Building Your Business Operations & Success Accounting Travel, Meal & Entertainment Expenses Business Travel Expenses Are Partially Deductible By Rosemary Carlson Rosemary Carlson Rosemary Carlson is a finance instructor, author, and consultant who has written about business and personal finance for The Balance since 2008. Along with teaching finance for nearly three decades at schools including the University of Kentucky, Rosemary has served as a financial consultant for companies including Accenture and has developed online course materials in finance for universities and corporations. learn about our editorial policies Updated on September 19, 2022 Fact checked by Sarah Fisher Fact checked by Sarah Fisher Sarah Fisher is an associate editor at The Balance with two years of personal finance and business writing experience. She has written about personal finance for SmartAsset, and has held internships at the Consumer Financial Protection Bureau and Senator Kirsten Gillibrand's office. learn about our editorial policies In This Article View All In This Article Travel Expenses Transportation Expenses Meal and Lodging Expenses Entertainment Expenses Recordkeeping The Bottom Line Frequently Asked Questions Photo: Hero Images/Getty Images If you need to take a trip for work, you may be able to take a tax deduction for some or all of your meal and travel expenses. However, since the 2018 tax year began, business entertainment expenses have not been deductible. Key Takeaways Travel expenses occur when you have to travel away from your tax home for business purposes. When you're on a business trip, you may be able to deduct transportation costs as well as meal and lodging expenses. Entertainment expenses are generally not deductible. Travel Expenses According to the IRS, travel expenses are ordinary and necessary expenses that occur when you have to travel away from your tax home for work. Your tax home is the place where you do the majority of your business, and is usually the city or town where your business is located. Travel expenses can include meals, lodging, transportation, and more. Transportation Expenses If you are traveling away from your tax home on business by car, you can deduct the cost of transportation between your home and your business destination. If you drive your car, you can either use the IRS standard mileage rate or the actual cost of your car expenses. The standard mileage rates established by the IRS is updated at least once a year. If you choose to use the standard mileage rate for a year, you can't deduct any actual car expenses, including depreciation, lease payments, and gasoline. You may find that it is better for you to claim your actual car expenses. If you do choose to claim your actual vehicle expenses and you use your vehicle for personal use, as well as business use, you must divide the expenses between the two. If you don't travel using your car, you can deduct the cost of your taxi fare, commuter bus, airport limo, and any train or plane tickets. Meal and Lodging Expenses If you go on a business trip that is overnight or long enough that you need to stop for sleep or rest, you can deduct the cost of your meals and lodging expenses. You can deduct the cost of your hotel room or lodging as well as the cost of your dry cleaning, laundry, and tips. Meal expenses that you can claim as a business travel expense include food, drinks, taxes, and tips. You can usually only deduct 50% of the unreimbursed cost of your meals. However, you may be able to deduct 100% of your meal expenses if the meal was from a restaurant and was purchased between December 31, 2020 and January 1, 2023. Entertainment Expenses Although entertainment expenses generally stopped being deductible after January 1, 2018, you can still deduct entertainment expenses for promotional purposes. For example, if your company sponsors an event in order to promote your business, it may be deductible. You can also deduct the cost of food and beverages you provide during an entertainment event, if these costs are separate. Recordkeeping It is important to keep good records so that you can take tax deductions on business expenses. Keep your receipts, mileage records, and any other proof you may need. If you are audited, the IRS may ask you to prove that you were eligible for these tax deductions. The Bottom Line The Tax Cuts and Jobs Act of 2017 impacted the tax deductions of transportation, meals, and entertainment expenses for business owners and employees. It's more important than ever to keep good records regarding transportation expenses, and entertainment expenses are now non-deductible business expenses. Frequently Asked Questions What are travel and entertainment expenses? Business travel expenses occur when you travel away from your tax home for business purposes. Restrictions apply, but you can deduct meals, accommodations, and transportation expenses. Business entertainment expenses have been non-deductible since the 2018 tax year began. That means companies cannot take deductions for sporting events, concerts, or similar events. However, you may be able to take a business deduction for food and drinks provided during an entertainment event. Do travel expenses include meals? Yes, your travel expenses include meals if your business trip is overnight or long enough that you need to stop for sleep or rest. Meal expenses include food, drinks, taxes, and tips. You can usually only deduct 50% of the unreimbursed cost of your meals. However, you may be able to deduct 100% of your meal expenses if the meal was from a restaurant and was purchased between December 31, 2020 and January 1, 2023. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. IRS. "Publication 463 Travel Gift and Car Expenses," Page 10. IRS. "Publication 463 (2021), Travel, Gift, and Car Expenses." IRS. “IRS increases mileage rate for remainder of 2022.” Internal Revenue Service. "Publication 463 (2021), Travel, Gift, and Car Expenses."