tax time

What qualifies as a business trip for tax deductions?

The IRS allows tax deductions on certain travel expenses when the trip's primary purpose directly relates to your business. Since the line between business and non-business travel is hard to draw, you can take a few steps to ensure your trips' overhead costs qualify.

Here's a breakdown of the key requirements:

• You must be away from your tax home. Your tax home is the general area where your primary place of business is located. You need to travel outside of this area for your trip to be considered deductible.
• Your trip must have a primary business purpose. The majority of your time should be spent on business activities, even if you include some personal time.
• You must travel for longer than a usual day's work. This typically means an overnight stay is required for your trip to qualify.

Ordinary vs. necessary expenses

In addition to meeting the requirements above, the IRS stipulates that your deductible travel expenses must be ordinary and necessary.

• Ordinary expenses are those that are common and accepted in your industry. This includes transportation (airfare, train tickets, mileage), lodging (hotels, rentals), and meals with clients or business associates.
• Necessary expenses are those that are helpful and appropriate for your business. While "necessary" doesn't mean "essential," the expense should have a clear connection to your business activities.

To ensure your travel expenses qualify for deductions, it's important to plan your trip with a clear business purpose in mind and avoid excessive or extravagant spending.

Which travel expenses are tax deductible?

Understanding business tax deductions is easier with a list of example write-offs. While most expenses outside your tax home qualify for deductions, here are the most common travel expenses that are tax deductible: 

• Transportation: This includes airfare, train tickets, bus fare, rental car costs, and even mileage for your personal vehicle if you drive. Don't forget to include expenses like parking fees, tolls, and baggage fees.
• Lodging: You can deduct the cost of your hotel room, Airbnb rental, or other lodging expenses while on a business trip.
• Meals: You can deduct 50% of the cost of meals while traveling for business. This includes meals with clients and colleagues or even meals you eat alone while away from home.
• Event registration: If you attend conferences, workshops, or other business-related events, the registration fees are deductible.
• Equipment rentals: If you need to rent equipment for your business trip, such as a computer, projector, or other tools, these rental costs are deductible.
• Miscellaneous business expenses: This category covers various expenses, such as tips, laundry, phone calls, internet access, or shipping costs. 

What travel expenses are not tax deductible?

It's equally important to be aware of expenses that are not deductible. These include:

• Family travel and lodging costs: If you bring family members on a business trip, you cannot deduct their travel or lodging expenses.
• Entertainment: According to the IRS, expenses for entertainment, such as sporting events or concerts, are not deductible, even if related to business activities.
• Unnecessary or unreasonable expenses: The IRS scrutinizes expenses that are lavish, extravagant, or not typical for your industry.

Understanding these guidelines can help you maximize your deductions and ensure you only claim legitimate business expenses.

How to write off travel expenses on your taxes

Even if you go on a trip for business purposes, incorrectly filing your tax deductions could stand in the way of a write-off. To ensure the IRS covers every expense, plan your write-offs before leaving and hold onto your receipts once you get home. The main steps to follow include: 

1. Confirm your eligibility

Before you can bank on a write-off, you must ensure a trip is eligible for business deductions. The IRS uses rigid criteria to weigh business expenses, so make sure your write-offs meet all the standards. 

The eligibility criteria for a business trip tax deduction include: 

• Booking at least one business-related appointment before you leave. You need to establish a "prior set business purpose" and keep copies of your correspondence and scheduled appointments.
• Primarily using it for business purposes. The IRS won’t deduct 100% of your transportation costs unless the trip is primarily for business and lasts longer than an ordinary day’s work. 
• Being longer than an ordinary day’s work. You can’t write off expenses from a day trip. If your trip involves an overnight stay, then the travel qualifies for a deduction. This applies even if you intersperse your trip with personal days.
• Excluding companions from expenses. You can only deduct expenses typically incurred on a solo business trip. You can only deduct the cost of your plane ticket if you travel by air, and your family will have to purchase their own. However, if you drive with friends, you can write off all the transport fees.
• Traveling within the United States. The above rules only apply to travel within the United States. If you plan to travel to another country, the IRS has stricter standards when allowing for deductions. 

Additionally, you can write off lodging, taxis, car rentals, and 50% of your food costs on business days. You can also deduct laundry, dry cleaning, personal grooming, and other “ordinary and reasonable” expenses for the trip. 

Likewise, only 50% of your food costs are deductible, along with your portion of the lodging. So, if you usually rent a single hotel room but need a double and another room for the family, you can only deduct the cost of a single room. If you make a layover in another city for personal reasons, you cannot deduct those related travel expenses.

2. Make sure expenses are ordinary and necessary

When deducting travel expenses, you’ll want to ensure that every cost you claim is directly related to your business activities and meets the IRS's "ordinary and necessary" criteria. This means the expenses should be typical for your industry and necessary for conducting business. 

To determine whether your expenses fall into this category, consider the following questions:

• Would this expense be considered reasonable by others in your industry?
• Is this expense common for similar business trips or activities?
• Is this expense essential for conducting business, or is it more for personal convenience or pleasure?
• Could you have achieved the same business outcome with a less expensive alternative?

Carefully considering these questions and applying sound judgment will help you ensure that your travel expense deductions are legitimate and won't raise any red flags during a tax audit. 

The IRS expects business owners to be prudent with their spending and avoid deducting excessive or extravagant expenses related to their business needs.

3. Save all receipts from a trip

Track all expenses by holding onto every receipt from your trip. While not every expense will earn a write-off, it’s worth checking in with a tax professional before throwing any away. Over time, small write-offs and unexpected deductions can add up to huge savings. 

While the IRS does not require receipts for some expenses under $75, it's generally best practice to keep receipts for all expenses, regardless of the amount. This helps substantiate your deductions in case of an audit. 

Always maintain a detailed log with the date, time, amount, and business purpose of each expense. To streamline the process, you can use QuickBooks expense tracking software.

4. Itemize your expenses

Once you narrow down the receipts eligible for a deduction, organize them into different categories. 

Here's a step-by-step approach to itemizing your expenses: 

• Gather all receipts: Collect all receipts, invoices, and other documentation related to your business travel expenses. 
• Categorize your expenses: Create a system for organizing your receipts. You can use physical folders, digital files, or a spreadsheet to categorize your expenses. 
• Record key details: For each expense, record the date, amount, payment method, and a brief description of the business purpose. This will help you remember the context of each expense and justify it if needed.

Use this free meal and travel expense log to keep track of all your expenses as you travel. Make a copy of the spreadsheet and input your expenses using the fields provided (these are the same fields the IRS will ask for when you go to deduct the cost). 

Please note this is an estimation tool and should not be taken as financial or tax advice. Always refer to IRS guidelines for the latest updates. 

5. File your write-off correctly

Accurately filing your travel expenses is crucial when it comes to claiming your deductions and avoiding issues with the IRS. Here's a breakdown of how to file your travel expenses based on your filing status:

Self-employed individuals

If you're self-employed, you'll report your business travel expenses on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship).

• Line 24a: You'll typically enter your total travel expenses here.
• Supporting documentation: Keep detailed records of all your travel expenses, including receipts and a logbook summarizing your trips.

Businesses (partnerships, LLCs, corporations)

Businesses can write off any deductible travel expenses that they reimburse their employees for.

• Employees: If you're an employee who incurs business travel expenses, most employees no longer qualify to claim deductions on Form 2106. Instead, you should request reimbursement from your employer who can deduct those travel expenses on the business tax return. Certain individuals are still eligible to claim deductions on Form 2106. Please check the IRS website for details.
• Self-employed with employees: If you're self-employed and also have employees who incur business travel expenses, you can deduct any travel expenses that you reimburse your employees for. You will deduct these expenses either on your business tax return or on Schedule C of your Form 1040.

While there’s no annual travel deduction limit, the IRS scrutinizes higher write-offs. Be sure to calculate your business expenses with a tax attorney before submitting a large filing. 

How to calculate business travel expenses 

To calculate the estimated travel deductions, you can use one of the following formulas. When tallying write-offs, be careful about what you consider a business expense. While baggage fees, laundry costs, and workshop admission all count, you shouldn’t include personal expenses like souvenirs. 

Business trip with no personal days

This formula applies to business trips that involve no personal days. The entire trip consists of travel and business purposes. 

Travel deduction = Transportation + Lodging + Business expenses + (Meals / 2) 

Business trip with personal days in the middle

This formula applies to business trips with vacation time sandwiched between business days. As long as you spend more time on business than leisure, you can include transport and lodging costs in your deductions.

Travel deduction = Transportation on business days + Lodging + Business expenses + (Meals on business days / 2)

Other trips involving business

This formula applies to trips that are mostly for business with vacation days at the beginning or end or personal vacations with at least one business day. You cannot deduct any fees from personal days, so you will end up spending much more on lodgings and transport. 

Travel deduction = Transportation on business days + Lodging on business days + Business expenses + (Meals on business days / 2)

Navigating car-related travel deductions

When it comes to business travel, your car can be one of your most significant expenses. The IRS offers different ways to deduct these costs, and it's essential to know the specific rules for each.

Depreciation and the standard mileage rate

If you choose the standard mileage rate to deduct your car expenses, you're not just writing off fuel and maintenance; you're also taking an allowance for the vehicle's depreciation. The standard mileage rate for business use in 2025 is 70 cents per mile, a 3-cent increase from the 2024 rate.

The IRS also builds a set depreciation rate into the standard mileage rate each year. This matters because when you eventually sell or trade in your car, you'll need to calculate your gain or loss. 

To do this, you must reduce your car's cost by the total depreciation you've claimed over the years. The IRS requires you to use the set depreciation rate for every year you used the standard mileage rate, which prevents you from claiming the same expense twice.

Deprecation rates per mile

• 2025: $0.33
• 2024: $0.30
• 2023: $0.28
• 2022: $0.26
• 2021: $0.26
• 2020: $0.27
• 2019: $0.26

To use this data, you would multiply the depreciation rate per mile by the number of business miles you drove in a given year to determine the amount of depreciation to subtract from your car's original cost when you sell it. 

What are the special rules for car leases?

If you lease a car for your business, you can deduct the business portion of your lease payments. However, you may also have to include an amount in your income called a lease inclusion amount. This rule applies if the fair market value of your leased car at the start of the lease was above a certain threshold.

The purpose of the inclusion amount is to prevent taxpayers from getting a larger deduction for leasing a car than they would get for depreciating the same vehicle if they had purchased it. The specific inclusion amount varies widely—consult the IRS website for the most up-to-date information based on the value of your car.

Example business vacations you could write off

If your business requires you to travel, you could be missing deductions that can shrink your taxable income and grow your bottom line. While travel expenses must be business-related to be 100% deductible, taking a little vacation time during a trip isn’t unusual. 

With that in mind, here are some ideas that you might be able to coordinate with or plan “in and around” your holiday travel to maximize your tax deductions.

• Attending your company’s annual meeting: The IRS offers deductions for attending a corporation or LLC's annual meeting. These meetings allow you to discuss company goals, learn more about your field, and network with other professionals. 
• Visiting clients: Strengthening relationships with your customers boosts sales, attracts new customers, and provides tax deductions for businesses with clients all over the country. Try to meet as many important clients as you can when visiting their area.
• Visiting vendors: Many vendors, subcontractors, suppliers, and corporate affiliates set up shop all over the country. Take an opportunity to network, renegotiate prices, or tour the facilities. 
• Attending conferences or workshops: Look into local conferences and workshops when traveling. Seminars on business, management, taxes, marketing, SEO, website building, customer service, and technical training are the most common. Workshops relevant to your profession are tax deductible. 

While these ideas might begin as a tax write-off, they can grow into relationships with clients, business partners, and vendors.

Things to consider when writing off travel expenses for holiday travel

Some businesses keep working through the holiday season, so you may find some overlap between family and business. However, IRS auditors invest time and resources into ensuring these expenses relate to business and not a holiday trip.

Here are the main points to consider when deducting write-offs during holiday travel:

• Holiday vacations are usually not deductible: If you travel without doing any business, the IRS won’t offer any deductions on your vacation. Even if your trip was primarily a vacation with a little work tacked on, only the costs incurred for business on business days are deductible. 
• Business expenses on vacation are deductible: You can qualify for a small deduction if you go somewhere for vacation and incidentally work while traveling. In addition, any costs related to business expenses—and not relaxing or vacationing—are eligible for a write-off.
• Holiday write-offs only apply to you and work associates: If you travel to see a client over the holidays and bring your family, you cannot write off any costs they incur. You are responsible for funding their meals, lodging, and other expenses. That said, you can deduct rental car payments even if your family rides with you.

Remember to follow IRS guidelines. Passing vacation expenses off as a business write-off will trigger an IRS audit. The IRS may level a fine and revoke other business write-offs. So, to keep earning future tax deductions, stay within IRS guidelines and pay for your own vacation expenses. 

Understanding disallowed business expenses

Claiming deductions you're not entitled to, even by accident, can lead to some serious trouble with the IRS. Understanding the rules is the best way to protect your business and your bottom line.

What are disallowed business expenses?

If someone claims a deduction they don’t qualify for, the IRS penalizes them for these disallowed business expense deductions. This penalty occurs when taxpayers use write-offs to pay substantially less income tax than they should have. 

In general, the IRS defines “substantially less” as an understatement of income tax that’s more than 10% of the total tax required, or $5,000, whichever is greater. Not only will the IRS audit you for disallowed deductions, but they’ll also charge a fine.

What are the penalties for disallowed expenses?

If the IRS finds you have claimed disallowed deductions, you will face an accuracy-related penalty. The penalty is 20% of the difference between what you should have paid in taxes and what you actually paid. This means you will owe 120% of your tax obligation.

Proving your travel expenses to the IRS

To prove your travel expenses for tax purposes, keep a meticulous record of all your spending. This includes receipts, vouchers, and invoices. As a rule, don't write off an expense unless you can prove it is directly work-related. Keep these records organized and accessible to discuss with your CPA and accurately fill out your tax forms at the end of the year.

Find peace of mind come tax time

Going on a business trip is a worthwhile opportunity to expand your business, meet potential investors, and boost professional development. Whatever the reason for your next business trip, learning how to write off travel expenses can help you save money to invest in other areas of your business. 

Whether you're a solopreneur going on your first business trip or you have regular meetings across your state’s borders, keeping records of your expenses is crucial to claim tax deductions. An accounting software like QuickBooks Self-Employed can help you track your expenses on the go so you never lose a receipt.