business trips abroad expenses

Everything You Need to Know About the Business Travel Tax Deduction

Justin is an IRS Enrolled Agent, allowing him to represent taxpayers before the IRS. He loves helping freelancers and small business owners save on taxes. He is also an attorney and works part-time with the Keeper Tax team.

You don’t have to fly first class and stay at a fancy hotel to claim travel expense tax deductions. Conferences, worksite visits, and even a change of scenery can (sometimes) qualify as business travel.

What counts as business travel?

The IRS does have a few simple guidelines for determining what counts as business travel. Your trip has to be:

Mostly business
An “ordinary and necessary” expense
Someplace far away from your “tax home”

What counts as "mostly business"?

The IRS will measure your time away in days. If you spend more days doing business activities than not, your trip is considered "mostly business". Your travel days are counted as work days.

Special rules for traveling abroad

If you are traveling abroad for business purposes, you trip counts as " entirely for business " as long as you spend less than 25% of your time on personal activities (like vacationing). Your travel days count as work days.

So say you you head off to Zurich for nine days. You've got a seven-day run of conference talks, client meetings, and the travel it takes to get you there. You then tack on two days skiing on the nearby slopes.

Good news: Your trip still counts as "entirely for business." That's because two out of nine days is less than 25%.

What is an “ordinary and necessary” expense?

“Ordinary and necessary” means that the trip:

Makes sense given your industry, and
Was taken for the purpose of carrying out business activities

If you have a choice between two conferences — one in your hometown, and one in London — the British one wouldn’t be an ordinary and necessary expense.

What is your tax home?

A taxpayer can deduct travel expenses anytime you are traveling away from home but depending on where you work the IRS definition of “home” can get complicated.

Your tax home is often — but not always — where you live with your family (what the IRS calls your "family home"). When it comes to defining it, there are two factors to consider:

What's your main place of business, and
How large is your tax home

What's your main place of business?

If your main place of business is somewhere other than your family home, your tax home will be the former — where you work, not where your family lives.

For example, say you:

Live with your family in Chicago, but
Work in Milwaukee during the week (where you stay in hotels and eat in restaurants)

Then your tax home is Milwaukee. That's your main place of business, even if you travel back to your family home every weekend.

How large is your tax home?

In most cases, your tax home is the entire city or general area where your main place of business is located.

The “entire city” is easy to define but “general area” gets a bit tricker. For example, if you live in a rural area, then your general area may span several counties during a regular work week.

Rules for business travel

Want to check if your trip is tax-deductible? Make sure it follows these rules set by the IRS.

1. Your trip should take you away from your home base

A good rule of thumb is 100 miles. That’s about a two hour drive, or any kind of plane ride. To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn’t your home.

2. You should be working regular hours

In general, that means eight hours a day of work-related activity.

It’s fine to take personal time in the evenings, and you can still take weekends off. But you can’t take a half-hour call from Disneyland and call it a business trip.

Here's an example. Let’s say you’re a real estate agent living in Chicago. You travel to an industry conference in Las Vegas. You go to the conference during the day, go out in the evenings, and then stay the weekend. That’s a business trip!

3. The trip should last less than a year

Once you’ve been somewhere for over a year, you’re essentially living there. However, traveling for six months at a time is fine!

For example, say you’re a freelancer on Upwork, living in Seattle. You go down to stay with your sister in San Diego for the winter to expand your client network, and you work regular hours while you’re there. That counts as business travel.

What about digital nomads?

With the rise of remote-first workplaces, many freelancers choose to take their work with them as they travel the globe. There are a couple of requirements these expats have to meet if they want to write off travel costs.

Requirement #1: A tax home

Digital nomads have to be able to claim a particular foreign city as a tax home if they want to write off any travel expenses. You don't have to be there all the time — but it should be your professional home base when you're abroad.

For example, say you've rent a room or a studio apartment in Prague for the year. You regularly call clients and finish projects from there. You still travel a lot, for both work and play. But Prague is your tax home, so you can write off travel expenses.

Requirement #2: Some work-related reason for traveling

As long as you've got a tax home and some work-related reason for traveling, these excursion count as business trips. Plausible reasons include meeting with local clients, or attending a local conference and then extending your stay.

However, if you’re a freelance software developer working from Thailand because you like the weather, that unfortunately doesn't count as business travel.

The travel expenses you can write off

As a rule of thumb, all travel-related expenses on a business trip are tax-deductible. You can also claim meals while traveling, but be careful with entertainment expenses (like going out for drinks!).

Here are some common travel-related write-offs you can take.

🛫 All transportation

Any transportation costs are a travel tax deduction. This includes traveling by airplane, train, bus, or car. Baggage fees are deductible, and so are Uber rides to and from the airport.

Just remember: if a client is comping your airfare, or if you booked your ticket with frequent flier miles, then it isn't deductible since your cost was $0.

If you rent a car to go on a business trip, that rental is tax-deductible. If you drive your own vehicle, you can either take actual costs or use the standard mileage deduction. There's more info on that in our guide to deducting car expenses .

Hotels, motels, Airbnb stays, sublets on Craigslist, even reimbursing a friend for crashing on their couch: all of these are tax-deductible lodging expenses.

🥡 Meals while traveling

If your trip has you staying overnight — or even crashing somewhere for a few hours before you can head back — you can write off food expenses. Grabbing a burger alone or a coffee at your airport terminal counts! Even groceries and takeout are tax-deductible.

One important thing to keep in mind: You can usually deduct 50% of your meal costs. For 2021 and 2022, meals you get at restaurants are 100% tax-deductible. Go to the grocery store, though, and you’re limited to the usual 50%.

{upsell_block}

🌐 Wi-Fi and communications

Wi-Fi — on a plane or at your hotel — is completely deductible when you’re traveling for work. This also goes for other communication expenses, like hotspots and international calls.

If you need to ship things as part of your trip — think conference booth materials or extra clothes — those expenses are also tax-deductible.

👔 Dry cleaning

Need to look your best on the trip? You can write off related expenses, like laundry charges.

{write_off_block}

Travel expenses you can't deduct

Some travel costs may seem like no-brainers, but they're not actually tax-deductible. Here are a couple of common ones to watch our for.

The cost of bringing your child or spouse

If you bring your child or spouse on a business trip, your travel expense deductions get a little trickier. In general, the cost of bring other people on a business trip is considered personal expense — which means it's not deductible.

You can only deduct travel expenses if your child or spouse:

Is an employee,
Has a bona fide business purpose for traveling with you, and
Would otherwise be allowed to deduct the travel expense on their own

Some hotel bill charges

Staying in a hotel may be required for travel purposes. That's why the room charge and taxes are deductible.

Some additional charges, though, won't qualify. Here are some examples of fees that aren't tax-deductible:

Gym or fitness center fees
Movie rental fees
Game rental fees

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Where to claim travel expenses when filing your taxes

If you are self-employed, you will claim all your income tax deduction on the Schedule C. This is part of the Form 1040 that self-employed people complete ever year.

What happens if your business deductions are disallowed?

If the IRS challenges your business deduction and they are disallowed, there are potential penalties. This can happen if:

The deduction was not legitimate and shouldn't have been claimed in the first place, or
The deduction was legitimate, but you don't have the documentation to support it

When does the penalty come into play?

The 20% penalty is not automatic. It only applies if it allowed you to pay substantially less taxes than you normally would. In most cases, the IRS considers “substantially less” to mean you paid at least 10% less.

In practice, you would only reach this 10% threshold if the IRS disqualified a significant number of your travel deductions.

How much is the penalty?

The penalty is normally 20% of the difference between what you should have paid and what you actually paid. You also have to make up the original difference.

In total, this means you will be paying 120% of your original tax obligation: your original obligation, plus 20% penalty.

Justin W. Jones, EA, JD

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Common Types of Deductible Business Travel Costs

Some examples of costs that you normally can deduct for business travel, whether domestic or international, include shipping and luggage costs, communications costs, laundry bills, and lodging. You can deduct the full cost of your lodging, regardless of how expensive it is. You also can deduct up to half the cost of any meals while you are traveling for business if they are not lavish or extravagant. You do not need to show that the meal was related to business.

Half the cost of meals
Transportation
Shipping and luggage
Communications

Transportation costs are also deductible in most cases. These include the costs of getting to the destination for your business trip, as well as costs for transportation while you are there. For example, you can deduct the cost of a plane ticket to another city and the cost of taking a taxi from the airport to your hotel or business site once you arrive. You also can deduct the cost of a car rental or any costs related to using your own car on the trip. In the unlikely event that you take a cruise ship or another form of luxury water travel to your destination, you will want to explore the special rules in these situations.

Transportation for International Business Travel

If you are traveling to a foreign country for business, you can deduct the full cost of your transportation to and from the country if your trip was entirely for business purposes. This means that you spent all of your waking hours during the trip handling matters related to your job. You also can deduct the full cost of your transportation to and from a foreign country if your trip is considered entirely for business purposes. This can be more complex.

An international trip will be considered entirely for business purposes if you do not spend more than one week outside the U.S., you spend at least 76 percent of your time on work-related activities, you did not have substantial control in planning the trip, or you can show that a personal vacation was not a major consideration in taking the trip. To qualify under the one-week rule, you must count the day on which you returned to the U.S. as part of the week, but you will not count the day on which you left the U.S. To qualify under the 76 percent rule, you must count both the day on which you left the U.S. and the day on which you returned to the U.S. To qualify under the substantial control rule, you cannot be related to your employer.

Some business expenses may still be deductible even if a trip is not taken entirely for business purposes.

Even if your trip does not fit into one of these categories, you may be able to take a limited deduction if you took the trip primarily for business purposes. (If your trip was primarily for personal purposes, you cannot take any deduction.) You will need to determine which days of the trip counted as business days and divide that number by the total number of days that the trip lasted. This will give you the percentage of the trip costs that you can deduct. A business day is defined as a day on which you needed to be present in the foreign country for business reasons, or a day on which you were principally engaged in business activity during working hours. If business days fall on either side of a weekend or holiday, those days can count as business days. Days in transit also count as business days.

Last reviewed October 2023

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How to Deduct Travel Expenses (with Examples)

Reviewed by

November 3, 2022

This article is Tax Professional approved

Good news: most of the regular costs of business travel are tax deductible.

Even better news: as long as the trip is primarily for business, you can tack on a few vacation days and still deduct the trip from your taxes (in good conscience).

I am the text that will be copied.

Even though we advise against exploiting this deduction, we do want you to understand how to leverage the process to save on your taxes, and get some R&R while you’re at it.

Follow the steps in this guide to exactly what qualifies as a travel expense, and how to not cross the line.

The travel needs to qualify as a “business trip”

Unfortunately, you can’t just jump on the next plane to the Bahamas and write the trip off as one giant business expense. To write off travel expenses, the IRS requires that the primary purpose of the trip needs to be for business purposes.

Here’s how to make sure your travel qualifies as a business trip.

1. You need to leave your tax home

Your tax home is the locale where your business is based. Traveling for work isn’t technically a “business trip” until you leave your tax home for longer than a normal work day, with the intention of doing business in another location.

2. Your trip must consist “mostly” of business

The IRS measures your time away in days. For a getaway to qualify as a business trip, you need to spend the majority of your trip doing business.

For example, say you go away for a week (seven days). You spend five days meeting with clients, and a couple of days lounging on the beach. That qualifies as business trip.

But if you spend three days meeting with clients, and four days on the beach? That’s a vacation. Luckily, the days that you travel to and from your location are counted as work days.

3. The trip needs to be an “ordinary and necessary” expense

“Ordinary and necessary ” is a term used by the IRS to designate expenses that are “ordinary” for a business, given the industry it’s in, and “necessary” for the sake of carrying out business activities.

If there are two virtually identical conferences taking place—one in Honolulu, the other in your hometown—you can’t write off an all-expense-paid trip to Hawaii.

Likewise, if you need to rent a car to get around, you’ll have trouble writing off the cost of a Range Rover if a Toyota Camry will get you there just as fast.

What qualifies as “ordinary and necessary” can seem like a gray area at times, and you may be tempted to fudge it. Our advice: err on the side of caution. if the IRS chooses to investigate and discovers you’ve claimed an expense that wasn’t necessary for conducting business, you could face serious penalties .

4. You need to plan the trip in advance

You can’t show up at Universal Studios , hand out business cards to everyone you meet in line for the roller coaster, call it “networking,” and deduct the cost of the trip from your taxes. A business trip needs to be planned in advance.

Before your trip, plan where you’ll be each day, when, and outline who you’ll spend it with. Document your plans in writing before you leave. If possible, email a copy to someone so it gets a timestamp. This helps prove that there was professional intent behind your trip.

The rules are different when you travel outside the United States

Business travel rules are slightly relaxed when you travel abroad.

If you travel outside the USA for more than a week (seven consecutive days, not counting the day you depart the United States):

You must spend at least 75% of your time outside of the country conducting business for the entire getaway to qualify as a business trip.

If you travel outside the USA for more than a week, but spend less than 75% of your time doing business, you can still deduct travel costs proportional to how much time you do spend working during the trip.

For example, say you go on an eight-day international trip. If you spend at least six days conducting business, you can deduct the entire cost of the trip as a business expense—because 6 is equivalent to 75% of your time away, which, remember, is the minimum you must spend on business in order for the entire trip to qualify as a deductible business expense.

But if you only spend four days out of the eight-day trip conducting business—or just 50% of your time away—you would only be able to deduct 50% of the cost of your travel expenses, because the trip no longer qualifies as entirely for business.

List of travel expenses

Here are some examples of business travel deductions you can claim:

Plane, train, and bus tickets between your home and your business destination
Baggage fees
Laundry and dry cleaning during your trip
Rental car costs
Hotel and Airbnb costs
50% of eligible business meals
50% of meals while traveling to and from your destination

On a business trip, you can deduct 100% of the cost of travel to your destination, whether that’s a plane, train, or bus ticket. If you rent a car to get there, and to get around, that cost is deductible, too.

The cost of your lodging is tax deductible. You can also potentially deduct the cost of lodging on the days when you’re not conducting business, but it depends on how you schedule your trip. The trick is to wedge “vacation days” in between work days.

Here’s a sample itinerary to explain how this works:

Thursday: Fly to Durham, NC. Friday: Meet with clients. Saturday: Intermediate line dancing lessons. Sunday: Advanced line dancing lessons. Monday: Meet with clients. Tuesday: Fly home.

Thursday and Tuesday are travel days (remember: travel days on business trips count as work days). And Friday and Monday, you’ll be conducting business.

It wouldn’t make sense to fly home for the weekend (your non-work days), only to fly back into Durham for your business meetings on Monday morning.

So, since you’re technically staying in Durham on Saturday and Sunday, between the days when you’ll be conducting business, the total cost of your lodging on the trip is tax deductible, even if you aren’t actually doing any work on the weekend.

It’s not your fault that your client meetings are happening in Durham—the unofficial line dancing capital of America .

Meals and entertainment during your stay

Even on a business trip, you can only deduct a portion of the meal and entertainment expenses that specifically facilitate business. So, if you’re in Louisiana closing a deal over some alligator nuggets, you can write off 50% of the bill.

Just make sure you make a note on the receipt, or in your expense-tracking app , about the nature of the meeting you conducted—who you met with, when, and what you discussed.

On the other hand, if you’re sampling the local cuisine and there’s no clear business justification for doing so, you’ll have to pay for the meal out of your own pocket.

Meals and entertainment while you travel

While you are traveling to the destination where you’re doing business, the meals you eat along the way can be deducted by 50% as business expenses.

This could be your chance to sample local delicacies and write them off on your tax return. Just make sure your tastes aren’t too extravagant. Just like any deductible business expense, the meals must remain “ordinary and necessary” for conducting business.

How Bench can help

Surprised at the kinds of expenses that are tax-deductible? Travel expenses are just one of many unexpected deductible costs that can reduce your tax bill. But with messy or incomplete financials, you can miss these tax saving expenses and end up with a bigger bill than necessary.

Enter Bench, America’s largest bookkeeping service. With a Bench subscription, your team of bookkeepers imports every transaction from your bank, credit cards, and merchant processors, accurately categorizing each and reviewing for hidden tax deductions. We provide you with complete and up-to-date bookkeeping, guaranteeing that you won’t miss a single opportunity to save.

Want to talk taxes with a professional? With a premium subscription, you get access to unlimited, on-demand consultations with our tax professionals. They can help you identify deductions, find unexpected opportunities for savings, and ensure you’re paying the smallest possible tax bill. Learn more .

Bringing friends & family on a business trip

Don’t feel like spending the vacation portion of your business trip all alone? While you can’t directly deduct the expense of bringing friends and family on business trips, some costs can be offset indirectly.

Driving to your destination

Have three or four empty seats in your car? Feel free to fill them. As long as you’re traveling for business, and renting a vehicle is a “necessary and ordinary” expense, you can still deduct your business mileage or car rental costs even when others join you for the ride.

One exception: If you incur extra mileage or “unnecessary” rental costs because you bring your family along for the ride, the expense is no longer deductible because it isn’t “necessary or ordinary.”

For example, let’s say you had to rent an extra large van to bring your children on a business trip. If you wouldn’t have needed to rent the same vehicle to travel alone, the expense of the extra large van no longer qualifies as a business deduction.

Renting a place to stay

Similar to the driving expense, you can only deduct lodging equivalent to what you would use if you were travelling alone.

However, there is some flexibility. If you pay for lodging to accommodate you and your family, you can deduct the portion of lodging costs that is equivalent to what you would pay only for yourself .

For example, let’s say a hotel room for one person costs $100, but a hotel room that can accommodate your family costs $150. You can rent the $150 option and deduct $100 of the cost as a business expense—because $100 is how much you’d be paying if you were staying there alone.

This deduction has the potential to save you a lot of money on accommodation for your family. Just make sure you hold on to receipts and records that state the prices of different rooms, in case you need to justify the expense to the IRS

Heads up. When it comes to AirBnB, the lines get blurry. It’s easy to compare the cost of a hotel room with one bed to a hotel room with two beds. But when you’re comparing significantly different lodgings, with different owners—a pool house versus a condo, for example—it becomes hard to justify deductions. Sticking to “traditional” lodging like hotels and motels may help you avoid scrutiny during an audit. And when in doubt: ask your tax advisor.

So your trip is technically a vacation? You can still claim any business-related expenses

The moment your getaway crosses the line from “business trip” to “vacation” (e.g. you spend more days toasting your buns than closing deals) you can no longer deduct business travel expenses.

Generally, a “vacation” is:

A trip where you don’t spend the majority of your days doing business
A business trip you can’t back up with correct documentation

However, you can still deduct regular business-related expenses if you happen to conduct business while you’re on vacay.

For example, say you visit Portland for fun, and one of your clients also lives in that city. You have a lunch meeting with your client while you’re in town. Because the lunch is business related, you can write off 50% of the cost of the meal, the same way you would any other business meal and entertainment expense . Just make sure you keep the receipt.

Meanwhile, the other “vacation” related expenses that made it possible to meet with this client in person—plane tickets to Portland, vehicle rental so you could drive around the city—cannot be deducted; the trip is still a vacation.

If your business travel is with your own vehicle

There are two ways to deduct business travel expenses when you’re using your own vehicle.

Actual expenses method
Standard mileage rate method

Actual expenses is where you total up the actual cost associated with using your vehicle (gas, insurance, new tires, parking fees, parking tickets while visiting a client etc.) and multiply it by the percentage of time you used it for business. If it was 50% for business during the tax year, you’d multiply your total car costs by 50%, and that’d be the amount you deduct.

Standard mileage is where you keep track of the business miles you drove during the tax year, and then you claim the standard mileage rate .

The cost of breaking the rules

Don’t bother trying to claim a business trip unless you have the paperwork to back it up. Use an app like Expensify to track business expenditure (especially when you travel for work) and master the art of small business recordkeeping .

If you claim eligible write offs and maintain proper documentation, you should have all of the records you need to justify your deductions during a tax audit.

Speaking of which, if your business is flagged to be audited, the IRS will make it a goal to notify you by mail as soon as possible after your filing. Usually, this is within two years of the date for which you’ve filed. However, the IRS reserves the right to go as far back as six years.

Tax penalties for disallowed business expense deductions

If you’re caught claiming a deduction you don’t qualify for, which helped you pay substantially less income tax than you should have, you’ll be penalized. In this case, “substantially less” means the equivalent of a difference of 10% of what you should have paid, or $5,000—whichever amount is higher.

The penalty is typically 20% of the difference between what you should have paid and what you actually paid in income tax. This is on top of making up the difference.

Ultimately, you’re paying back 120% of what you cheated off the IRS.

If you’re slightly confused at this point, don’t stress. Here’s an example to show you how this works:

Suppose you would normally pay $30,000 income tax. But because of a deduction you claimed, you only pay $29,000 income tax.

If the IRS determines that the deduction you claimed is illegitimate, you’ll have to pay the IRS $1200. That’s $1000 to make up the difference, and $200 for the penalty.

Form 8275 can help you avoid tax penalties

If you think a tax deduction may be challenged by the IRS, there’s a way you can file it while avoiding any chance of being penalized.

File Form 8275 along with your tax return. This form gives you the chance to highlight and explain the deduction in detail.

In the event you’re audited and the deduction you’ve listed on Form 8275 turns out to be illegitimate, you’ll still have to pay the difference to make up for what you should have paid in income tax—but you’ll be saved the 20% penalty.

Unfortunately, filing Form 8275 doesn’t reduce your chances of being audited.

Where to claim travel expenses

If you’re self-employed, you’ll claim travel expenses on Schedule C , which is part of Form 1040.

When it comes to taking advantage of the tax write-offs we’ve discussed in this article—or any tax write-offs, for that matter—the support of a professional bookkeeping team and a trusted CPA is essential.

Accurate financial statements will help you understand cash flow and track deductible expenses. And beyond filing your taxes, a CPA can spot deductions you may have overlooked, and represent you during a tax audit.

Learn more about how to find, hire, and work with an accountant . And when you’re ready to outsource your bookkeeping, try Bench .

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Mastering Tax Rules for American Business Travelers Abroad: Tips and Tricks from CPAs

Are you planning a business trip overseas and are wondering about tax deductions? As a Certified Public Accountant (CPA) firm, we’ve got you covered! Let’s dive into the tax rules for foreign business travel.

Tax Deductions for Overseas Business Trips

If your trip out of the country is entirely for business purposes, you can deduct:

All travel costs
Meals (at 50%)
Some incidental costs (like laundry and dry cleaning)

One Week Tax Rule for Foreign Business Travel

If your business trip requires a passport and lasts for a week or less , then your travel expenses are 100% deductible, including transportation costs and daily out-of-pocket living expenses for business days (50% limitation on meals).

A week for this purpose means seven consecutive days, not counting the day of departure, but counting the day of return.

25% Rule: Mostly Business

If your business trip is longer than a week, you can deduct your travel expenses if the personal days make up less than 25% of the total days spent on the trip.

For this purpose, the total days of the trip include the day of departure and the day of return.

What tax rules count as business days:

If business is conducted for a part of the day, it’s counted as a business day
Days spent traveling to or from a business destination
Weekend days or holidays falling between two business days.

Example: Tax Deductions for Foreign Business Travel

Let’s say you’re like Andrew and you fly to Paris on a Monday primarily for business reasons. You spend Tuesday and Wednesday vacationing. Then you spend Thursday, Friday, and the following Monday – Thursday on business before flying home Friday.

Counting the days of return and departure, it’s a 12 day trip. Only the first Tuesday and Wednesday are nonbusiness days. Thus, less than 25% of the trip is personal (two personal days of 12 total trip days).

All of the travel costs, meals (at 50%), and lodging for the business days are deductible, but the meals and lodging costs for the two vacation days are not.

If you don’t meet the one week or 25% rule, you may still be able to deduct all of the travel costs if you can show that the chance to take a vacation was not a major consideration for the trip. Of course, the larger the vacation portion, the more difficult it will be to make your case.

Example: Partial Business and Personal Travel Over a Week

Now, if your trip is primarily but not entirely for business, the rules get more complex.

If your trip doesn’t meet the one week rule or the 25% rule, the costs allocable to the personal (vacation) part of the trip cannot be deducted.

For example, if the trip covers 10 days—four personal and six business—meals, lodging, etc. are only deductible for the business days. Furthermore, only 60% of the travel costs (airfare, etc.) are deductible, reflecting the fact that only 60% of the days of the trip were business days.

Primarily Personal Business Trip

If the trip is primarily personal, none of the costs of travel to and from the destination are deductible, even if some time is spent on business. Lodging, meals, etc. would be deductible for the business days.

That’s it for the tax rules for foreign business travel. Always consult with a CPA to ensure you’re following the IRS guidelines and maximizing your tax deductions.

More Information

If you have questions, contact us to discuss your situation.

To check out our other articles on business topics, click here .

Alan Dierker

Alan Dierker is a Tax Manager with experience in tax, outsourced controller services, including fulfilling compilation and preparation agreements, payroll and compliance issues. He also has experience in the following industries: Wholesale Distribution, Private Foundations, Not-for-Profit and Real Estate. About Smith Patrick CPAs Smith Patrick CPAs is a boutique, St. Louis-based, CPA firm dedicated to providing personal guidance on taxes, investment advice and financial service to forward-thinking businesses and financially active individuals. For over 30 years, our firm has focused on providing excellent service to business owners and high-net worth families across the country. Investment Advisory Services are offered through Wealth Management, LLC , a Registered Investment Advisor.

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A List of Business Travel Expenses You Can Write Off In 2023 [+Travel Expense Calculator & Tax Organizer]

Figuring out which business travel expenses you can write off probably registers on the fun-o-meter at the same level as root canals or bathing feral cats.

Travel agents are plagued with tricky questions when it comes to travel expense write-offs. If you have a few business meetings during a family vacation, how much of the trip can be a travel expense write-off? If you specialize in Europe does that mean any and all trips to Europe are tax write-offs?

Don’t worry. Stick with us and we’ll clear up what you can and can’t write off as a travel expense. I learned a thing or two when I chatted with Jay Elstad, a CPA (Certified Public Accountant) with Riley Martin Ltd , and Stephanie Cannon, a former accountant turned Founder of SC Travel Design . Our Friday 15 Episode with Stephanie Cannon in late 2022 is pretty much a movie trailer for this article!

It turns out that figuring out travel expenses is a lot less intimidating when you talk to professionals. So I’m here to share their wisdom with you. Starting with HAR's beauteous tax organizer! Download it now and keep it handy while you go through the article!

Here's how HAR's Tax Organizer looks in action:

To make it your very own, just click on the upper right-hand arrow on the document to download it for yourself! (If you have any issues or you don't have a Gmail account, we won't leave you out! Just drop us a line at [email protected] and we'll send it via email).

This article and the HAR tax organizer will ensure you’re tracking and logging expenses thoroughly and efficiently. Will it make tracking travel expenses fun? Um, no. Sorry. I’m not that good. But I will give you the tools to help you feel more confident when it comes to travel expenses.

⭐️ HAR ARTICLE HIGHLIGHTS: ⭐️

PDF: A list of travel expenses you can (and can't) write off
Business Travel Expenses You Can Write Off
Business Travel Expenses You Can't Write Off
Hobbyists (or Travel Dabblers)
Cruises & Travel Expenses
The Elephant in the Room: Is a Vacation a Travel Expense?
Travel Expense Scenarios for Travel Professionals
Tips on Tracking & Documenting Your Business Travel Expenses
Travel Expense Tracking Tools

A PDF Summary of Business Travel Expenses You Can (and Can't) Write Off

Our infographic details which business travel expenses you can (and can't) write off at a glance. If you're looking for crib notes, this PDF is it. But I highly recommend reading the rest of the article because business travel expense write-offs are all about nuance and the nitty-gritty.

A List Travel Expenses You Can Write Off

You can write off any travel expenses that are necessary, reasonable, and ordinary to your business operations. Below are examples of travel expenses you can (and cannot write off). Let's start with which write-offs are a green light.

1: Transportation

By airplane, train, bus, or car between your home and your business destination.
Fares for taxis or other types of transportation between the airport or train station and your hotel, or the hotel and the work location of your customers or clients, your business meeting place, or your temporary work location.
Personal car usage or car rental: You can deduct actual expenses or the standard mileage rate (¢65.5 for 2023 travel), as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.

2. Baggage or Shipping

Checking in your luggage? You can deduct that. Shipping display materials for the trade show? Go ahead and write that off too (so long as it’s between your regular and temporary work location).

You can deduct any of your business-related lodgings as an expense so long as it’s reasonable and necessary to your business (e.g. hotel/resort stay during a travel conference).

If you bring your sweetie/friend/kid you can only deduct lodging expenses that are reasonable for one person, for the nights/days that you worked.

4. Dry cleaning and laundry

If you have laundry or dry cleaning bills during your business travel, keep those receipts for your travel expenses. (I'm told that traveling to your basement to do laundry does not fall under this category.)

5. Communication Expenses (Beyond your work cell phone)

(beyond your cell phone): Your cell phone will already be deducted in a different category. But if you have any peripheral communications like leasing a satellite phone in Antarctica (sweet!) for emergency business calls, you can deduct that.

Tips include any gratuity to pay for the services noted on this list (porter fees, room service/cleaning, cab rides, etc.).

Note on cash: If you take out cash for tips (or other incidentals) from an ATM, the ATM receipt is not enough documentation. You should write down on your ATM receipt the date, location/service, and amount, for which you tipped if you want to take it as a deduction.

This one is super vague, but here it is in IRS speak, "Other similar ordinary and necessary expenses related to your business travel." (e.g. use of a hotel business center, hiring an interpreter, transportation to and from hotel to business event, etc.)

I saved meals for last because it's a little complicated. But here's what you need to know about meals. The IRS recommends using a standard meal allowance rather than engaging in the administrative gymnastic of saving every receipt form every meal. Here's the lowdown.

You can (generally) deduct 50% of the unreimbursed meal cost. (Meals in 2022 can be deducted at 100% due to IRS' temporary rule, Notice 21-25 )
Meals must be non-entertainment-related. In 2018, the tax law changed, rendering entertainment expenses 100% nondeductible . So if you go to a dinner theater show with a client and the meal portion is not itemized on your theater ticket, you cannot deduct it.
There are two ways you can track/deduct meal expenses. You can either use a per diem or track your actual expenses. We’ll explore this soon , so stay tuned

A List of Travel Expenses You Can't Write Off

Now for the less fun part: Here are examples of travel expenses you CAN NOT deduct.

1. Entertainment

Entertainment is not an allowable expense. Going golfing at the resort with a potential client or a BDM (business development manager) while you’re at a business conference? Too bad . . . you’re going to have to do it on your own dime.

2. Family/friends/dependents traveling with you

If you’re traveling with a friend, family member, and/or dependent you cannot deduct any of their travel expenses.

If you feel like you fall under an exception to this rule—e.g. you compensate your family member/friend/dependent to fulfill necessary business activities during the trip and have the 1099 or W-2 to prove they work for you—talk to your CPA.

3. Lavish and extravagant

Lavish and extravagant expenses are not allowed by the IRS. However, they’re a little foggy on what defines lavish or extravagant saying only, “an expense isn’t considered lavish or extravagant if it’s reasonable based on facts or circumstances.”

If you think this may be a concern for you, talk to your CPA.

4. Travel that is compensated

This may seem obvious, but if your travel is comped, you cannot deduct it as an expense. For example, if you’re presenting at a conference and the event planner comps your entire hotel stay, you cannot deduct lodging.

The same also goes for using points on loyalty programs toward flight/lodging etc.

5. Personal vacations

You cannot deduct personal travel. When it comes to mixing business with leisure (I mean, do travel agents ever really stop working?), we get into a serious gray area. It’s such a doozie that it gets its own section. So read on.

Travel Expenses for Travel Advisor Hobbyists (or Travel Dabblers)

I’m not going to spend too much time talking about hobbyists. Just know that if you sell travel as a hobby, then none of your travel expenses are allowable in the eyes of the IRS.

How do you know if you’re a hobbyist? The IRS has a long list , including items like whether or not “you depend on the income for your livelihood” and other fun determining factors.

The IRS understands it can take a while to become profitable. Typically, you’re approaching hobbyist territory in the eyes of the IRS if you report a loss of three out of five years of business operations. (A loss means you’re claiming business expenses beyond your income.)

As with all things tax-related, there are exceptions as to what expenses are considered a loss, but that's above my pay grade. You’re a psychic now so you know what I’m about to say . . . talk to your accountant or CPA.

Cruises & Business Travel Expenses

You can only deduct up to $2,000 per year of expenses for things held on cruise ships

Cruises are special snowflakes and are subject to their own rules when it comes to travel expenses. According to the IRS , “You can deduct up to $2,000 per year of your expenses of attending conventions, seminars, or similar meetings held on cruise ships. All ships that sail are considered cruise ships.”

This may not be the happiest news to cruise buffs who spend thousands per year on Seminars at Seas. But remember, I’m just the messenger (not the IRS).

If you want to write off your 2k in cruises, there are all sorts of stringent requirements you need to meet. Below, I am copying and pasting what the IRS has to say on the matter, verbatim (why reinvent the wheel):

You can deduct these [cruise] expenses only if all of the following requirements are met.

The convention, seminar, or meeting is directly related to the active conduct of your trade or business.
The cruise ship is a vessel registered in the United States.
All of the cruise ship's ports of call are in the United States or in possession of the United States.
You attach to your return a written statement signed by you that includes information about:
The total days of the trip (not including the days of transportation to and from the cruise ship port),
The number of hours each day that you devoted to scheduled business activities, and
A program of the scheduled business activities of the meeting.
You attach to your return a written statement signed by an officer of the organization or group sponsoring the meeting that includes:
A schedule of the business activities of each day of the meeting, and
The number of hours you attended the scheduled business activities.

Again, if you think your cruise trip/business model is an exception, or you have a bone to pick with these rules, don’t call me. [Enter refrain] Talk to your CPA.

The Elephant in the Room: Is Your Vacation a Travel Expense?

I know that CPAs and accountants everywhere are probably going to duck and cover at the merest whisper of deducting trips that have even a whiff of personal travel.

But as a travel agent, it’s confusing since you need to travel to run a successful and profitable business.

Sure, it’s easy enough to justify travel expenses for a conference or an escorted FAM (familiarization trip). But when it comes to deducting travel expenses for any trip that’s in any way attached to personal travel, you’re entering some serious gray area (I like to call this Grayland).

The IRS isn’t super helpful when it comes to navigating Grayland. Their verdict is this, “If your trip was conducted primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. However, you can deduct any expenses you have while at your destination that are directly related to your business.”

Not exactly cut and dry. Sigh.

I can’t advise you on your taxes (trust me, everyone loses in this scenario). But here are a few guiding questions that help you determine if your trip is justifiable as a travel expense (and to what extent).

1. What is the primary purpose of your trip? You know in your heart of hearts whether your primary purpose is business or personal. If your primary purpose is to go to Mexico with your family, it’s going to be a tough sell to deduct your travel expenses. (Even if you do sell the resort or region you’re staying at.)

If the primary purpose of your trip is an Oaxaca FAM that’s sponsored by the Mexico tourism board, then that’s a different story. We’ll talk more about mixing business with pleasure later. But here’s the major takeaway: You can deduct only the expenses of your trip that are directly related to business. (Remember: reasonable, ordinary, necessary).

2. How much of your trip is spent on activities directly related to business activities? You can only write off the travel expenses directly related to business activity. So if you spend 10 days in Mexico with your family, but you spend 3 days ditching your family to go on-site inspections you scheduled weeks ago, you can reasonably write off a portion of your trip as a business expense.

Conversely, if you go on your family vacation and decide to pop into the nearest Sandals at the last minute for a self-administered “tour” in the name of business activity, that is a serious foul in the eyes of the IRS. (We’ll get into scenarios later).

3. Will your business derive income from the trip? You can have the most un-fun, jam-packed business trip in the world. But if you don’t make a good-faith effort to do any follow-up (ahem, earn moolah) with all your great meetings and research, then this could raise a red flag to the IRS.

4. Is the business activity necessary to your business/niche? If your niche is Italy, it’s going to be tough to write off a trip to Hawaii if you’ve never booked that destination (and don’t plan on doing it any time soon).

5. Is the trip necessary to the business operations you’re conducting? Working away from your tax home doesn’t automatically qualify as a travel expense. To deduct travel expenses, the business activity must necessitate the trip.

For example, if I go visit a friend in Paris and spend three full days working on this blog post about travel expenses, I may not deduct my trip as a business expense because I could easily conduct these business operations from home. Major bummer (because who isn't inspired to write about travel expenses when they see the Arc de Triomphe?)

The same goes for travel agents. If you’re on a family vacation but you’re still booking trips and supporting your clients from afar, your travel expenses are not deductible as travel expenses 1 because the trip wasn’t required for that particular business activity.

At the end of the day, you need to rely on your common sense (or, better yet, the common sense of your CPA or accountant). Remember the golden rule: travel expenses must be reasonable and necessary to your business.

How do you decide what’s reasonable? The following scenarios will help provide a little perspective.

Business Travel Expense Scenarios for Travel Agents

When it comes to deducting any business travel expenses that are (in any way) attached to personal travel, the CPA/accountants I chatted with agreed to proceed with caution.

If you’re mixing personal and business travel, be clear about what days you spend working and document your meetings and business activity during those days.

As an example, here are a few scenarios by way of example. Please remember that these scenarios are just crib notes. They’re intended to help give you a lay of the land, not to advise you in any way shape, or form:

Scenario 1 (The Conference)

You fly to the annual ASTA conference on Tues. and stay through Fri. The entire time is scheduled with conference activities except for breakfasts, which you purchase every morning at the resort cafe and charge to your room. On Thurs. night after the conference is over, you take an Uber to meet your long-distance college friend for dinner and drinks. You fly out early Friday morning.

Travel expenses are entirely deductible except for the Uber rides (to and from) and dinner and drinks with your friend.

Scenario 2 (The FAM)

You’re invited to an escorted FAM in Hawaii. The FAM is 3 days, but you decide to take your family with you and extend your trip, tacking on a 7-day family vacation after your FAM. You stay at the same resort with your family as you did during the FAM.

Since your business operations necessitated the trip to Hawaii, you can write off 100% of your flight and transportation to and from the airport (so long as it’s reasonable). Why? Because you’d have to fly to and from Hawaii and transfer to and from the airport to conduct your business anyway.

Additionally, you can also deduct other travel expenses incurred while you were working (such as meals and incidentals). If you rented a car, you can prorate your rental fees according to what percentage of the time you used it for work (e.g. 30% for 3 of ten days of total cost may be deductible).

Scenario 3 (working on vacation part I)

You’re on a family vacation to Disney World for 5 days. You take a last-minute lunch meeting to meet a new property manager at a resort you often book. The rest of the time, you enjoy with your family, posting about your time together on your travel agency's social media.

None of this trip is deductible except for your meal with the property manager. Sad face.

Scenario 4 (working on vacation part II)

A baseball fanatic, you decide to go to Japan for the Japan Series. While you’re there, you bring work with you and spend three hours per day booking trips and supporting your traveling clients. The rest of the time, you watch baseball and explore Japan.

None of your travel expenses are deductible because your trip to Japan wasn’t necessary for the business operations you were conducting while there.

These scenarios are merely examples. I know that real-life scenarios are much more complicated. If you’re mixing personal and business travel, be clear about what days you spend working and document your meetings and business activity during those days.

At the end of the day, it’s easiest to document your business activity and track expenses if you keep your personal and business travel separate. And let’s be honest, it’s best for your work-life balance too! Ultimately, you need to ensure you’re doing your due diligence to record and document your trips. Guess what?! We have a few tools to help you do just that.

Pro Tips on Tracking & Documenting Your Business Travel Expenses

Entering your expenses on beautiful sheets is just part of the administrative fun of tracking travel expenses.

Beyond that cursory bookkeeping, you need to have receipts, journals, and other documentation to back up your travel expenses. Why?

If the IRS comes calling with an audit letter, you may need to provide your documentation to prove that your travel expenses were (wait for it) reasonable and necessary. To make things more exciting, the IRS can hit you up for explanations about travel you took years ago.

Get all the info you need: When it comes to big-picture travel expenses, make sure that the receipts have all the details necessary to satisfy the IRS.

Here’s what the IRS considers enough detail:

Destination Area of Travel
Date(s) You left for and returned from your trip
Number of days spent on business
Amount of expense(s)

Here are a few tips to make this process as painless as possible:

1. Track Your Cash for incidentals: This tip is from Jay: If you take out cash for tips (or other incidentals) from an ATM, the ATM receipt is not enough documentation. You should write down on your ATM receipt the date, location/service, and amount, for which you tipped if you want to take it as a deduction.

2. On meal receipts, write down who attended and what business you discussed: This will help you jog your memory if you ever need to provide further documentation for your expense.

3. For transportation expenses beyond going between the airport and hotel, write down where you’re going: When you’re taking the rideshare to the ASTA gala, write down the destination/event on your receipt.

4. Keep detailed journals/documentation of business you conduct during travel: This is especially important for “Grayland” travel. It’s a benefit for yourself as much as it is for the IRS. But after your trip, write down your actionable items that relate to how you will derive income from your trip.

Are you going to create a new marketing initiative based on the site you toured? Great. Are you going to follow up with future potential clients? Fabulous. Are you growing your list of supplier contacts to expand your book of business? Write down how you plan to follow up on your trip to grow your business.

Tips for Documenting Your Travel Expenses

The truth is that as a good business person, you'll have all this information at your fingertips. Really, it’s just a matter of corralling all that info into one place.

Pro Tips on Developing a Documentation System for your Travel expenses

Stephanie Cannon weighed in on the importance of developing a system to document your expenses. See her tip below:

It's not only crucial to track the various trip expenses but to also develop a documentation system. In this digital age, I use folders on my computer, 1 for the year, and multiple for each trip during that year. Inside each trip folder, I include a summary sheet (Excel) that lists out all of the transaction details for each expense with a note of what it was for. I then upload all of the appropriate receipts for safekeeping (and store any paper copies in a large envelope).

~ Stephanie Cannon (2022)

Want to see this in action? Join Stephanie for her (free) "Travel Advisor's Know Your Numbers Challenge." Her challenge is the runway into a more in-depth Bookkeeping Bootcamp for travel advisors, covering how to set up and complete their bookkeeping process on a routine basis, no matter what “tool” you decide to use.

How Long Do I Keep all this Fun Documentation?

The IRS is allowed to dredge up the past. So you want to hang on to all your tax documents. If you’ve been in the biz for a while, you probably have enough receipts to wallpaper your entire house.

So when exactly can you throw all the stuff away? The rule of thumb is to keep documentation for:

3 years from the date you filed your return or
7 years if you claim a loss

If alarm bells went off when you read “rule of thumb” in regard to taxes, then you’re really getting the spirit of this article! Don’t take it from me. Read the lengthier recommendation on the IRS site or [enter refrain] talk to your CPA.

Travel Expense Calculator & Tracker

We whipped up a few goodies to help you along your voyage of figuring out your travel expenses. Now that you know which of your travel expenses you can deduct, we have a nifty resource you can use to approximate how much of your trip you can write off. It's also a resource to help you document the purpose of your trips as well (in case you need to refresh your memory).

How does it work?

Enter your total deductible expenses
Document the purpose of your business travel
upload receipts

This means that all your travel documentation will be at your fingertips for bookkeeping purposes so if the IRS calls you and asks the purpose of that travel conference and FAM at an all-inclusive in Puerto Vallarta, then you have everything you need at your fingertips.

Here's a quick look at how the travel expense calculator works:

You give the travel expense calculator a gander. But know that, if you decide you want to copy and download the template for yourself or your business, you'll need to create a free Airtable account (essentially it's a spreadsheet on steroids). This tool will help calculate and track your travel expenses and provide the kind of documentation the IRS (or your bookkeeper) wants to see!

HAR's Tax Organizer

2. har tax organizer.

We're so excited about HAR's tax organizer that we're going to put the download in our article a second time! (In case we didn't have you convinced at the beginning of the article.

Now you know your actual travel expenses, and you can enter your tally! Hurray! But where do you put all this delectable information? That’s right, in your HAR Tax Organizer !

Now, if I may say so myself, HAR’s tax organizer is a thing of beauty. It’s a form where you calculate all your business expenses. That’s right, we’re talking waaaay beyond travel expenses here!

So download your form and give it a test run by entering your travel expenses.

Other Travel Expense Tools!

1. tracking apps (har uses expensify ).

The more you travel, the more impossible it will be to remember the Wheres? Whys? and What Fors? of your travel expenses. If you are overwhelmed at the thought of tracking all your expenses, stop everything and download an expense-tracking app.

I’m sure there are a ton of expense apps out there, and we’re not going to dig into different options here. HAR uses Expensify. It’s user-friendly and helps create reports very quickly.

What do you use? Tell us in the comments!

2. Per Diem Rate Calculator:

Per diem rates vary depending on where you're going (and what year it is). This is a nifty way of determining legitimate, standard per diem rates according to your destination. Remember, if you’re self-employed, you can only use the meal and incidental expenses (M&IE) per diem and you must still document all the expenses.

3. Accounting/ Bookkeeping Software

Below is a list of accounting software.

Quickbooks , Freshbooks , and Xero are great for smaller agencies or if you’re starting out. If you want a free option, you can use a Google Spreadsheet or Excel document. (HAR uses Quickbooks.)
TRAMS and Globalware are for large travel agencies and are travel-specific (unlike the above programs). For the average agency, these programs are not cost-effective.

If you're a die-hard DIY-er You can also use free resources such as Google spreadsheets or Excel sheets.

Thank Yous!

I can’t emphasize enough how little I knew about taxes before chatting with these amazing people: Stephanie Cannon, thank you for sharing your very rare travel-accounting hybrid knowledge with me, and for reviewing this article to help insure it provides the latest juicy gossip on tax regulations!

Jay Elstad has a ton of experience working with travel professionals. I called Jay during his BUSIEST season (mea culpa)! And you know what, he didn’t even get mad at me. In fact, he really went the extra mile to answer my questions and review this article.

Editor's Note: This article was first published on March 2nd, 2020. We update and republish it annually to include the latest information on travel expense deductions. The most current publish date is listed at the top of the article.

It’s important to note we’re talking about travel expenses only. You can still write off necessary office expenses you need to conduct business, such as phone calls, wifi, a portion of lodging used for your office, etc. ↩

About the Author

Mary Stein has been working as a writer and editor for Host Agency Reviews since 2016. She loves supporting travel advisors on their entrepreneurial journey and is inspired by their passion, tenacity, and creativity. Mary is also a mom, dog lover, fiction writer, hiker, and a Great British Bake Off superfan.

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Claiming a tax deduction for business travel expenses

You can claim a tax deduction for expenses you incur travelling for your business.

Last updated 19 June 2024

As a business owner, the general rule is that you can claim deductions for expenses if you or your employee are travelling for business purposes. A travel diary is:

compulsory for sole traders and partners in a partnership to record overnight business travel expenses
highly recommended for everyone else.

For a summary of this content in poster format, see Travel expenses (PDF 526KB) This link will download a file .

Expenses you can claim

Your business can claim a deduction for travel expenses related to your business, whether the travel is taken within a day, overnight, or for many nights.

Expenses you can claim include:

train, tram, bus, taxi, or ride-sourcing fares
car hire fees and the costs you incur (such as fuel, tolls and car parking) when using a hire car for business purposes
accommodation
meals, if you are away overnight.

To claim expenses for overnight travel, you must have a permanent home elsewhere and your business must require you to stay away from home overnight.

If you are entitled to goods and services tax (GST) input tax credits, you must claim your deduction in your income tax return at the GST exclusive amount.

Expenses you can't claim

You can only claim the business portion of business travel expenses. You must exclude any private expenses, such as:

a holiday or visit to family or friends that is combined with the business travel
the expenses associated with you or your employee taking a family member on the trip
souvenirs and gifts
sightseeing and entertainment
visas, passports or travel insurance
travel expenses that arise because you are relocating or living away from home
travel undertaken before you started running your business.
Claiming a tax deduction for motor vehicle expenses – information about business motor vehicle expenses and travelling to and from your places of business.

Media: Business deductions - Travel expenses: Tax basics for small business https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubfw7bqp External Link ( Duration: 01:23)

How to claim employee travel expenses

If your employees travel for your business, the business must actually pay for the travel expense to be able to claim it as a deduction. The business can pay for the expense by:

paying directly for the expense from the business account
paying a travel allowance to the employee
reimbursing the employee for their expenses.

Fringe benefits tax (FBT) may apply if your business pays for or reimburses your employees for their travel expenses. Certain exemptions and concessions may apply to reduce your FBT liability. For example, your business may not have an FBT liability if it reimburses an employee for their travel expenses to attend a work conference, which the employee would have been able to claim as an income tax deduction if you hadn't reimbursed them.

You will be liable for FBT if your employee extended their travel for private purposes and you reimburse the employee for these private costs. If your business provides benefits to your employees, you may need to obtain some records from the employee.

If you are the director of a company and the business pays for private portions of your travel expenses, there may also be Division 7A implications.

If you pay your employees a travel allowance or a living-away-from-home allowance, there are different considerations.

Travel diaries

Sole traders and partners in a partnership.

If you are a sole trader or a partner in a partnership and you travel for six or more consecutive nights, you must keep a travel diary or similar document before your travel ends, or as soon as possible afterwards. In your travel diary, record the detail of each business activity including:

what the activity was
the date and approximate time the business activity began
how long the business activity lasted
the name of the place where the business activity occurred.

Your travel diary can be in any format as long as it contains sufficient detail to justify what you are claiming.

Example 1: Rebecca

Rebecca owns a business as a sole trader landscape gardener. She is invited to exhibit at the Chelsea flower show in England. This involves six days of work representing her business at the show. After the show is finished, Rebecca spends some time sightseeing.

Rebecca’s son James joins her on her trip. James is not involved in the business and spends the days exploring London while Rebecca is at the Chelsea flower show.

As Rebecca is travelling for more than six nights, she keeps the below travel diary.

Travel diary for May:

Saturday 9 May – 10.00am flight Q13 to London (via Dubai)
Sunday 10 May – Arrive London 1.00pm local time. Bus to hotel in Chelsea 3.00pm
Monday 11 May – Rest day
Tuesday 12 May – Chelsea flower show set-up day from 9.00am
Wednesday 13 May – Chelsea flower show day 1
Thursday 14 May – Chelsea flower show day 2
Friday 15 May – Chelsea flower show day 3
Saturday 16 May – Chelsea flower show day 4
Sunday 17 May – Chelsea flower show day 5, ends 5.00pm
Monday 18 May – Sightseeing in London
Tuesday 19 May – Sightseeing day trip to Oxford
Wednesday 20 May – Bus to airport. Flight home Q23 6.00pm from London, arrive 10.00pm local time.

This shows that Rebecca travelled for 12 days. She spent the majority of the time on business related activities and took the opportunity to do some sightseeing while in London for two extra days. Rebecca can only claim deductions for the business-related portion of her travel.

Rebecca can claim:

the return airfare to London (which does not have to be separated out as the primary purpose of her travel is for business, the sightseeing was incidental)
her bus fares to and from the airport
the costs associated with working at the Chelsea flower show including the exhibitors fee and transport to and from the location from her hotel
Rebecca’s accommodation in Chelsea up to and including 17 May
meals and incidental costs on the days she attended the Chelsea flower show.

Rebecca cannot claim:

accommodation, meals or transport expenses on the days noted for sightseeing
additional private costs from the whole of her time away (such as souvenirs)
costs of visas, passports or travel insurance
any of James’ expenses (such as his airfares, the cost of his meals or the cost of an extra hotel room for James).

Example 2: Noah

Noah owns a business as a sole trader interior designer and decorator. He lives and works in Perth. A new customer has asked him to design and decorate her home in Broome. This will take two weeks to complete.

Noah flies to Broome on Sunday evening and returns to Perth two weeks later. On the weekend he does some sightseeing and catches up with friends. He keeps the following diary:

Sunday: Fly to Broome (depart 4.00pm, arrive 6.30pm)
Monday 2 September: Purchase decorating supplies 9.00am–10.30am. Working at client’s house 10.45am – 4.00pm
Tuesday 3 – Friday 6 September: Working at client’s house 7.30am to 4.00pm
Saturday: Day trip to Horizontal Falls. Dinner with Pam and Geoff
Sunday: Sightseeing around Broome
Monday 9 – Friday 13 September: Working 7.30am to 4.00pm at client’s house
Saturday: return flight to Perth (depart 10.00am, arrive 12.30pm).

Noah can claim:

his return airfare to Broome and taxi to his hotel and from hotel to airport
accommodation in Broome for all nights (as the weekend in between was incidental and the primary purpose of travel was for business)
costs of undertaking his work in Broome (such as hire of tools)
meals and incidental costs of his work.

Noah cannot claim his private expenses, including:

the cost of the sightseeing he does on the weekend
the dinner he has with friends.

Companies and trusts

If your business is a company or a trust, we highly recommend you use a travel diary as it will help you work out the proportion of the travel that was for private purposes.

Records for business travel expenses

Keep records for five years to substantiate your business travel expenses, including:

tax invoices
boarding passes
travel diaries
details of how you worked out the private portion of expenses.

If you’re a sole trader with simple tax affairs, you can use the myDeductions tool in the ATO app to record your business-related expenses.

Expense fraud is a particular issue with dishonest employees able to exploit management inefficiencies. With it often taking weeks before travel expenses are processed, fabricated, and exaggerated, travel costs can easily go undetected.

It’s a challenge where digital technology is providing to be a powerful ally, providing more effective ways to streamline and police overseas costs. Here’s a look at a handful of ways that you can make sure your employees aren't making those little extra purchases.

Have a policy in place

A surprising number of businesses don’t have an expense policy that covers overseas travel. This tends to be the case with smaller businesses where foreign travel is likely to be the exception rather than the norm.

An effective expense policy should cover both domestic and overseas travel - creating clear guidelines on exactly what can be claimed, and the processes for doing so. It needs to be fair, accurate, and accessible.

A cloud-based management system allows policy reminders to be delivered in real-time via on-screen notifications. It can also automatically alert a finance team whenever costs breach the set limits.

Use expense management apps

The smartphone has become an essential tool for business travelers. It has transformed the way employees are able to manage and record their expenses while on an overseas trip.

Webexpenses provides users with a powerful expense management app . It uses ACR (Automatic Character Recognition) scanning all paper receipts to be converted into a digital report in less than 20 seconds.

This streamlined process means accounts can be updated as and when costs are incurred and it removes the dreaded and painful post-trip task of having to manually process a bundle of foreign receipts.

Try to plan ahead

The more business travel arrangements can be planned ahead, the lower costs are liable to be. Research suggests that booking a business trip 28 days in advance results in 44.7 percent lower costs than if it had been arranged three days before... that's a lot of saving.

The cost advantages of planning ahead apply to all of the main expenses relating to business travel - flights, hotels and rail trips. So allowing employees to leave travel bookings to the last minute can significantly bump up costs.

While this needs to be managed, the additional costs need to be balanced against the advantages delivered by a flexible and agile approach to business travel.

Control currency conversion

Having to deal with constantly fluctuating exchange rates is a particular challenge when handling overseas expenses. When currency conversions are being done manually, it makes the processing of reports a slow and error-prone task for finance teams.

It’s one headache that can be effectively removed with the use of a digital expense management software. Webexpenses is able to automate the handling of multiple currencies.

Accurate currency conversions are done based on the exchange rate at the time that the cost was incurred. It creates a simple and fuss-free way to manage a troublesome area of expense management.

Stay on top of tax

Trying to figure out the tax rules for different countries is a daunting prospect. But avoiding this area means that many companies are missing out on expense costs that can be legitimately reclaimed.

Recovering these costs is made a whole lot easier when a digital management system is being used. This provides easy access to the accurate data that’s required by the tax authorities.

It also allows expense information to be easily shared with agencies that specialise in overseas VAT reclamation. It gives companies the option of recovering costs while avoiding the complexities of international tax laws that nobody wants to get wrapped up in.

If you're interested in making sure your employees aren't overspending on their business trips away by implementing an automated system, feel free to contact us here or request a demo to see how we can help you.

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We’re living in a global economy, and if you want to grow your business fast, foreign clients can be a great source of income, as well as a great excuse to see the world. With the increase in people becoming self-employed and online work becoming the norm, there’s never been greater potential to source work from overseas .

Sometimes a big business deal needs a personal touch, and that usually means hopping on a plane to shake some hands in foreign lands. Most business owners will have their domestic business travel sussed – save your taxi receipts, claim your business miles etc. – but international business travel has a few quirks you need to know about.

The same rules apply

HMRC’s house rules for claiming business expenses – that they must be “wholly and exclusively” for business purposes – apply wherever you are in the world.

The requirement to keep proof of purchase is also a worldwide one, so be sure to look up “Can I have a receipt, please?” in your phrase book before hopping in that taxi in Shanghai.

Foreign travel will provide a great opportunity to let your hair down and enjoy a few sangrias by the pool – but the taxman never takes holidays, and if anything, HMRC’s eligibility requirements for allowable expenses abroad are even more strict than at home.

Don’t mix business with leisure

HMRC’s concept of “duality” means any whiff of personal benefit will render foreign travel inadmissible as a business expense.

Want to delay your flight home by a few days so you can take in the historic gothic architecture of Bremen after the 7th International Offshore Wind Power Substations Conference ? Nein! (No) that would mean you can’t claim it back.

Want to bring your spouse along to Stockholm so they can enjoy the hotel gym while you go to Wikimania ? No longer an allowable expense, kompis (for the non-Swedish speaker that means buddy in Swedish!).

It’s not impossible to enjoy a bit of leisure time when travelling overseas for business, but HMRC’s rules are strict and there has to be a clear divider when you close your laptop and open up your Lonely Planet.

Our hapless turbine engineer travelling to Bremen could book outward and return tickets separately, and the conference accommodation and the leisure days as two distinct bookings. They’d then claim for the outward flight and the conference accommodation, and pay for the rest out of their own pocket. Sehr einfach (very easy)!

The enthusiastic Wikipedian travelling to Sweden? Book the spouse’s travel separately, put them up in a different hotel and they’re bra (good!).

A tremendous hassle, but those are HMRC’s rules. Generally speaking, if an invoice , bill or receipt has spending for personal benefit on it, you can’t claim it back.

Spending money

Once you’ve actually arrived at your destination, HMRC’s rules on what you can claim are a little more straightforward.

You can treat foreign expenses exactly as you’d treat domestic spending – just keep the receipt and claim the whole amount back.

If you lose your receipts or want to keep things simple, the taxman has a handy (if huge) list of subsistence rates for every country on Earth , including major cities. It’s important to note these rates aren’t allowances – you can only claim the amounts prescribed by HMRC if you actually incur expenses up to that amount.

If you travel regularly, you’re probably used to juggling exchange rates, and they can make claiming expenses tricky. A €30 taxi ride could cost £20 when you take it, £21 when it comes out of your bank account, and £22 when you come to claim the expense in your accounting software. If in doubt, always use the amount that left your bank account – it’ll make your bookkeeping that much simpler.

It’s almost impossible to go on holiday and not return with a bag full of tourist tat. If you plan to purchase something a little more substantial than a fridge magnet, you can take advantage of lower prices abroad to purchase assets for your business – as long as you pay the correct taxes.

Many countries will allow foreign visitors to reclaim sales tax, either when they leave the country or when they buy (many large malls will have tax reclaim counters). If you purchase a business asset – for example a camera, laptop or some other sizeable piece of equipment – you can reclaim the sales tax. You’ll need to declare the asset when you return to the UK and pay any applicable VAT , but if you’re Standard VAT registered you can reclaim that on your next return.

You’ll save your business a tidy sum, and your new purchase will probably prove much more useful than a bottle of Absolut Vodka and a Dala horse .

If you’re looking for more information on what expenses you can claim then our articles “What expenses can I claim as a limited company?” or “What expenses can I claim as a sole trader?” should be just what you need. Alternatively, for freelancers who prefer their home comforts, we've got a guide on working from home tax relief too.

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How Do Business Travel Expenses Work?

Employers Pay for Company Business Travel in Several Ways

Employees on Long-Term Assignments
Employers Pay for Travel Expenses?
Know Your Travel Expense Policies
Using Travel As an Employee Incentive

Travel expenses are expenditures that an employee makes while traveling on company business. Company business can include conferences, exhibitions, business meetings, client and customer meetings, job fairs, training sessions, and sales calls, for example.

Expenses can include lodging, personal car mileage reimbursement , flights, ground transportation, tips to bellhops, meals, tips to waiters, room service, and other incidental expenses an employee might experience while on the road.

Expenditures that an organization will reimburse are found in the company’s business travel policy. Become familiar with your company’s policy because expenses, as varied as dry cleaning and gym membership, can be covered for employees on extended trips in addition to the expected travel costs, housing, and meals.

Travel Expenditures for Employees on Long-Term Assignments

When using long-term housing facilities for traveling employees, many employers also supply opportunities for the employee's family to visit when the employee is traveling extensively on business. When an employee is assigned to another company location on a temporary basis, employers will sometimes pay for the family of the employee to visit at prescribed time intervals. This keeps the burden of remote work from affecting family relationships adversely.

Employers seek to provide options of value for employees who are away from home and family for extended periods of time. You need to take advantage of any travel privileges that your employer offers to build employee morale and dedication.

Client entertainment at conferences, on sales calls, and on-site visits is another reimbursable expense, but know your company’s policies so you don’t exceed the limits that are placed on entertainment costs. For example, companies frequently place a cap on what you can spend on taking a client to dinner.

Know also your company's policy on the awarding of airline miles credit. It varies. Some companies allow employees to accrue airline travel miles that they then can use for personal family travel. Others accrue a bank of travel miles that they use to cover additional employee business travel. Again, knowing your company's policies is crucial.

How Do Employers Pay for Employee Travel Expenses?

Typically, organizations pay employee travel expenses in these three ways.

Company credit cards

Credit cards are issued to employees who must travel frequently for business. Employees may charge most of the expenses they incur on a business trip to the company credit card. For reimbursement of incidentals such as tips and fast food, employees will need to fill out an expense report when they return from their trip.

Charge cards are convenient for employees as they do not have to come up with the cash to pay for business expenses prior to reimbursement. Become knowledgeable about your company's policies, though; you may still need to turn in receipts and other supporting documentation even when you charge these expenses to a credit card.

Organizations without employee company credit cards require employees to fill out an expense reimbursement report for each expenditure while the employee is on the road. They generally require receipts and some level of justification for each expense.

Only rarely would an organization ask employees to pay for the big-ticket items such as airfare and seek reimbursement later. A company purchase order or company credit card will pay for large expenses upfront. But employees are often required to pay cash out-of-pocket for day-to-day travel expenses that are later reimbursed.

A per diem is a daily allowance of a certain amount of money that an employee is given to cover all expenses. The employee is responsible for making sound travel expense choices within the parameters of the amount of money that he or she is allotted daily.

Some companies pay directly for transportation and housing but give traveling employees a per diem for all other expenses including meals and ground transportation. Employees have been known to underspend on expenses to keep the extra cash from the per diem. Companies generally allow this.

Know Your Employer's Travel Expense Policies

Employees who travel for business are advised to stay up-to-date on company travel policies and costs covered for reimbursement. Expenses that fall outside of the policies are generally not reimbursed or covered.

Receipts are required by most companies except for those that pay a per diem. Your company also likely has a form that they expect employees to use for turning in travel expenses.

To stay on top of reimbursable expenses, employees are often given a deadline by which they need to file an expense report and turn in applicable receipts. The finance department will have guidelines that help it stay current.

If you have questions about what constitutes appropriate travel expenses in your organization, check with your manager and the Human Resources department. You don't want to spend the money and receive a surprise later.

Employers Are Using Travel As an Employee Incentive

Some employers have started to use travel as an employee incentive. When employees are rewarded with travel by their company for meeting a goal, the incentive travel will increase both employee loyalty and workplace engagement.

Tax Rules When Your Business Trip Involves a Passport

View All | August 2016 Newsletter Edition

I f you travel a lot on business, you may make some international trips — as well as trips within the United States. When traveling abroad, you may want to add a few extra days to a trip for relaxing and sightseeing.

Keep in mind that the tax rules for foreign business travel are different from those for domestic travel.

Whenever you spend any time vacationing on a foreign business trip, the general rule says you must allocate all your travel expenses –- including transportation costs — between business and personal days.

The good news: You might be able to take advantage of two loopholes and deduct all of your foreign transportation expenses despite what the general rule says.

Here’s what you need to know.

Take Advantage of the “One-Week Rule.” As long as your business trip lasts one week or less, you can automatically deduct 100 percent of transportation costs (including plane fare and cabs to and from airports). This is true even when you actually spend most of your time vacationing. Solely for purposes of figuring out if you qualify for the one-week loophole, don’t count the day you leave. But do count the day you return.

Of course, you can also deduct out-of-pocket daily living expenses (including hotels, cabs, tips and 50 percent of meals) for all business days while you’re out of the country. You cannot deduct your daily living costs for vacation days.

Fortunately, the definition of a business day is pretty liberal. For example:

Travel days count.
Weekends and holidays falling between business days count.
You can include intervening weekdays between business days.
You can also count any standby days when your presence is physically required for business reasons — whether or not you are actually called upon to work on those days.
Finally, you’re allowed to count days you intend to work but can’t for reasons beyond your control (for example, transportation difficulties caused by weather or a terrorist incident).

As you can see, these guidelines are rather taxpayer-friendly. But keep in mind that the main reason for your trip must still be for business. Otherwise, none of your transportation costs are deductible.

Take Advantage of the “25-Percent Rule.” Obviously, some foreign business trips last more than a week. You might be able to take advantage of another loophole — the 25-percent rule. If you qualify, you can once again deduct 100 percent of your transportation costs and all your daily out-of-pocket living expenses for business days (subject to the 50 percent limitation on meals).

The trick here is to make sure you spend less than 25 percent of your total days vacationing. For this purpose, you can count the day of departure and the day of return as business days. You can also count all the other types of business days listed earlier. In many cases, it’s easy to meet the 25-percent rule.

Consult with your tax adviser if you have any questions about business travel deductions.

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Expenses and employee benefits

Expenses and benefits: travel and subsistence

As an employer paying your employees’ travel costs, you have certain tax, National Insurance and reporting obligations.

This includes costs for:

providing travel
reimbursing travel
accommodation (if your employee needs to stay away overnight)
meals and other ‘subsistence’ while travelling

Subsistence includes meals and any other necessary costs of travelling, for example parking charges, tolls, congestion charges or business phone calls.

There are different rules for reporting expenses relating to public transport .

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Here’s what taxpayers need to know about business related travel deductions

Here are some details about these valuable deductions that all business travelers should know.

Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. The travel period must be substantially longer than an ordinary day's work and a need for sleep or rest to meet the demands the work while away.

Travel expenses must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes.

Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year.

Travel expenses for conventions are deductible if attendance benefits the business and there are special rules for conventions held outside North America .

Deductible travel expenses while away from home include the costs of:

Travel by airplane, train, bus or car between your home and your business destination.
Fares for taxis or other types of transportation between an airport or train station to a hotel, from a hotel to a work location.
Shipping of baggage and sample or display material between regular and temporary work locations.
Using a personally owned car for business which can include an increase in mileage rates .
Lodging and non-entertainment-related meals .
Dry cleaning and laundry.
Business calls and communication.
Tips paid for services related to any of these expenses.
Other similar ordinary and necessary expenses related to the business travel.

Self-employed or farmers with travel deductions

Those who are self-employed can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) .
Farmers can use Schedule F (Form 1040), Profit or Loss From Farming .

Travel deductions for the National Guard or military reserves

National Guard or military reserve servicemembers can claim a deduction for unreimbursed travel expenses paid during the performance of their duty .

Recordkeeping

Well-organized records make it easier to prepare a tax return. Keep records, such as receipts, canceled checks, and other documents that support a deduction.

More information:

Publication 463, Travel, Gift, and Car Expenses
IRS updates per diem guidance for business travelers and their employers

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Travel Study Abroad: Tax-Deductible?

Last updated Jun 25, 2024
Difficulty Advanced

Category Travel

can travel study abroad be deducted from taxes

Studying abroad can be an enriching experience, offering students the chance to immerse themselves in a new culture while pursuing their academic goals. However, it is essential to consider the financial implications, particularly when it comes to taxes. While travel costs for study abroad programs are generally not eligible for tax deductions, there are opportunities to reduce your tax burden. For instance, if you are enrolled in a qualifying educational institution, you may be able to claim certain deductions and credits, such as the American Opportunity Credit or the Lifetime Learning Credit, to offset your expenses. Additionally, if you are earning an income while studying abroad, you may be able to take advantage of the foreign-earned income exclusion and claim a foreign tax credit on your US tax return. Understanding these tax implications can help you make informed decisions and maximise your financial benefits while studying overseas.

What You'll Learn

Students can deduct some educational expenses, but not travel expenses, the foreign educational institution must participate in the u.s. department of education's federal student aid (fsa) programs, students can claim the american opportunity credit or the lifetime learning credit, the student's parent can claim school expenses but not travel costs, business people may be able to deduct trips if they are employees or contractors.

Students or their parents may be able to deduct some educational expenses from their taxes, but travel expenses are not eligible for the education credit. If a student is enrolled at an eligible university, their tuition and costs are eligible for tax credits. An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution that can participate in a student aid program administered by the US Department of Education. This includes virtually all accredited public, nonprofit, and proprietary postsecondary institutions.

There are two main continuing tax deductions available for Americans abroad: the American Opportunity Credit and the Lifetime Learning Credit. The American Opportunity Credit covers 100% of the first $2,000 in adjusted qualified education expenses paid and 25% of any excess, up to a cap of $500. This credit is partially refundable, and eligible taxpayers can reduce their tax liability by a dollar-for-dollar amount based on the amount they can claim. The Lifetime Learning Credit is another tax benefit that provides a dollar-for-dollar credit for qualifying education expenses.

The tuition portion of a study abroad program is tax-deductible, less any financial aid that is awarded. For example, if a student receives a $1,500 scholarship for a program with tuition of $10,250, the amount that can be claimed is reduced to $8,750.

Travel Days: Relaxed Mind, Happy Journey

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The U.S. Department of Education's Federal Student Aid (FSA) programs are a crucial source of financial assistance for students pursuing higher education. These programs provide aid in the form of grants, loans, and work-study funds to help students cover the costs of their education, including tuition, fees, room and board, books, supplies, and transportation. To be eligible for this aid, students must attend an accredited institution that participates in the FSA programs.

When it comes to studying abroad, not all foreign educational institutions participate in the FSA programs. Only some institutions located outside the United States choose to take part. This participation is essential for students who wish to receive federal financial aid to support their studies overseas. The eligibility criteria for these institutions are stringent and clearly defined by the Department of Education.

The foreign educational institution must be accredited and authorised to provide postsecondary education in their respective country. This accreditation ensures that the institution meets specific academic and administrative standards, guaranteeing the quality of education offered to students. Additionally, the institution must offer eligible programs that lead to a degree, certificate, or other recognised educational credential. These programs must be at least one academic year in length and cannot solely consist of distance or correspondence education.

It is worth noting that even if a foreign educational institution participates in the FSA programs, travel costs associated with studying abroad are generally not eligible for the education credit. However, tuition and other related expenses may still be covered under the FSA programs. Students interested in studying abroad should carefully review the eligibility requirements and consult with their chosen institution to understand their specific situation.

The Ultimate Guide to How Football Teams Travel for Games

American Opportunity Credit

The American Opportunity Tax Credit (AOTC) is a tax credit to help pay for education expenses for the first four years of education after high school. Eligible students can receive a maximum annual credit of $2,500 per student, with 40% or $1,000 refundable if they owe no tax. The AOTC covers 100% of the first $2,000 in adjusted qualified education expenses paid and 25% of any excess beyond that, up to a cap of $500.

To be eligible for the AOTC, the student must:

Be pursuing a degree or other recognised education credential.
Be enrolled at least half-time for at least one academic period beginning in the tax year.
Not have finished the first four years of higher education at the beginning of the tax year.
Not have claimed the AOTC or the former Hope Credit for more than four tax years.
Not have a felony drug conviction at the end of the tax year.

The AOTC is subject to income limitations. To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 or less for married filing jointly). You will receive a reduced amount of credit if your MAGI is over $80,000 but less than $90,000 ($160,000-$180,000 for married filing jointly). You cannot claim the credit if your MAGI is over $90,000 ($180,000 for joint filers).

Lifetime Learning Credit

The Lifetime Learning Credit (LLC) is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. The LLC can help pay for undergraduate, graduate and professional degree courses, including courses to acquire or improve job skills. There is no limit on the number of years you can claim the credit, and it is worth up to $2,000 per tax return.

To claim the LLC, you must meet the following requirements:

You, your dependent or a third party pay qualified education expenses for higher education.
You, your dependent or a third party pay the education expenses for an eligible student enrolled at an eligible educational institution.
The eligible student is yourself, your spouse or a dependent you listed on your tax return.

The student must also meet the following criteria:

Be enrolled or taking courses at an eligible educational institution.
Be taking a higher education course or courses to get a degree or other recognised education credential or to get or improve job skills.
Be enrolled for at least one academic period beginning in the tax year.

The LLC is also subject to income limitations. For the 2023 tax year, the amount of your LLC is gradually reduced (phased out) if your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). You can’t claim the credit if your MAGI is $90,000 or more ($180,000 or more if you file a joint return).

Travelling Safely: Flying While 10 Weeks Pregnant

If you are a parent whose child is studying abroad, you may be able to claim their school expenses for tax deductions. However, it's important to note that travel costs are not eligible for these deductions. Here's a more detailed explanation:

As a parent, you can claim your child as a dependent on your tax return if they meet certain criteria. If your child is studying abroad and you are still supporting them financially, you may be able to include their school expenses in your deductions. This typically applies if your child is enrolled in a study abroad program through their school or university.

The eligibility criteria for claiming school expenses vary by country and specific tax regulations. In the United States, for example, eligible educational institutions include colleges, universities, vocational schools, or other postsecondary institutions that participate in federal student aid programs administered by the U.S. Department of Education.

While tuition and other direct educational costs are often eligible for tax deductions or credits, travel costs associated with studying abroad are generally not deductible. This means that expenses such as airfare, room and board, and transportation are not considered qualified educational expenses.

However, it's worth noting that some study abroad programs may have partnerships with educational institutions that allow a portion of the program fee to be tax-deductible as tuition. This can vary depending on the specific program and its affiliations.

Additionally, there are other tax benefits that students or their parents may be able to take advantage of, such as the American Opportunity Credit and the Lifetime Learning Credit in the U.S., which offer tax credits for qualifying education expenses. These credits can help offset the cost of higher education, but they have specific eligibility requirements that must be met.

It's always a good idea to consult with a tax professional or advisor to understand the specific rules and regulations that apply to your situation and to ensure you're claiming all the deductions and credits you're entitled to.

Top Destinations to Travel with a Valid American Visa

Business people may be able to deduct their travel expenses from their taxes if they are employees or contractors. The IRS has specific guidelines for determining what counts as business travel. For a trip to qualify as a business trip, it must be an "ordinary and necessary" expense and take place away from the individual's "tax home".

An "ordinary and necessary" expense is one that makes sense for the individual's industry and is taken for the purpose of carrying out business activities. For example, if an individual works in Milwaukee during the week but lives with their family in Chicago, Milwaukee is their "tax home", and travel expenses to and from Chicago would not qualify for deduction. However, if the same individual travels to Zurich for nine days for a seven-day conference and two days of vacation, the trip would still count as "entirely for business" as the two days of vacation are less than 25% of the total time spent in Zurich.

Additionally, the trip should take the individual away from their home base, typically considered to be 100 miles or a two-hour drive. The individual should also be working regular hours while on the trip, although personal time in the evenings and on weekends is allowed. The trip should also last less than a year, as anything longer is considered indefinite and cannot be deducted.

Deductible travel expenses include transportation costs, such as airplane, train, bus, or car travel, as well as baggage fees and rides to and from the airport. Lodging expenses, such as hotel or Airbnb stays, are also deductible, as are meals and communication expenses. It is important to note that only 50% of meal costs are typically deductible, except for meals at restaurants in 2021 and 2022, which were 100% deductible.

Business people who are self-employed can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship). Those who are farmers can use Schedule F (Form 1040), Profit or Loss From Farming.

Travel to London on May 17: A Guide to Exploring the UK Capital

Frequently asked questions.

Travel costs are not eligible for the education credit. However, if your dependent is studying at an eligible university, their tuition and other costs are still eligible.

The American Opportunity Credit gives taxpayers a tax credit to cover qualifying education expenses. Eligible taxpayers can reduce their tax liability by a dollar-for-dollar amount based on the amount they can claim under the credit.

The Lifetime Learning Credit is a continuing education tax deduction for Americans abroad. Like the American Opportunity Credit, this tax benefit provides a dollar-for-dollar credit for qualifying education expenses.

If you are a United States citizen or resident alien living and working abroad, you may be able to exclude all or part of your foreign salary or wages from your income when filing your U.S. federal tax return. The foreign-earned income exclusion is $120,000 for 2023.

If you are living in a foreign country when your tax return is due, you may be allowed a two-month extension until June 15 to file your tax return.

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What does modern business travel look like?

The face of corporate travel is changing, with several key trends impacting travel spend.

Live event attendance is on the rise as employees and employers alike seek out industry events to enhance their career development. It was the top driver of increased travel spend in 2023, according to Deloitte’s 2023 corporate travel study , a survey of more than 330 travel managers and executives with travel-budget oversight, including 106 U.S.-based respondents. This trend is expected to continue, with more than half of respondents saying they expected industry events to increase their travel spend in 2024.

In terms of how and when employees travel, flexibility is key. Day-return trips – where employees fly to their destination and return on the same day – have declined, as employees increasingly seek to attend to their well-being with extended travel stays. TravelPerk reports day-return flights made up just 9% of their bookings in 2023, down from 19% in 2019. As a result, employers may face pressure to increase their travel spend to accommodate more overnight stays.

Finally, employees tend to crave more comfortable accommodations, driving up travel costs. Half of the decision-makers included in Deloitte’s survey cited employees’ luxury expectations – including business class travel – as a factor that increased their travel spend in 2023. Also, as employees seek more flexibility, including being able to modify bookings mid-trip and choose lodging like rental homes, employers may need to increase their spend and offer additional options.

Flexible travel policies and simplified expense reporting

Creating personalized travel experiences starts at home, with travel and expense policies that allow employees to book flights and accommodations to meet their varying needs.

For many organizations, this has meant expanding the accommodations included in their corporate travel policies. Policies that included non-hotel accommodations, for example, reached a tipping point in 2023, according to Deloitte’s survey. Nearly half (45%) of U.S. companies now include non-hotel lodging in their corporate travel bookings – a fivefold increase year-over-year. Just 10% of respondents said their company does not reimburse for non-hotel accommodation, down from roughly 50% year-over-year.

Leaders will also seek opportunities to simplify expense reporting and enhance the employee experience. Business travelers cited expense reporting as their most pressing pain point in the April 2023 Business Travel News’ survey , signaling a growing demand for seamless, centralized payment experiences.

Creating personalized corporate travel experiences

Here are four strategies to consider as you update your corporate travel policy.

1. Leverage technology to facilitate flexible booking.

Today’s employees crave flights and accommodations tailored to their needs, an area where technology can excel. Machine learning algorithms can suggest compliant flights and accommodations matched to an employee’s preferences or use case, as well as accommodate last-minute itinerary changes. It can also help employees find lower-cost bookings to help manage travel costs.

2. Offer a range of accommodations.

As employees increasingly seek out non-traditional accommodations for corporate travel, you can look for opportunities to offer a broader choice in accommodations while managing expenses. You can consider negotiating agreements with short-term rental companies, for example, or maintaining rental homes in common travel destinations.

3. Create frictionless payment experiences.

You can consider finding centralized payment solutions that simplify the expense process. Trip-specific travel cards, for example, can be added to employees’ digital wallets for easy payment during travel, while also offering guidance on travel policy compliance and insights into travel spend.

4. Offer personal travel benefits as a perk.

The opportunity to travel can be a motivator for employees, and employers can make it even better with membership rewards. You can consider selecting travel cards with built-in personal point benefit systems to allow employees to earn rewards for their business travel, such as gift cards, shopping perks and travel rewards.

5. Use data as your guide.

The right technologies and solutions don’t just help create personalized experiences for employees, but they also provide data that can offer organization-wide insights. You can use data to track travel trends and preferences across your organization, including unmet needs or areas of noncompliance that could be addressed with updated travel policies.

The Takeaway

Corporate business travel can play an important role in the employee experience. As employees increasingly seek out tailored travel experiences suited to their preferences and use cases, organizations have an opportunity to stand out with flexible travel policies. Doing this well can require leveraging the right solutions, including technology and payment solutions, to provide employees with a range of booking options while also managing travel costs.

Learn more about American Express’s suite of supplier payment and corporate T&E solutions here .

The role of life insurance

How much life insurance do i need.

Assessing your financial situation

Methods for life insurance coverage calculation

Reviewing and updating life insurance coverage, calculating life insurance faqs, how much life insurance do you need.

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Many Americans don't have life insurance, and half of those that do don't have enough.
Online life insurance calculators can help calculate how much life insurance you need.
For comprehensive coverage, speak with a financial advisor, accountant, and estate planning attorney.
Compare life insurance quotes with Policygenius .

Many Americans don't have life insurance, and half of those who do, don't have enough. According to a study from Global Atlantic Financial Group , 43% of Americans don't have life insurance. According to Insure , half of Americans who do have life insurance are underinsured, meaning their death benefit would not cover expenses like mortgage, college, food, debts, and clothing for dependents in the event of their death.

If you have employer-provided group life insurance through your job, note that those policies will end if you retire, are laid off, or are terminated. That is why it is best to have a personal life insurance policy as well.

The best option for determining how much life insurance you need is to speak with a financial professional. However, if you aren't ready to make a call yet, online life insurance calculators can help give you estimates as a starting point.

The goal of life insurance is to ease the burden on your loved ones after your loss—to cover the mortgage, education, and other expenses. It's important to carry an adequate amount of protection so your dependents are fully covered if you pass away.

You'll probably want to get as much life insurance as you can comfortably afford each month. If it would be a struggle to make your premium payments, it's probably too much for you.

Business Insider created three sample scenarios to estimate life insurance needs for people living in Brooklyn, Dallas, and Denver using SmartAsset's life insurance calculator .

Each calculation was based on the following assumptions: a 35-year-old with two kids and a working spouse, with an annual salary of $60,000, owns a median-priced home in their city, plans to pay for children's college tuition at an out-of-state public institution, and has savings and investments.

The charts below show the estimated life insurance policy needed for five different income levels with the above assumptions:

Assessing your financial situation

Income replacement needs.

Life insurance replaces your income so the people who rely on you can maintain their standard of living. It covers day-to-day expenses like rent payments, groceries, transportation, and other essential costs.

Although life insurance is widely used to replace income, life insurance for non-income earners may also be as essential. For example, life insurance can cover childcare and household services that a stay-at-home parent would've ordinarily taken care of before they passed away.

Debt and final expenses

An unexpected (or expected in the case of terminal illness) death makes handling debt difficult for those who share financial liabilities with you. Life insurance provides a death benefit to cover outstanding obligations if you were to die.

Life insurance can also cover end-of-life expenses like your funeral service and burial or cremation costs so your loved ones can focus on grieving your passing.

Future financial obligations

In your life insurance calculations, you'll also want to factor in future financial obligations. For example, if you have children, you may want to ensure they have funds for post-secondary education.

10 to 15 times your annual income

When selecting your death benefit amount, the rule of thumb is to select 10 times your annual income. For example, if you make $75,000 per year, you would purchase a life insurance policy for $750,000 to $1,125,000. It is not uncommon for people to get $1 million in life insurance.

If you have children, you may also want to factor in about $100,000 to $150,000 of post-secondary education coverage for each child.

Multiplying your income gives you a rough estimate of how much life insurance you should purchase. You can use it as a starting point, but there are more accurate ways to determine the amount you need.

The DIME formula

The DIME is a more comprehensive method of calculating your coverage needs. DIME entails adding up the following components of your finances:

Debt: Calculate the total of all your debt (e.g. loans, credit cards, medical bills, etc.), excluding your mortgage. You may also want to include costs for end-of-life expenses.
Income: Multiply your income by how many years your beneficiaries will likely need it. The Guardian suggests a good place to start is multiplying your income by the number of years until your youngest child graduates high school. However, this amount may be larger if you have lifelong dependents.
Mortgage: Check your statements to find the outstanding balance of your mortgage. If you have a second mortgage or HELOC (Home Equity Line of Credit) on your home, be sure to include that in your calculations.
Education : If you have children, anticipate spending upwards of $100k to $150k for post-secondary education for each child.

After adding those up, subtract any current savings or life insurance policies you already carry.

Using an online calculator

You can use online calculators to get an estimate of how much life insurance you will need. Nonprofit organization Life Happens, for instance, offers an online life insurance calculator that asks a few questions so you can get an estimate of the amount of life insurance coverage you may need.

An online calculator doesn't replace the comprehensive advice you would receive from a financial advisor who would look at your financial situation, goals, and estate planning, says Maria Roloff, a wealth advisor at Northwestern Mutual Insurance . However, it will give you an idea of what to expect when you speak with life insurance specialists.

Consulting a financial professional

When considering life insurance, it is wise to consult a financial advisor, accountant, and estate planning attorney to make sure you have the best life insurance coverage for your goals and budget. Your life insurance needs will change as you age and must consider children, marriage, divorce, retirement, and caring for aging parents.

A comprehensive assessment will include whether you need long-term care life insurance, disability insurance, or a combination of permanent and term life insurance . Find someone you trust with knowledge of the different types of life insurance products and a background in estate planning. Business Insider recommends following these steps to find a financial planner.

You can find our guide on the best term life insurance companies here.

Your life insurance needs will fluctuate as your financial and individual situation does. Regular reviews ensure that your coverage amounts remain accurate over time and you're not overpaying for excessive coverage. For example, you may want to purchase additional insurance if a child enters the family or decrease your insurance when your children become adults and leave home.

Be aware that increasing your policy may mean you have to undergo additional underwriting requirements, such as another medical exam or health questionnaire. Also, if you want to decrease your coverage, some insurers may have limitations.

Review your life insurance coverage at least every few years or after significant life events such as marriage, childbirth, purchasing a home, or retirement.

Certain types of life insurance policies, like whole life or universal life, include a cash value component that grows your policy's value over time. You can withdraw or borrow from your cash value to pay for financial goals, such as retirement, your child's education, or long-term care expenses.

If you're single, life insurance can help you cover debts if you have a co-signer, final expenses, or costs to keep your business running. You can also use life insurance to build a financial legacy for loved ones or donate to charities.

Generally speaking, your financial obligations decrease over time (i.e., as your children leave the house, your mortgage gets paid off, etc.) So, younger individuals may need more coverage to cover those long-term financial obligations. Older individuals may carry less coverage, instead focusing on covering final expenses and leaving an inheritance.

Many life insurance companies and financial planning websites offer online calculators to estimate your life insurance needs based on your financial situation and goals.

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COMMENTS

Understanding business travel deductions
Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. A taxpayer is traveling away from home if they are away for longer than an ordinary day's work and they need to sleep to meet the demands of their work while away. Travel expenses must be ordinary and ...
How to Deduct Business Travel Expenses: Do's, Don'ts, Examples
To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn't your home. 2. You should be working regular hours. In general, that means eight hours a day of work-related activity. It's fine to take personal time in the evenings, and you can still take weekends off.
International Business Travel Tax Deductions
International Business Travel Tax Deductions. Tax laws provide numerous deductions for business travel, including travel outside the U.S. To qualify for a deduction, expenses must be ordinary and necessary. This means that they are commonly accepted in your type of business, and they are helpful and appropriate for your job.
Guide to Deducting Business Travel Expenses
Here's a list of common self-employed business travel expenses you can deduct as a taxpayer: Meal expenses (50% deductible) Lodging. Transportation costs (can include gas, airfare, car rental fees, taxis, baggage fees and other travel-related expenses) The cost of transporting supplies, such as display materials.
Topic no. 511, Business travel expenses
Topic no. 511, Business travel expenses. Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes. You're traveling away from home if your duties require you to be away from the general ...
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Business travel rules are slightly relaxed when you travel abroad. If you travel outside the USA for more than a week (seven consecutive days, not counting the day you depart the United States): You must spend at least 75% of your time outside of the country conducting business for the entire getaway to qualify as a business trip.
PDF THE COMPLETE GUIDE TO DEDUCTING BUSINESS TRAVEL EXPENSES
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Foreign travel expenses are fully deductible if you spent 100 percent of your time abroad on business. However, if you engaged in any non-business activity, whether sightseeing or visiting old friend, you may have to make an allocation between deductible business expenses and non-deductible personal ones.
Calculating Travel Expenses for Businesses
2. Pay with personal cards and submit expense claims. For many small to medium size businesses, this is the simpler option. Asking employees to pay business expenses from their personal account is pretty standard practice. Reimbursing expenses can be a time-consuming process for both Admin professionals and staff.
What Travel Expenses You Can (and Can't) Write Off
Cruises are special snowflakes and are subject to their own rules when it comes to travel expenses. According to the IRS, "You can deduct up to $2,000 per year of your expenses of attending conventions, seminars, or similar meetings held on cruise ships. All ships that sail are considered cruise ships.".
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Five tips for setting up a business travel budget. When setting up a business travel budget, you'll want to ensure that expenditures align with the business objectives, needs, and bottom line. To make it easy, we recommend the following steps: 1. Determine how much budget is realistic for your business. The first step is to try and ascertain ...
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Expenses you can claim. Your business can claim a deduction for travel expenses related to your business, whether the travel is taken within a day, overnight, or for many nights. Expenses you can claim include: airfares. train, tram, bus, taxi, or ride-sourcing fares. car hire fees and the costs you incur (such as fuel, tolls and car parking ...
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Business travel expenses are expenses accumulated on business journeys, including mileage, meals and overnight accommodation (known as ... The amounts are £5 per night if staying in the UK, or £10 per night if staying overseas. Things to note if you're an employee. Similarly to mileage claims, if you incur expenses as a result of ...
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Tax Rules When Your Business Trip Involves a Passport
Otherwise, none of your transportation costs are deductible. Take Advantage of the "25-Percent Rule.". Obviously, some foreign business trips last more than a week. You might be able to take advantage of another loophole — the 25-percent rule. If you qualify, you can once again deduct 100 percent of your transportation costs and all your ...
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So in this instance my advice would be to claim 60% of the total expenses associated with this business trip (5 days ÷ 3 days x 100 = 60%). I know this seems slightly harsh since all the travel costs are technically associated with your business because you wouldn't even be out there otherwise! But my advice still stands, it's better to be ...
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Travel medical insurance covers unexpected emergency medical expenses while traveling. Travelers off to foreign countries or remote areas should strongly consider travel medical insurance.
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