Business Travel Rules

Business Travel Expenses are fully deductible, meals are 50% deductible

If the trip is personal and business, the expenses are so allocated as non-deductible and deductible. Transportation costs are deductible only if the trip is primarily for business. In the case of foreign travel, the business portion must be 75% to deduct all of the transportation expense. In so determining, each day is considered a business or personal day based on the following:

• Days on which business meetings are conducted are business days
• Days which are solely for recreation are personal days
• Weekend and holiday days that fall between business days are deemed business days
• Travel days are deemed business days if the trip is primarily for business
• Cost of lodging, meals and incidentals are deductible on business days.
• Costs associated with travel of spouse or children are only deductible if they are employees and there is a bona fide business purpose for their travel.

Be sure to document all business travel expenses with a log showing activities and business purpose and related receipts. This is an area of IRS scrutiny.