If you or your employees are heading out of town for business this summer, it’s important to understand what deductible business travel expenses are allowed under current tax law. To qualify, the travel must be necessary for your business and require an overnight stay within the United States.
Key Changes Under the Tax Cuts and Jobs Act
Under the Tax Cuts and Jobs Act (TCJA), employees can’t deduct unreimbursed travel expenses on their personal tax returns through 2025. These expenses fall under “miscellaneous itemized deductions,” which are currently suspended.
Pending legislation—such as the “One, Big, Beautiful Bill” passed by the U.S. House and now under Senate consideration—may permanently eliminate miscellaneous itemized deductions. That said, the law could still change, so stay tuned for updates.
Who Can Still Deduct Travel Expenses?
- Self-employed individuals
- Businesses paying employee travel costs
These groups can continue to claim deductible business travel expenses as long as they meet IRS guidelines.
What Counts as a Deductible Business Travel Expense?
Common deductible business travel expenses include:
- Airfare, taxis, and other transportation costs
- Lodging and meals (subject to a 50% limit for meals in 2025)
- Dry cleaning and laundry
- Business-related phone calls
- Equipment or laptop rentals used for business
Important Limitations
- Meals and lodging must be reasonable based on the circumstances.
- Extravagant or lavish costs aren’t deductible, but that doesn’t mean you’re limited to budget options.
- According to IRS Publication 463, meals won’t be disallowed just because they’re at upscale venues.
Non-Deductible Expenses
- Entertainment (e.g., shows, movies)
- Sightseeing or other personal activities
- Pet boarding and personal phone use
Combining Business and Personal Travel
Mixing business with leisure? You’ll need to separate expenses carefully. Here are some basic rules:
1. Business Days Only
You can only deduct meals and lodging for the days spent on business.
2. Travel Costs
- If the primary purpose of the trip is business, the entire cost of getting there and back (e.g., airfare) is deductible.
- If the trip is mostly personal, none of the travel costs are deductible.
3. Time Matters
The IRS looks at the proportion of business vs. personal time to determine whether the trip qualifies as business-related—especially for international travel, where the rules are stricter.
Special Considerations for Deducting Business Travel
Attending Conferences or Seminars
Make sure the event has a clear business purpose and isn’t a vacation in disguise. Keep:
- Agendas
- Registration documents
- Travel itineraries
Bringing a Spouse
Travel expenses for a spouse are generally not deductible unless:
- They’re a bona fide employee, and
- Their travel serves a legitimate business purpose
Maximize Your Deductible Business Travel Expenses
Tax rules are complex—especially when personal and business travel overlap. To maximize your deductible business travel expenses, remember to:
- Keep detailed records
- Save receipts
- Note business purposes, dates, and attendees
For personalized guidance, contact us. We can help ensure your travel deductions are compliant and optimized.
READ MORE: What are the Rules for Deducting Business Travel Expenses?
Originally posted May 2019. Updated June 2025.