When you’re a business owner or entrepreneur, traveling is often part of the job, BUT: What travel expenses are tax deductible for self employed businesses?
And did you know that you could turn those business trips into tax-deductible adventures?
Understanding how to write off your business travel expenses is a valuable strategy that can help lower your taxable income and make your trips more cost-effective.
In this blog post, we’ll explore how to maximize your business travel deductions, and we’ll even reveal a secret on how to deduct parts of your personal vacations!
What Travel Expenses Can You Deduct?
The most crucial factor in determining whether your travel is tax-deductible is identifying the primary purpose of your trip.
To maximize your business travel tax deductions, more than 50% of the trip needs to be dedicated to business activities.
This might sound like a challenge, but it’s surprisingly achievable with some strategic planning.
For example, if you’re heading on a five-day trip and spend three of those days attending meetings or working, you can claim your travel as a business expense.
As long as business is the primary purpose, you’ll be able to deduct a variety of expenses, including:
- Airfare or mileage: Whether you’re flying or driving, the cost to get to your destination is deductible.
- Lodging: You can deduct the entire cost of your stay, even if some days are spent on personal activities.
- Transportation: Taxis, Ubers, or rental cars used during the trip for business purposes are deductible.
- Meals: While you can deduct 50% of your meal expenses, remember to keep receipts for accurate documentation.
The Importance of Documentation
Accurate documentation is key to keeping your business travel tax deductions legitimate in case of an audit. You’ll need to keep track of your work activities, especially if you’re blending business and leisure.
Here’s what to document:
- Dates of business activities: Note when and how long you worked each day.
- Receipts: Keep all receipts related to your business expenses, from meals to transportation.
- Meeting details: Record who you met, when, and where the meetings took place.
This way, even if your trip includes some personal time, you can prove that the primary purpose was business-related.
What Can’t You Deduct?
While many travel expenses are deductible, there are some that the IRS won’t allow:
- Family members’ expenses: Unless they are employees of your business, you can’t deduct your spouse’s or children’s travel expenses.
- Entertainment: Even if you take a client out, entertainment expenses like concert tickets or shows are no longer deductible.
- Lavish expenses: Be cautious with high-end or “lavish” expenditures, as these are likely to be disallowed by the IRS.
Maximizing Your Deductions with the Sandwich Rule
One of the best-kept secrets to boosting your business travel tax deductions is the sandwich rule.
If you have business meetings scheduled on a Friday and the following Monday, the IRS allows you to stay over the weekend and deduct lodging, transportation, and meal expenses for those days.
This rule makes it easier to combine business with some leisure time, allowing you to enjoy the destination while still claiming deductions.
International Business Travel: The Rules Are Different
When it comes to international travel, the IRS has different guidelines.
The percentage of time spent on business becomes even more crucial, and the rules for deducting airfare and other expenses are more stringent.
Depending on whether your trip is a week or longer, you may be subject to additional limitations, so be sure to consult with your CPA before booking your international business trips.
Pro Tip: Use Points to Maximize Personal Travel
If you’re traveling for business but your spouse or family members are tagging along, use business credit card points to cover their airfare.
This allows you to deduct your own airfare as a business expense. Points covers your family’s travel—no need to dip into your personal funds!
Bonus Video: For even more tips on how to travel for free using credit card points, check out my recent video: The Best Business Credit Card Strategy for Free Travel in 2025.
How to File These Deductions
Your business travel tax deductions will depend on your business structure:
- Sole proprietors and LLCs: You can claim these deductions directly on your Schedule C form.
- S Corps and C Corps: Reimburse yourself as an employee using a reimbursement policy that aligns with IRS guidelines.
For both scenarios, it’s important to follow IRS regulations closely to avoid issues during tax season.
Final Thoughts: Conclusion
Business travel can be expensive, but knowing how to leverage business travel tax deductions can significantly reduce the cost.
By keeping detailed records, planning your trips strategically, and using smart deductions like the sandwich rule, you can enjoy your travels while saving money come tax season.
This transcript is a verbatim account of the recorded video and has been formatted for clarity and readability, but it has not been edited for content. Please excuse any errors or verbal inconsistencies that may appear as part of the natural flow of conversation.
Are you ready to turn your business trips into tax-deductible adventures? If you’re a business owner or self-employed and have several trips lined up, you might be wondering which expenses you can write off and how to maximize your tax savings. In this guide, we’ll dive into business travel deductions and give you some bonus tips on how to potentially turn your vacations into tax-deductible trips. So, let’s get started!
Understanding What You Can Deduct for Business Travel
The first question you need to ask yourself is: What is the primary purpose of your trip? If more than 50% of your time during the trip is spent on business, you’re in luck. Here’s how it breaks down:
- Business Purpose: If your trip is mainly for business, you can deduct your airfare, transportation, and lodging for the entire trip, even if you spend some time on personal activities. However, meals are only 50% deductible.
For example, you’re traveling for five days. You spend three days working on business activities. The entire trip is considered business-related.
Even better, travel days count as business days!
What Can You Write Off During Business Travel?
If the primary purpose of your trip is business, you can typically deduct:
- Airfare or Mileage: All travel-related costs, such as flights or mileage driven to your destination.
- Lodging: The full cost of your hotel or other accommodations.
- Transportation: All transportation expenses like taxis or Ubers during your stay.
- Meals: Deduct 50% of the cost of your meals while traveling.
Just make sure to document all your activities. This helps prove the primary purpose of business in the case of an audit by the IRS.
What Can’t You Deduct During Business Travel?
Unfortunately, not everything is deductible, even if the trip is primarily for business. Here are some expenses that typically don’t qualify:
- Family Travel Costs: Got your spouse or kids coming along? Their travel expenses usually aren’t deductible unless they are actively involved in your business.
- Entertainment Costs: Activities like concerts or sightseeing, even if you’re entertaining clients, aren’t deductible. The IRS removed entertainment expenses from the list of deductions a few years ago.
- Personal Portions of the Trip: Any personal activities, like shopping or visiting tourist spots, aren’t tax-deductible either.
How to Make the Most of Business Travel Deductions
To maximize your deductions, the way you structure your trip matters. Let’s say you have business meetings on a Friday and Monday. According to IRS rules, if it’s not practical to return home between the two, you can stay the weekend and deduct your lodging, meals, and transportation for the entire trip—even if you’re not working over the weekend. This rule: the sandwich day rule.
Planning your meetings around weekends can increase your deductions while giving you some leisure time. Careful documentation is essential to show that your trip was for business purposes.
Bonus Tip: Deducting Your Family’s Travel with Points
If you’re traveling with family, here’s a smart strategy: Use your business expenses for deductions and credit card points for personal costs. For example, when my husband and I took a trip to New York, I paid for my travel expenses through the business to deduct them, while I used credit card points to cover his travel costs. This ensures I can still take the deduction for my travel while using points for his personal expenses.
Reimbursable Business Travel Expenses
Depending on your business structure, you’ll also want to know how to categorize these expenses:
- Sole Proprietors/LLCs: Claim straightforward Travel deductions directly on your Schedule C.
- S-Corps/C-Corps: These expenses are typically reimbursable. As an employee of your own business, create a reimbursement plan that aligns with IRS guidelines. This ensures you reimburse yourself correctly.
Maximize Your Travel Points for Free Trips
If you want to learn more about how to travel for free using credit card points, be sure to check out my other video: How to Travel for Free Using Credit Card Points, where I break down how to optimize points and miles for maximum savings on your trips.
