Tax Deduction for Travel Expenses: A Complete Guide for Small Businesses

Small business owners generally travel to different cities or even countries in regard to their business. Unfortunately, it results in the added cost of lodgings, transportation, and meals. However, these expenses can be written off during the taxation period, which saves thousands of dollars that can be reinvested in the business. 

If you’re a business owner and want to get in touch with a CPA in Nashville, TN, to talk about tax education for travel expenses, we have got you covered. This article highlights everything you need to know about travel expenses tax deductible. Let’s dive in!  

Are Travel Expenses Tax Deductible? 

When the purpose of the trip is directly related to the business, the IRS promotes tax deductions on only some travel expenses. Since it becomes difficult to analyze whether the trip is completely professional or personal, certain steps can be taken to ensure the business trips’ overhead costs qualify. 

You should: 

  • Leave the tax home for more than 1 day. 
  • Spend a major chunk of your trip while out for business 
  • Iist the entire trip itinerary in advance. 

Travel Expense Tax Deduction List

When it comes to a tax deduction for travel expenses, not every expense qualifies for the deduction, which is known as non-deductible travel expenses. On the other hand, some expenses get deducted, called deductible travel expenses. Here are some deductible and non-deductible travel expenses.

1. Deductible travel expense 

  • Lodging
  • Transportation
  • Meals
  • Event Registration
  • Miscellaneous business expenses
  • Equipment rentals

2. Non-deductible travel expense 

  • Expenses in your tax home
  • Entertainment
  • lodging costs and Family travel
  • unreasonable or Unnecessary expenses

How to Write Off Travel Expenses on Your Taxes?

No matter if you spend the entire trip for business purposes, at times, you may not get the tax return because of incorrectly filing the tax deductions. Make sure you plan all the write-offs before leaving for the trip, and keep all the receipts once you are back home. 

Here is the step-by-step to follow:

  • Confirming the eligibility 
  • Ensuring all expenses made are completely necessary and ordinary 
  • Keeping all the receipts from the trip safely 
  • Itemizing all your expenses 
  • Making no mistakes while filing the write-offs. 

Wrapping Up 

As a small business owner, every penny matters; thus, the tax deduction for travel expenses is a great way to save your money. Although there are certain situations when you cannot save taxes, in most cases, you can save it hassle-free.