How to Write Off Business Travel Expenses (2025 Guide)

Introduction

Business travel can be a significant expense, but the IRS allows deductions for ordinary and necessary travel costs related to your work. Whether you’re a self-employed professional, freelancer, or business owner, understanding the rules for deducting travel expenses can help reduce your taxable income. This guide explains what qualifies, how to document expenses, and how to claim them correctly on your 2025 tax return.

What Qualifies as a Business Travel Expense? (IRC §162(a))

To qualify as a deductible business travel expense, your trip must be:

• Primarily for business (over 50% of the time must be work-related).
• Away from your tax home (your regular place of business, not necessarily your residence).
• Ordinary and necessary (common in your industry and helpful for business operations).

Common Deductible Business Travel Expenses:

• Transportation (airfare, train, bus, rental cars, taxis, rideshares)
• Lodging (hotels, Airbnb, or business-use rental properties)
• Meals (50% deductible for business-related meals)
• Incidental expenses (baggage fees, tips, business calls)
• Local transportation at the destination (subway, buses, parking fees)
• Conference fees and work-related event tickets

Non-Deductible Expenses:

• Personal entertainment and sightseeing
• Family member travel (unless they are a business employee)
• Luxury expenses not directly related to work

Transportation Deductions (IRC §162(a)(2))

If you travel for business, transportation costs are fully deductible, as long as the trip meets IRS guidelines.

Airfare, Train, and Rental Cars:

• The entire cost of airfare or train tickets is deductible if the trip is primarily for business.
• Rental car costs are deductible if used exclusively for business. If used for personal reasons, only the business-related portion can be deducted.

Example:

Lisa flies from New York to Los Angeles for a business conference, costing $500 round trip. She also rents a car for $300 and uses it 80% for business.

• She deducts $500 for airfare and $240 (80% of $300) for the rental car.

Business Meals During Travel (IRC §274(n))

• Business meals while traveling are 50% deductible.
• To qualify, the meal must be: 
  • Business-related (with clients, employees, or partners)
  • Not extravagant (reasonable for the location and situation)
• Keep receipts and document the date, location, attendees, and business purpose.

Example:

Mark attends a trade show and spends $100 on a business dinner with a client.

• He deducts $50 (50% of $100) as a travel meal expense.

Lodging and Accommodation Costs (IRC §162(a))

• Hotel stays are fully deductible if the trip is business-related.
• If you extend your stay for personal reasons, you can only deduct the business-related portion.

Example:

Sarah travels for a three-day business conference but stays five days for leisure.

• She can deduct 60% of her hotel costs (3 business days ÷ 5 total days).

Local Travel at Destination (IRC §162(a)(2))

• Taxis, Uber, Lyft, or public transportation to and from meetings are deductible.
• Parking fees and tolls while conducting business are deductible.
• If driving your personal vehicle, you can deduct:
  • Standard mileage rate ($0.67 per mile for 2025), OR
  • Actual expenses (gas, maintenance, depreciation, insurance).

Example:

Tom drives 300 miles for a business trip.

• His deduction using the standard mileage rate:
  • 300 miles × $0.67 = $201 deductible.

Conferences and Business Events (IRC §274(h))

• Registration fees for conferences, trade shows, or seminars directly related to your business are deductible.
• Non-deductible: Any event that is primarily for personal development, leisure, or entertainment.

Example:

David, a real estate agent, attends a national real estate conference.

• He deducts the $1,200 registration fee as a business expense.

Step-by-Step Guide to Writing Off Business Travel Expenses

1. Keep Detailed Records:
   • Save all receipts, invoices, and bank statements.
   • Document dates, locations, business purpose, and attendees.
2. Separate Business and Personal Expenses:
   • If combining business and personal travel, only deduct the business-related portion.
3. Use the Right IRS Forms:
   • Self-employed individuals report expenses on Schedule C (Form 1040).
   • Employees (if reimbursed by their employer) cannot deduct unreimbursed travel expenses (as per the TCJA of 2017).
4. File Taxes Correctly:
   • Use accounting software or a CPA to ensure compliance.

Conclusion

Business travel expenses can be a valuable tax deduction if properly documented and used for legitimate work purposes. Knowing which costs qualify and keeping accurate records will help ensure compliance with IRS rules.

Need help? Schedule a consultation with Anshul Goyal, CPA EA FCA to make sure you maximize your business deductions.

Disclaimer

This article is for informational purposes only and should not be considered tax, legal, or financial advice. Tax laws change frequently, and individual circumstances vary. Consult a qualified tax professional, such as Anshul Goyal, CPA EA FCA, before making any tax-related decisions.

FAQs

1. Can I deduct travel expenses if I mix business and personal travel?

Yes, but you can only deduct the portion directly related to business.

2. Are meals 100% deductible during business travel?

No, business meals are 50% deductible.

3. Can I deduct family members’ travel expenses?

No, unless they are employees of the business and their travel is business-related.

4. What records should I keep for travel deductions?

Save receipts, mileage logs, and travel itineraries showing the business purpose.

5. What form do I use to report travel expenses?

• Self-employed individuals: Schedule C (Form 1040).
• Employees: Cannot deduct travel expenses unless reimbursed by an employer.