![]() ![]() An important factor in determining if the trip is primarily business or personal is the amount of time spent on each (although this isn’t the sole factor). Conversely, if the trip is primarily personal, none of the travel costs are deductible. On the other hand, with respect to the cost of the travel itself (plane fare, etc.), if the trip is primarily business, the travel cost can be deducted in its entirety and no allocation is required. Only the costs of meals, lodging, etc., incurred for the business days are deductible - not those incurred for the personal vacation days. Some allocations may be required if the trip is a combined business/pleasure trip, for example, if you fly to a location for four days of business meetings and stay on for an additional three days of vacation. ![]() Personal entertainment costs on the trip aren’t deductible, but business-related costs such as those for dry cleaning, phone calls and computer rentals can be written off. Keep in mind that no deduction is allowed for meal or lodging expenses that are “lavish or extravagant,” a term that’s been interpreted to mean “unreasonable.” Therefore, there’s once again a 50% limit on deducting eligible business meals this year. Although there was a temporary 100% deduction in 20 for business food and beverages provided by a restaurant, it was not extended to 2023. Your meals are deductible even if they’re not connected to a business conversation or other business function. ![]() You’re also allowed to deduct the cost of meals and lodging. The actual costs of travel (for example, plane fare and cabs to the airport) are deductible for out-of-town business trips. However, self-employed individuals can continue to deduct business expenses, including away-from-home travel expenses. That’s because unreimbursed employee business expenses are “miscellaneous itemized deductions” that aren’t deductible through 2025. Note: Under the Tax Cuts and Jobs Act, employees can’t deduct their unreimbursed travel expenses on their own tax returns through 2025. The rules apply if the business conducted reasonably requires an overnight stay. Under tax law, in order to claim deductions, you must meet certain requirements for out-of-town business travel within the United States. If you and your employees are traveling for business this summer, there are a number of considerations to keep in mind. ![]()
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