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Publication 17
taxmap/pub17/p17-142.htm#en_us_publink1000173660

Chapter 26
Car Expenses and Other Employee Business Expenses(p177)

What's New(p177)


taxmap/pub17/p17-142.htm#en_us_publink1000173662
Standard mileage rate.(p177)
For 2011, the standard mileage rate for the cost of operating your car for business use is:
  • 51 cents per mile from January 1 through June 30, 2011, and
  • 551/2 cents per mile from July 1 through December 31, 2011.
Car expenses and use of the standard mileage rate are explained under Transportation Expenses, later.
taxmap/pub17/p17-142.htm#en_us_publink1000173664
Depreciation limits on cars, trucks, and vans.(p177)
For 2011, the first-year limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars increases to $11,060 ($3,060 if you elect not to claim the special depreciation allowance). For trucks and vans the first-year limit has increased to $11,260 ($3,260 if you elect not to claim the special depreciation allowance). For more information see Depreciation limits in Publication 463.
taxmap/pub17/p17-142.htm#TXMP717d02c6
You may be able to deduct the ordinary and necessary business-related expenses you have for: An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary.
This chapter explains the following.
taxmap/pub17/p17-142.htm#en_us_publink1000173667

Who does not need to use this chapter.(p177)

rule
If you are an employee, you will not need to read this chapter if all of the following are true. If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. See Reimbursements, later, if you would like more information on reimbursements and accounting to your employer.
Deposit
If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2.

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Useful items

You may want to see:


Publication
 463 Travel, Entertainment, Gift, and Car Expenses
 535 Business Expenses
 1542 Per Diem Rates
Form (and Instructions)
 Schedule A (Form 1040): Itemized Deductions
 Schedule C (Form 1040): Profit or Loss From Business
 Schedule C-EZ (Form 1040): Net Profit From Business
 Schedule F (Form 1040): Profit or Loss From Farming
 Form 2106: Employee Business Expenses
 Form 2106-EZ: Unreimbursed Employee Business Expenses
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Travel Expenses(p177)

rule
If you temporarily travel away from your tax home, you can use this section to determine if you have deductible travel expenses. This section discusses: It also discusses the standard meal allowance, rules for travel inside and outside the United States, and deductible convention expenses.
taxmap/pub17/p17-142.htm#en_us_publink1000173671

Travel expenses defined.(p177)

rule
For tax purposes, travel expenses are the ordinary and necessary expenses (defined earlier) of traveling away from home for your business, profession, or job.
You will find examples of deductible travel expenses in Table 26-1.
taxmap/pub17/p17-142.htm#en_us_publink1000173672

Traveling Away From Home(p177)

rule
You are traveling away from home if: This rest requirement is not satisfied by merely napping in your car. You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest.
taxmap/pub17/p17-142.htm#en_us_publink1000173673

Example 1.(p178)

You are a railroad conductor. You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. You are considered to be away from home.
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Example 2.(p178)

You are a truck driver. You leave your terminal and return to it later the same day. You get an hour off at your turnaround point to eat. Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home.
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Members of the Armed Forces.(p178)

rule
If you are a member of the U.S. Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. You cannot deduct your expenses for meals and lodging. You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses.
A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home aboard ship for travel expense purposes.
taxmap/pub17/p17-142.htm#en_us_publink1000173676

Tax Home(p178)

rule
To determine whether you are traveling away from home, you must first determine the location of your tax home.
Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located.
If you have more than one regular place of business, your tax home is your main place of business. See Main place of business or work, later.
If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. See No main place of business or work, later.
If you do not have a regular or a main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home.
taxmap/pub17/p17-142.htm#en_us_publink1000173679

Main place of business or work.(p178)

rule
If you have more than one place of business or work, consider the following when determining which one is your main place of business or work.
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Example.(p178)

You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Cincinnati is your main place of work because you spend most of your time there and earn most of your income there.
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No main place of business or work.(p178)

rule
You may have a tax home even if you do not have a regular or main place of business or work. Your tax home may be the home where you regularly live.
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Factors used to determine tax home.(p178)
If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is.
  1. You perform part of your business in the area of your main home and use that home for lodging while doing business in the area.
  2. You have living expenses at your main home that you duplicate because your business requires you to be away from that home.
  3. You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging.
If you satisfy all three factors, your tax home is the home where you regularly live. If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses.
taxmap/pub17/p17-142.htm#en_us_publink1000173683

Example.(p178)

You are single and live in Boston in an apartment you rent. You have worked for your employer in Boston for a number of years. Your employer enrolls you in a 12-month executive training program. You do not expect to return to work in Boston after you complete your training.
During your training, you do not do any work in Boston. Instead, you receive classroom and on-the-job training throughout the United States. You keep your apartment in Boston and return to it frequently. You use your apartment to conduct your personal business. You also keep up your community contacts in Boston. When you complete your training, you are transferred to Los Angeles.
You do not satisfy factor (1) because you did not work in Boston. You satisfy factor (2) because you had duplicate living expenses. You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. Therefore, you have a tax home in Boston.
taxmap/pub17/p17-142.htm#en_us_publink1000235841

Tax home different from family home.(p178)

rule
If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. You also cannot deduct the cost of meals and lodging while at your tax home. See Example 1 that follows.
If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. See Example 2 later.
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Example 1.(p178)

You are a truck driver and you and your family live in Tucson. You are employed by a trucking firm that has its terminal in Phoenix. At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. This is because Phoenix is your tax home.
taxmap/pub17/p17-142.htm#en_us_publink1000235845

Example 2.(p178)

Your family home is in Pittsburgh, where you work 12 weeks a year. The rest of the year you work for the same employer in Baltimore. In Baltimore, you eat in restaurants and sleep in a rooming house. Your salary is the same whether you are in Pittsburgh or Baltimore.
Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. You cannot deduct any expenses you have for meals and lodging there. However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. You can deduct the cost of your round trip between Baltimore and Pittsburgh. You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh.
taxmap/pub17/p17-142.htm#en_us_publink1000173689

Temporary Assignment
or Job(p178)

rule
You may regularly work at your tax home and also work at another location. It may not be practical to return to your tax home from this other location at the end of each work day.
taxmap/pub17/p17-142.htm#en_us_publink1000173690

Temporary assignment vs. indefinite assignment.(p178)

rule
If your assignment or job away from your main place of work is temporary, your tax home does not change. You are considered to be away from home for the whole period you are away from your main place of work. You can deduct your travel expenses if they otherwise qualify for deduction. Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less.
However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year.
If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. You may be able to deduct the cost of relocating to your new tax home as a moving expense. See Publication 521 for more information.
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Exception for federal crime investigations or prosecutions.(p178)

rule
If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year, provided you meet the other requirements for deductibility.
For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling:
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Determining temporary or indefinite.(p179)

rule
You must determine whether your assignment is temporary or indefinite when you start work. If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. An assignment or job that is initially temporary may become indefinite due to changed circumstances. A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment.
taxmap/pub17/p17-142.htm#en_us_publink1000173693

Going home on days off.(p179)

rule
If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. You cannot deduct the cost of your meals and lodging there. However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work.
If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work.
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Probationary work period.(p179)

rule
If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. You cannot deduct any of your expenses for meals and lodging during the probationary period.
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What Travel Expenses Are Deductible?(p179)

rule
Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible.
You can deduct ordinary and necessary expenses you have when you travel away from home on business. The type of expense you can deduct depends on the facts and your circumstances.
Table 26-1, later, summarizes travel expenses you may be able to deduct. You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances.
Where Refund
When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. You can use a log, diary, notebook, or any other written record to keep track of your expenses. The types of expenses you need to record, along with supporting documentation, are described in Table 26-2, later.
taxmap/pub17/p17-142.htm#en_us_publink1000173697

Separating costs.(p179)

rule
If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. You must have a reasonable basis for making this allocation. For example, you must allocate your expenses if a hotel includes one or more meals in its room charge.
taxmap/pub17/p17-142.htm#en_us_publink1000173698

Travel expenses for another individual.(p179)

rule
If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses.
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Employee.(p179)
You can deduct the travel expenses of someone who goes with you if that person:
  1. Is your employee,
  2. Has a bona fide business purpose for the travel, and
  3. Would otherwise be allowed to deduct the travel expenses.
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Business associate.(p179)
If a business associate travels with you and meets the conditions in (2) and (3) above, you can deduct the travel expenses you have for that person. A business associate is someone with whom you could reasonably expect to actively conduct business. A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor.
taxmap/pub17/p17-142.htm#en_us_publink1000173701
Bona fide business purpose.(p179)
A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible.
taxmap/pub17/p17-142.htm#en_us_publink1000173702

Example.(p180)

Jerry drives to Chicago on business and takes his wife, Linda, with him. Linda is not Jerry's employee. Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. Her expenses are not deductible.
Jerry pays $199 a day for a double room. A single room costs $149 a day. He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. If he uses public transportation, he can deduct only his fare.
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Table 26-1. Travel Expenses You Can Deduct
This chart summarizes expenses you can deduct when you
 travel away from home for business purposes.

IF you have expenses for...THEN you can deduct the cost of...
transportationtravel by airplane, train, bus, or car between your home and your business destination. If you were provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. If you travel by ship, see Luxury Water Travel and Cruise ships (under Conventions) in Publication 463 for additional rules and limits.
taxi, commuter bus, and airport limousinefares for these and other types of transportation that take you between:
  • The airport or station and your hotel, and
  • The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location.
baggage and shippingsending baggage and sample or display material between your regular and temporary work locations.
caroperating and maintaining your car when traveling away from home on business. You can deduct actual expenses or the standard mileage rate as well as business-related tolls and parking. If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses.
lodging and mealsyour lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Meals include amounts spent for food, beverages, taxes, and related tips. See Meals and Incidental Expenses for additional rules and limits.
cleaningdry cleaning and laundry.
telephonebusiness calls while on your business trip. This includes business communication by fax machine or other communication devices.
tipstips you pay for any expenses in this chart.
otherother similar ordinary and necessary expenses related to your business travel. These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer.
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Meals and Incidental Expenses(p180)

rule
You can deduct the cost of meals in either of the following situations.
Business-related entertainment is discussed under Entertainment Expenses, later. The following discussion deals only with meals (and incidental expenses) that are not business-related entertainment.
taxmap/pub17/p17-142.htm#en_us_publink1000173708

Lavish or extravagant.(p180)

rule
You cannot deduct expenses for meals that are lavish or extravagant. An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts.
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50% limit on meals.(p180)

rule
You can figure your meal expenses using either of the following methods. Both of these methods are explained below. But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals.
If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. The 50% limit is explained later under Entertainment Expenses. Accountable and nonaccountable plans are discussed later under Reimbursements.
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Actual cost.(p180)

rule
You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. If you use this method, you must keep records of your actual cost.
taxmap/pub17/p17-142.htm#en_us_publink1000173713

Standard meal allowance.(p180)

rule
Generally, you can use the "standard meal allowance" method as an alternative to the actual cost method. It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. The set amount varies depending on where and when you travel. In this chapter, "standard meal allowance" refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance. If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. See Recordkeeping, later.
taxmap/pub17/p17-142.htm#en_us_publink1000173716
Incidental expenses.(p180)
The term "incidental expenses" means: Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, or the costs of telegrams or telephone calls.
taxmap/pub17/p17-142.htm#en_us_publink1000173717
Incidental expenses only method.(p180)
You can use an optional method (instead of actual cost) for deducting incidental expenses only. The amount of the deduction is $5 a day. You can use this method only if you did not pay or incur any meal expenses. You cannot use this method on any day that you use the standard meal allowance.
EIC
Federal employees should refer to the Federal Travel Regulations at
www.gsa.gov. Find "What GSA Offers" and click on "Regulations: FAR, FMR, FTR" for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement.
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50% limit may apply.(p180)
If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. The 50% limit is explained later under Entertainment Expenses. Accountable and nonaccountable plans are discussed later under Reimbursements.
EIC
There is no optional standard lodging amount similar to the standard meal allowance. Your allowable lodging expense deduction is your actual cost.
taxmap/pub17/p17-142.htm#en_us_publink1000173723
Who can use the standard meal allowance.(p180)
You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses.
taxmap/pub17/p17-142.htm#en_us_publink1000173724

Use of the standard meal allowance for other travel.(p180)

rule
You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. You can also use it to figure your meal expenses when you travel for qualifying educational purposes. You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes.
taxmap/pub17/p17-142.htm#en_us_publink1000173725

Amount of standard meal allowance.(p180)

rule
The standard meal allowance is the federal M&IE rate. For travel in 2011, the rate for most small localities in the United States is $46 a day.
Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. Locations qualifying for these rates are listed in Publication 1542 which is available on the Internet at IRS.gov.
EIC
You can also find this information (organized by state) on the Internet at www.gsa.gov. Click on "Per Diem Rates," then select "2011" for the period January 1, 2011 – September 30, 2011, and select "2012" for the period October 1, 2011 – December 31, 2011. However, you can apply the rates in effect before October 1, 2011, for expenses of all travel within the United States for 2011 instead of the updated rates. You must consistently use either the rates for the first 9 months for all of 2011 or the updated rates for the period of October 1, 2011, through December 31, 2011.
If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. If you work in the transportation industry, however, see Special rate for transportation workers, later.
taxmap/pub17/p17-142.htm#en_us_publink1000173728
Standard meal allowance for areas outside the continental United States.(p180)
The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U.S. Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. The Department of State establishes per diem rates for all other foreign areas.
EIC
You can access per diem rates for non-foreign areas outside the continental United States at:
www.defensetravel.dod.mil/site/perdiemCalc.cfm. You can access all other foreign per diem rates at www.state.gov/travel/. Click on "Travel Per Diem Allowances for Foreign Areas" under "Foreign Per Diem Rates," to obtain the latest foreign per diem rates.
taxmap/pub17/p17-142.htm#en_us_publink1000173730
Special rate for transportation workers.(p180)
You can use a special standard meal allowance if you work in the transportation industry. You are in the transportation industry if your work: If this applies to you, you can claim a standard meal allowance of $59 a day ($65 for travel outside the continental United States).
Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year.
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Travel for days you depart and return.(p181)

rule
For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). You can do so by one of two methods.
taxmap/pub17/p17-142.htm#en_us_publink1000173732

Example.(p181)

Jen is employed in New Orleans as a convention planner. In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. She left her home in New Orleans at 10 a.m. on Wednesday and arrived in Washington, DC, at 5:30 p.m. After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p.m. Jen's employer gave her a flat amount to cover her expenses and included it with her wages.
Under Method 1, Jen can claim 21/2 days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday.
Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use method 1 and be limited to only 21/2 days.
taxmap/pub17/p17-142.htm#en_us_publink1000173733

Travel in the
United States(p181)

rule
The following discussion applies to travel in the United States. For this purpose, the United States includes the 50 states and the District of Columbia. The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. See Part of Trip Outside the United States, later.
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Trip Primarily for Business(p181)

rule
You can deduct all your travel expenses if your trip was entirely business related. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination.
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Example.(p181)

You work in Atlanta and take a business trip to New Orleans in May. On your way home, you stop in Mobile to visit your parents. You spend $1,996 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,696. You can deduct $1,696 for your trip, including the cost of round-trip transportation to and from New Orleans. The deduction for your meals is subject to the 50% limit on meals mentioned earlier.
taxmap/pub17/p17-142.htm#en_us_publink1000173737

Trip Primarily for
Personal Reasons(p181)

rule
If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. However, you can deduct any expenses you have while at your destination that are directly related to your business.
A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip.
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Part of Trip Outside
the United States(p181)

rule
If part of your trip is outside the United States, use the rules described later under Travel Outside the United States for that part of the trip. For the part of your trip that is inside the United States, use the rules for travel in the United States. Travel outside the United States does not include travel from one point in the United States to another point in the United States. The following discussion can help you determine whether your trip was entirely within the United States.
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Public transportation.(p181)

rule
If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States.
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Example.(p181)

You fly from New York to Puerto Rico with a scheduled stop in Miami. You return to New York nonstop. The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States.
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Private car.(p181)

rule
Travel by private car in the United States is travel between points in the United States, even when you are on your way to a destination outside the United States.
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Example.(p181)

You travel by car from Denver to Mexico City and return. Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border.
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Travel Outside
the United States(p181)

rule
If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. For this purpose, the United States includes the 50 states and the District of Columbia.
How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related.
See chapter 1 of Publication 463 for information on luxury water travel.
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Travel Entirely for Business
or Considered Entirely
for Business(p181)

rule
You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business.
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Travel entirely for business.(p181)

rule
If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses.
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Travel considered entirely for business.(p181)

rule
Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions.
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Exception 1 - No substantial control.(p181)
Your trip is considered entirely for business if you did not have substantial control over arranging the trip. The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip.
You do not have substantial control over your trip if you:
"Related to your employer" is defined later in this chapter under Per Diem and Car Allowances.
A "managing executive" is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel.
A self-employed person generally has substantial control over arranging business trips.
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Exception 2 - Outside United States no more than a week.(p181)
Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. One week means 7 consecutive days. In counting the days, do not count the day you leave the United States, but do count the day you return to the United States.
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Exception 3 - Less than 25% of time on personal activities.(p182)
Your trip is considered entirely for business if: For this purpose, count both the day your trip began and the day it ended.
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Exception 4 - Vacation not a major consideration.(p182)
Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip.
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Travel Primarily for Business(p182)

rule
If you travel outside the United States primarily for business but spend some of your time on nonbusiness activities, you generally cannot deduct all of your travel expenses. You can only deduct the business portion of your cost of getting to and from your destination. You must allocate the costs between your business and nonbusiness activities to determine your deductible amount. These travel allocation rules are discussed in chapter 1 of Publication 463.
Deposit
You do not have to allocate your travel expense deduction if you meet one of the four exceptions listed earlier under Travel considered entirely for business. In those cases, you can deduct the total cost of getting to and from your destination.
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Travel Primarily for Personal Reasons(p182)

rule
If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. If you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business.
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Conventions(p182)

rule
You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. You cannot deduct the travel expenses for your family.
If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses.
EIC
Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. You can deduct your travel expenses only if your attendance is connected to your own trade or business.
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Convention agenda.(p182)

rule
The convention agenda or program generally shows the purpose of the convention. You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes.
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Conventions held outside the North American area.(p182)

rule
See chapter 1 of Publication 463 for information on conventions held outside the North American area.