Friday, July 1, 2011

FAQ Friday: Travel and Entertainment

What expenses can I deduct while traveling away from home?
A wide range of expenses can be deducted while traveling away from home.
Here are the main ones:
  • Transportation fares, or actual costs (or a per mile rate) of using your own vehicle. Also, transportation costs of getting around in the work area-to and from hotels, restaurants, offices, terminals, etc.
  • Lodging and meals (subject to the 50% limit on meals)
  • Phone, fax, laundry, baggage handling
  • Tips related to the above


Can I deduct the cost of meals on days I call on customers or clients away from my office?

Generally not. Usually, you can only deduct costs of meals when you're away from home overnight, or as part of business-related entertainment.

Even when deduction is allowed, it's only to the extent of 50% of the meals costs and related tips.



What can't be deducted as travel expenses?

The following travel expenses cannot be deducted:
  • Costs of commuting between your residence and a work site, but it's a deductible business trip if your residence is your business headquarters.
  • Travel as education

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