Guide to the business travel tax deduction

Freelancer’s guide to business travel tax deductions

Like business meals and the home office deduction, many freelancers, contractors, and the self-employed forget to claim business travel tax write-offs. You don’t have to fly first class and stay at a fancy hotel to claim travel expense tax deductions. Conferences, worksite visits, and even a change of scenery can (sometimes) qualify as business travel.

Which types of trips count?

The IRS stipulates a few simple guidelines to determine whether a trip is for business. 

  1. Your destination should be far -- at least 100 miles from home. That’s about a two hour drive, or any kind of plane ride. The trip should require you to rest or sleep somewhere that isn’t your home. 
  2. You should be working regular hours while on the trip. In general, that means 8 hours a day of work-related activity. It’s fine to take personal time in the evenings and you can still take off weekends, but you can’t take a half-hour call from Disneyland and call it a business trip.
  3. The trip should last less than a year. Once you’ve been somewhere for over a year, you’re essentially living there. If your work is seasonal, traveling for six months at a time is fine, though!

For example, let’s say you’re a real estate agent living in Chicago. You travel to an industry conference in Las Vegas. You attend the conference during the day, go out in the evenings, and then stay the weekend. That’s a business trip! The flight, meals, hotel, and WiFi expenses are all tax write-offs!

Another example: you’re a freelancer on Upwork, living in Seattle. You move down to live with your sister in San Diego for the winter to expand your client network and work regular hours while you’re there. Flights, meals, sublet expenses, and shipping expenses are all tax deductible

What about digital nomads?

With the rise of remote-first workplaces, many freelancers choose to take their work with them as they travel the globe. As long as you have some work-related reason for why the travel helps with your contracting or freelancing work, then this excursion counts as business travel. Plausible reasons include meeting with local clients or attending a local conference and then extending your stay. 

However, if you’re a remote freelance software developer working from Thailand because you like the weather, that’s not business travel, sorry to say.

Which travel expenses are tax deductible?

As a rule of thumb, all travel-related expenses while on a business trip are tax deductible. You can also claim meals while traveling, but be careful with entertainment expenses (like going out for drinks!). Here are some common types of write-offs you should track.

🛫 All transportation

Flights, train, and car rental expenses all count as tax write offs. Don’t forget the Uber ride from the airport and back!

🏨 Lodging

Hotels, motels, airbnb stays, sublets on craigslist, or even reimbursing a friend for sleeping on their couch are all tax deductible lodging expenses. 

🥡 Meals while traveling

While traveling for work, you can write off 50% of all food expenses (just like other business meals!) -- regardless of whether it qualifies as a business meal. Gabbing a burger alone at your airport terminal counts! Even groceries and takeout are tax deductible.

🌐 Wifi

Airplane wifi, hotel wifi, and so on is completely deductible when you’re traveling for work. This also includes other communication expenses like hotspots and international calls.

📦 Shipping

If you need to ship things as part of your trip, such as conference booth materials or simply extra clothes, those expenses are also tax deductible.

👔 Dry cleaning

If you have to look your best on the trip, related expenses are tax deductible. That necessity includes washing and cleaning charges.

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Note: at Keeper Tax, we're on a missing to help freelancers overcome the complexity of their taxes. That sometimes leads us to generalize tax advice. Please drop a note above or reach out via email if you have questions.