How to Make Travel Expenses Tax Deductible

Business travel expenses are a commonly used tax deduction. This deduction can become increasingly complex if you decide to take care of personal business while on one of your business trips. Knowing which travel costs can be deducted will make it easier for you at tax time.

Instructions

1

Take a temporary business assignment away from home and cost associated with travel expenses will be considered tax deductible. Although, work assignments lasting longer than a year in duration is considered indefinite and is not eligible for a tax deduction.

2

Deduct costs associated with travel expenses that are only ordinary and necessary. Meaning, having a meal allowance of about $30 a day is ordinary, but eating at five start restaurants with breakfast, lunch, and dinner costing $30 a plate is not necessary or ordinary. Items bought strictly for personal use is not eligible as well.

3

Travel due to existing business. You can not accept the tax deduction if you are traveling to start a new business or trying to acquire one. That would fall under startup expenses category which is separate from travel expenses.

4

Deduct your travel expenses if business is the primary reason of your trip, but if not, then you can not deduct airfare, hotel or any other travel expense. Traveling for personal reasons while on a business trip can make the cost of your travel expenses ineligible for a tax deduction.

5

Claim your travel expenses on Line 24a on Schedule C if you are a sole proprietor. Show the total cost of your meals and entertainment separately on Line 24b. The form will require you compute 50 percent of that amount on the form to ensure you only deduct 50 percent of the cost.

6

Figure your travel expense on Form 2106 or Form 2106-EZ if you are an employee. Depending on how you file your taxes, you may need to use Form 1040 Schedule A and have a limit based on 2 percent of your adjusted gross income. You can only get this deduction if you itemize.