Can I deduct travel expenses?
Travel expenses can be deductible if they're incurred while conducting business-related work. Typical travel expenses include car, airfare, lodging, meals, and entertainment. For these expenses to be deductible, they must be ordinary and necessary.
Vehicle expenses can be calculated by tracking either:
- All your vehicle costs (gas, repairs, maintenance, depreciation, etc.), or
- Your business miles x the IRS mileage rate ($0.535 for 2017). For this option, you have to keep a log of all your business trips.
You can add tolls and parking fees to both methods of calculating vehicle expenses.
Business meals are deductible but only at 50% of the actual cost. Meal expenses are deductible if your business trip is overnight or long enough that you need to stop for substantial sleep or rest to properly perform your duties. Meal expenses are also deductible if the meal is business-related entertainment, regardless of where the meal takes place.
Self-employed taxpayers generally deduct their travel expenses from their self-employment income, while employees take travel and other job-related expenses as a 2% miscellaneous deduction.
Note: The 2% miscellaneous deduction for job-related employee expenses will be suspended starting in tax year 2018. More info