When you travel for business, many of your expenses can be written off on your taxes — you just need to know the rules. Here’s a quick guide to get you started!
Driving Out of Town
To start, deduct your out-of-town miles the same as you would for local drives — this means using the standard mileage rate or the actual expense. You can also deduct your mileage while at your destination.
That’s not all, though. You can deduct food, lodging, and more, including:
- Hotel or other lodging expenses for business days
- 50% of meal and drink expenses
- Laundry and dry-cleaning expenses
- Tips you pay on any of the other costs
However, staying overnight is key to deducting these costs. While you don’t have to travel any set distance to get a travel expense deduction, you must travel away from your tax home overnight for these deductibles to come into play.
What’s your “tax home”? That’s where your business is generally set. The IRS doesn’t care how far you live away from your business, so you’ll qualify for a travel deduction so long as you travel outside of your tax home city limits overnight. (Sleeping in your car doesn’t count — you’ll only get the deduction on your travel miles.)
Using a Rental Car
You don’t have to own the car you drive on a business trip to deduct costs. This includes the daily rental fee as well as gas, parking, and tolls. You just can’t take a mileage deduction for the miles you drive. If you take your rental car on an overnight business trip out of town, you can deduct your hotel and rental car costs as well as 50% of meal expenses.
And if you’re an AFEUSA member, you can rent cars more affordably than anyone else. Our partner, Avis/Budget, will give you a premium price! Join AFEUSA and cruise in style on your next business trip.
Article by Charles Jackson, President of AFEUSA