Part 9: Out-of-Town Travel Rules — What You Can Legally Deduct on Business Trips

Out-of-Town Travel Rules — What You Can Legally Deduct on Business Trips (2025)

Business travel is one of the most powerful deductions available to home-business owners — but also one of the most frequently misapplied.
The IRS allows deductions only when travel is ordinary, necessary, and primarily for business.
This guide explains the 2025 rules for airfare, lodging, meals, mixed-purpose travel, and documentation requirements.

1️⃣ What Counts as Business Travel?

Per IRS rules and the guidance summarized in Chapter 9, travel is deductible only if you are away from your tax home overnight and the trip is primarily for business.

• ✔️ Overnight travel required for business purposes
• ✔️ Conference, training, or client meetings
• ✔️ Travel to meet vendors or suppliers
• ✔️ Travel to evaluate or purchase business tools or equipment

Not deductible: sightseeing trips or vacations with incidental business activity.

2️⃣ Deductible Travel Expenses

According to IRS rules summarized in the course text, deductible business-travel expenses include:

• ✈️ Airfare (round trip if trip is primarily business)
• 🏨 Lodging
• 🚕 Uber/Lyft, taxis, shuttles
• 🚗 Rental car expenses
• 📞 Business calls & Wi-Fi fees
• 📦 Shipping materials or display items
• 🧾 Dry cleaning for the trip

3️⃣ Meal Deduction Limits

Business-travel meals are deductible at 50% — unless provided by a conference or reimbursed. The 100% temporary allowance expired; 50% is the correct rate for 2025.

Meal deductions include:

• ✔️ Restaurant meals while traveling
• ✔️ Tips and taxes included in the 50% rule

4️⃣ Mixed Business + Personal Trips

When a trip includes both business and personal activities, the IRS looks at the primary purpose.

• ✔️ If the primary purpose is business → airfare is deductible
• ✔️ Only business-day lodging is deductible
• ✔️ Personal-day meals or lodging are not deductible

5️⃣ International Travel Rules

International business travel has additional requirements.
Deductions depend on how many days are devoted to business vs leisure.

• 🌍 If trip is 75%+ business → airfare fully deductible
• 🌍 If less than 75% business → airfare must be prorated
• 🌍 Lodging and meals follow the standard 50% meal deduction rule

6️⃣ Real Examples

7️⃣ Required Records for IRS Compliance

Apps like Expensify, QuickBooks, and TripLog help maintain clean travel documentation for IRS audits.

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