Beginning in tax year 2018, the Tax Cuts and Jobs Act eliminated the deduction for unreimbursed W-2 employee expenses which includes travel expenses incurred for your job, as an itemized deduction.
If you are self-employed, you may deduct the ordinary and necessary expenses incurred when traveling away from your tax home for business purposes. Expenses that are lavish, extravagant, or of a personal nature cannot be deducted.
What is a tax home?
Your tax home is the city or "general area" where your main place of work is located. Where your family home is does not factor in the consideration of your tax home. If your family home is not the same as your tax home, you may not deduct the cost of travel between your family home and your tax home.
If you work in multiple locations, your tax home is the general area where your main place of business or work is located. You can find more information about how to determine your tax home from the IRS website.
What can I deduct?
Transportation
The cost of the ticket for transportation (i.e.. plane, train, or bus ticket) to your temporary place of work or business trip is deductible. This includes the cost of the ticket as well as the fees for baggage.
If you travel to your destination in your own vehicle you can use the IRS standard mileage rate. If you rent a vehicle you may deduct the expenses that are business related.
Lodging and Meals
For 2023 the rules revert back to pre-2021 levels of 50% deduction for eligible business meals. You may deduct the cost of your lodging and meals that are not entertainment related. Your meal deduction can include food, drinks, taxes, and related tips. Meals must not be lavish or extravagant. For information on the temporary 100% deduction for food or beverages from restaurants for tax years 2020-2022, please see here.
For more information regarding the allowance and limits on meal deductions, please see the IRS website.
Shipping and Baggage
You may deduct the cost of shipping baggage and display and/or display material between your regular place of business and your temporary work location.
Other travel expenses
Other expenses that you may deduct that are considered ordinary and necessary related to your business travel are:
- Laundry and/or dry cleaning
- The cost of business calls
- Tips and other similar costs
- Gifts that are given for your trade or business