CHAPTER 20Travel and Meal Expense Deductions
Unreimbursed employee travel expenses are not deductible, except for a very limited number of employees who may claim their expenses on Form 2106 and deduct them as an above-the-line adjustment to income (20.1).
Under an “accountable plan” arrangement, an expense allowance from an employer for travel costs is not reported as income on Form W-2 if you substantiated the expenses to your employer and returned any unsubstantiated portion of the allowance (20.18). If you are self-employed, travel expenses are claimed on Schedule C (40.6).
The types of deductible travel expenses are highlighted in Table 20-1. You must be away from home to deduct travel expenses on overnight business trips. Meal costs on overnight trips away from home are subject to restrictions, including a 50% deduction limit (80% for certain transportation workers) unless they are provided at restaurants (20.15). On one-day business trips within the general area of your employment, only transportation costs may be deducted; meals may not.
To support your travel expense deductions, keep records that comply with IRS rules (20.16).
You may no longer deduct entertainment expenses. Although deductions for entertainment have been eliminated, business meals may still be fully or 50% deductible, provided that IRS requirements are satisfied (20.13, 20.14).
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