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Travel expenses are costs you incur away from your tax home for business purposes, including transportation, lodging, and meals. The IRS allows deductions for ordinary and necessary travel costs when you travel away from your regular place of business overnight or long enough that rest is required. For 2025, the standard IRS mileage rate for business travel is 70 cents per mile, up from 67 cents per mile in 2024.
Think of deductible travel expenses as costs you would not have incurred if the business trip had not happened, provided they are reasonable in amount and directly connected to a business purpose.
The IRS defines travel for business as travel away from your tax home, which is typically your regular place of business. If you work in Chicago and fly to New York for a client meeting, every ordinary and necessary expense you incur from departure to return qualifies as a potential deduction. The IRS uses "ordinary and necessary" as its standard: ordinary means common in your industry, and necessary means helpful and appropriate for your business.
Deductible travel expenses include the following:
Meals on business travel are deductible at 50% of the actual cost, not the full amount. If you spend $200 on meals during a two-day business trip, your deduction is $100. The 50% limitation reflects Congress's judgment that some personal benefit attaches to eating even when the meal is business-related.
The IRS allows an alternative simplified method using per diem rates set by the General Services Administration instead of tracking actual meal costs. The standard meal and incidental expense per diem for most U.S. destinations in 2025 is $68 per day. High-cost localities, including New York City, San Francisco, and Washington D.C., qualify for higher per diem rates updated annually by the GSA. Using per diem rates eliminates the need to keep receipts for each meal, which simplifies record-keeping for frequent business travelers.
When a trip combines business and personal activities, the deductibility rules require careful allocation. For domestic travel, if the primary purpose of the trip is business, you can deduct transportation costs in full and allocate lodging and meals to the business days. If the primary purpose is personal, no deduction is available for transportation, even if you conduct some business during the trip.
For international travel, more detailed rules apply. If you spend more than 25% of the trip on personal activities, you must allocate transportation costs between business and personal in proportion to the number of business days versus personal days. A 10-day international trip with 7 business days and 3 personal days allows a 70% deduction of transportation costs.
The IRS requires you to substantiate all travel expense deductions with records that show the amount, time, place, and business purpose of each expense. For expenses above $75, receipts are generally required. For meals, you need records showing who was present and the business discussion that took place.
The Cohan rule, established in a 1930 federal court case involving entertainer George M. Cohan, allows courts to estimate deductible amounts when records are inadequate but some business purpose is evident. However, Congress specifically excluded travel and entertainment from Cohan's protections in the Tax Reform Act of 1986. If you cannot document your travel expenses with contemporaneous records, you risk losing the deduction entirely on audit.
Self-employed individuals and business owners deduct travel expenses directly on Schedule C, Schedule E, or Schedule F depending on their business structure. The deduction reduces both income tax and self-employment tax.
Employees who incur unreimbursed travel expenses for work can no longer deduct them on their federal income tax returns for tax years 2018 through 2025, due to the suspension of miscellaneous itemized deductions under the Tax Cuts and Jobs Act of 2017. This rule is scheduled to expire after 2025, and whether Congress renews it or allows it to lapse will significantly affect how employees who travel for work plan their tax strategies going forward.
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