Travel and Local Transportation

Travel expenses generally are those business related expenses for trips that require you to spend the night away from home - for example, the cost of travel to a distant city to attend a business-related function or convention. Local transportation expenses generally are those business related expenses for trips you make in the area of your tax home - for example, the cost of transportation to call on customers or make deliveries in the city where you work and its suburbs.

You must be able to prove your expenses for travel and transportation. Deductions for travel and transportation are looked at closely when the IRS examines returns. For more information, see Recordkeeping, later.

Travel

Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home.

If you temporarily travel away from your tax home on business, you can deduct your ordinary and necessary travel expenses. You cannot deduct lavish or extravagant expenses or those for personal or vacation purposes.

You can deduct all your travel expenses, subject to certain limits, if your trip was entirely business related. This includes expenses for attending a seminar, meeting, convention, or other function if you can show that your attendance benefits your business. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a nonbusiness side trip, or had other nonbusiness activities, you can deduct only 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.

Example. You live in and conduct your direct selling business from Atlanta and take a business trip to New Orleans. On your way home, you stop in Mobile to visit your parents. You spend $830 for the 9 days you are away from home for transportation, 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 $730. You can deduct $730 for your trip, including the cost of round-trip transportation to and from New Orleans. The cost of your meals is subject to the 50% limit on meals explained later.

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.

For more information, see Publication 463.

Local Transportation

You can deduct local transportation expenses for your business. Generally, local transportation expense is the cost of getting from one workplace to another in the course of your business when traveling within the city or general area that is your tax home, or of getting from your home to a temporary work location. It includes the following kinds of trips you make in the area where you live and work.

• Visiting clients or customers.
• Attending business meetings away from your workplace.

Transportation expenses include train, bus, and cab fares, car rental fees, and the cost of driving and maintaining your car for business transportation. Meals and lodging are not included in transportation expenses.

Commuting expenses. You cannot deduct the cost of transportation between your home and your main or regular place of work. The cost of commuting is a nondeductible personal expense, regardless of the distance or whether work is performed during the trip.

Example. Elaine works full time as a bank teller. She also sells cosmetics part time to her co-workers at the bank. After her customers select items from a catalog, she sends the orders to the cosmetics company. She delivers the items to the bank when she receives them from the company.

Elaine's expense of delivering items is not deductible. Her cost of getting to the bank is a commuting expense. The fact that she carries cosmetics does not make her commuting expense a deductible business expense.

Two places of work. If you work at two places in one day, you can deduct the expense of getting from one workplace to the other. However, if you do not go directly from one location to the other, deduct only the amount it would have cost you to go directly from the first location to the second.

Deductible expenses. If you use your vehicle in your business, see Publication 463 for information on how to figure your expenses for business transportation.