Travel and Entertainment Tax Deductions

As a general rule, the costs of commuting between your home and workplace are not deductible. However, if you can prove that your home office is your principal place of business, the cost of travelling from your home to your customers is deductible.

  • If you travel away from your tax-home for more than one day, all business-related expenses are fully deductible: airfare, taxi, parking, lodging, entertainment and incidentals, EXCEPT meals, which are 50% deductible. You must be able to prove it was business-related and bookkeeping records must indicate the length of stay, city and state where you traveled, and reason for travel. It must be within reason. In Wisconsin, for example, the standard daily meal allowance is $57/day in 2017. The meal allowance varies between cities in different states. (Your bookkeeper or accountant will need to know the detailed information.)
  • For travel to conventions: If the convention is related to the active conduct of your business, meals are 100% deductible.

For tax purposes, if you operate as a Sole Proprietor or as a Single Member of an LLC, Travel & Entertainment expenses are recorded on IRS Form 1040 Schedule C of the IRS tax forms.

For exact per diem rates, please visit: The U.S. General Services Administration