Deducting Work-Related Airport Travel Expenses: What's Allowed?

If you're travelling for work, you may be able to deduct some of your travel expenses when filing your taxes. The IRS has specific rules about what counts as a deductible expense. Your trip must be for business reasons and take you away from your 'tax home' or main place of work. It must be longer than a regular workday and require sleep or rest to meet work demands. Expenses must be 'ordinary and necessary', and cannot be lavish, extravagant, or for personal purposes. So, can you deduct travel to the airport? The answer is yes, but only if the above criteria are met.

Travel expenses must be ordinary and necessary

When it comes to claiming tax deductions for travel expenses, it's important to understand what qualifies as an "ordinary and necessary" expense. Here's a detailed breakdown:

• Ordinary expenses refer to those that are common and accepted in your industry or area of business. These expenses are typically considered necessary for conducting business and are free from lavish or extravagant spending. Examples include airfare, train tickets, bus fares, and taxi rides.
• Necessary expenses are those that are helpful and appropriate for your business or job. They are expenses that contribute directly to your work and are incurred while travelling away from your "tax home". Necessary expenses could include lodging, meals, transportation, and business-related phone calls.

Understanding "Tax Home"

Your "tax home" is generally the entire city or area where your main place of business or work is located, regardless of where you live or maintain your family home. For example, if you live in Chicago but work in Milwaukee during the week, Milwaukee is considered your tax home, and you cannot deduct travel expenses there.

Deductible Travel Expenses

• Transportation costs: This includes airfare, train or bus fares, car mileage, and taxi fares between the airport/train station and your hotel or work location.
• Lodging and meals: You can deduct the cost of lodging and meals (excluding entertainment-related meals) while travelling for business.
• Laundry and dry cleaning: Expenses for laundry services and dry cleaning of clothes during business trips are deductible.
• Business calls and communication: You can deduct the cost of business-related phone calls, faxes, and other communication expenses incurred during your trip.
• Tips: Tips paid for services related to any of the above expenses are also deductible.
• Other similar expenses: Other ordinary and necessary expenses related to your business travel, such as computer rental fees, public stenographer fees, or shipping costs for baggage and display materials, may also be deductible.

Non-Deductible Expenses

It's important to note that not all travel expenses are deductible. Here are some examples of expenses that do not qualify as ordinary and necessary:

• Personal expenses: Expenses for personal purposes, such as sightseeing or visiting friends/family during a business trip, are not deductible.
• Lavish or extravagant expenses: Expenses that are considered unreasonable or extravagant, such as staying in a luxury hotel or dining at high-end restaurants, are not deductible.
• Travel to and from your regular workplace: You cannot claim deductions for travel expenses incurred during your daily commute to and from your permanent place of work.
• Indefinite work assignments: Travel expenses for work assignments that exceed one year or are indefinite are not deductible.

You can deduct travel expenses if away from your tax home

You can deduct travel expenses if you are travelling away from your tax home. This means that you are travelling away from the general area or vicinity of your tax home, and your trip is long enough or far away enough that you cannot reasonably be expected to complete the round trip without obtaining sleep or rest.

Your tax home is the entire general area or vicinity (e.g. a city and its surrounding suburbs) of your principal place of business, regardless of the location of your personal or family home. If you have more than one place of business, your tax home is the area in which your main place of business is located. If you do not have a regular or main place of business, your tax home may be the place where you regularly live.

If you are travelling away from your tax home, you can deduct the following expenses:

• Travel by plane, train, bus, or car between your home and your business destination
• Fares for taxis or other transportation between the airport or train station and your hotel, or from your hotel to a work location
• Shipping of baggage and sample or display materials between your regular and temporary work locations
• Using your car while at your business destination
• 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 your business travel, such as transportation to and from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer

Travel expenses for conventions are deductible if they benefit your business

When attending a convention, you can deduct the cost of travel by airplane, train, bus, or car between your home and the convention destination. If you use a taxi or other form of transportation to get from the airport or train station to your hotel, or from your hotel to the convention centre, you can deduct these fares as well. If you drive your own car to the convention, you can deduct the actual expenses or the standard mileage rate, along with business-related tolls and parking fees.

In addition to travel costs, you can also deduct the cost of lodging and meals for yourself while attending the convention. However, it is important to note that only 50% of the cost of meals is typically deductible. Other deductible expenses may include dry cleaning, laundry, business calls, tips, and other similar expenses related to your business travel.

To claim these deductions, it is essential to maintain good records and ensure that your travel expenses are directly related to the convention and provide a benefit to your business.

Deductible travel expenses while away from home

The IRS defines travel expenses as the "ordinary and necessary" costs of travelling away from home for business, profession, or work. These expenses must be reasonable and only count if your trip is substantially longer than a standard workday and requires sleep or rest to meet work demands.

• Air, rail, bus, or car travel between home and a business destination.
• Taxi, bus, or airport limousine fares between the airport/station and hotel, or hotel and work locations.
• Baggage and shipping costs for transporting baggage and display materials between work locations.
• Car usage and maintenance, including actual expenses or the standard mileage rate, tolls, and parking fees.
• Lodging and non-entertainment meals.
• Dry cleaning and laundry.
• Business calls and communications.
• Tips for any of the above services.
• Other similar, ordinary, and necessary expenses, e.g., transportation to business meals, public stenographer's fees, computer rental fees, and operating/maintaining a house trailer.

Special rules for traveling abroad

When it comes to deducting travel expenses for work, there are a few things to keep in mind, especially when travelling abroad. Here are some key points to remember:

• Business-related travel only: Your travel must be primarily for business reasons. If your trip is purely for pleasure, you cannot deduct any travel expenses. However, if you conduct incidental business during a personal trip, you may be able to deduct certain expenses directly related to that business.
• Ordinary and necessary: Travel expenses must be "ordinary and necessary" for your work. An "ordinary" expense is one that is common and accepted in your line of work, while a "necessary" expense is one that is helpful and appropriate.
• "Away from home": To qualify for a deduction, you must be travelling outside the general area of your "tax home", which is typically the city or region where your main place of business or work is located. This typically means travelling outside your city limits or, if you don't live in a city, outside the area where your business is located.
• Temporary work: Deductions usually apply to "temporary" work assignments. Assignments lasting longer than a year are typically considered "indefinite" and don't qualify for deductions.
• Conventions and workshops: If you attend a convention, workshop, conference, or seminar, you may be able to deduct your travel expenses if you can show that it benefits your business. However, the rules are stricter for events held outside North America or on cruise ships. For conventions outside North America, the event must be directly related to your business, and it must be reasonable to hold it at that location. For cruise ship events, there are specific requirements, such as the ship being registered in the US and all ports of call being in the US.
• Foreign travel: Business-related foreign travel expenses are deductible, but they are scrutinised closely by the IRS. If you combine business and personal activities during your trip, you may need to allocate your expenses accordingly.
• Meal expenses: When travelling for business, you can usually deduct up to 50% of your meal expenses as long as they are not lavish or extravagant. This applies to both domestic and international travel.
• Documentation: Keep good records and documentation of your expenses, as they are essential for claiming deductions.

Frequently asked questions