travel expense travelling expenses

How to Deduct Travel Expenses (with Examples)

Reviewed by

November 3, 2022

This article is Tax Professional approved

Good news: most of the regular costs of business travel are tax deductible.

Even better news: as long as the trip is primarily for business, you can tack on a few vacation days and still deduct the trip from your taxes (in good conscience).

I am the text that will be copied.

Even though we advise against exploiting this deduction, we do want you to understand how to leverage the process to save on your taxes, and get some R&R while you’re at it.

Follow the steps in this guide to exactly what qualifies as a travel expense, and how to not cross the line.

The travel needs to qualify as a “business trip”

Unfortunately, you can’t just jump on the next plane to the Bahamas and write the trip off as one giant business expense. To write off travel expenses, the IRS requires that the primary purpose of the trip needs to be for business purposes.

Here’s how to make sure your travel qualifies as a business trip.

1. You need to leave your tax home

Your tax home is the locale where your business is based. Traveling for work isn’t technically a “business trip” until you leave your tax home for longer than a normal work day, with the intention of doing business in another location.

2. Your trip must consist “mostly” of business

The IRS measures your time away in days. For a getaway to qualify as a business trip, you need to spend the majority of your trip doing business.

For example, say you go away for a week (seven days). You spend five days meeting with clients, and a couple of days lounging on the beach. That qualifies as business trip.

But if you spend three days meeting with clients, and four days on the beach? That’s a vacation. Luckily, the days that you travel to and from your location are counted as work days.

3. The trip needs to be an “ordinary and necessary” expense

“Ordinary and necessary ” is a term used by the IRS to designate expenses that are “ordinary” for a business, given the industry it’s in, and “necessary” for the sake of carrying out business activities.

If there are two virtually identical conferences taking place—one in Honolulu, the other in your hometown—you can’t write off an all-expense-paid trip to Hawaii.

Likewise, if you need to rent a car to get around, you’ll have trouble writing off the cost of a Range Rover if a Toyota Camry will get you there just as fast.

What qualifies as “ordinary and necessary” can seem like a gray area at times, and you may be tempted to fudge it. Our advice: err on the side of caution. if the IRS chooses to investigate and discovers you’ve claimed an expense that wasn’t necessary for conducting business, you could face serious penalties .

4. You need to plan the trip in advance

You can’t show up at Universal Studios , hand out business cards to everyone you meet in line for the roller coaster, call it “networking,” and deduct the cost of the trip from your taxes. A business trip needs to be planned in advance.

Before your trip, plan where you’ll be each day, when, and outline who you’ll spend it with. Document your plans in writing before you leave. If possible, email a copy to someone so it gets a timestamp. This helps prove that there was professional intent behind your trip.

The rules are different when you travel outside the United States

Business travel rules are slightly relaxed when you travel abroad.

If you travel outside the USA for more than a week (seven consecutive days, not counting the day you depart the United States):

You must spend at least 75% of your time outside of the country conducting business for the entire getaway to qualify as a business trip.

If you travel outside the USA for more than a week, but spend less than 75% of your time doing business, you can still deduct travel costs proportional to how much time you do spend working during the trip.

For example, say you go on an eight-day international trip. If you spend at least six days conducting business, you can deduct the entire cost of the trip as a business expense—because 6 is equivalent to 75% of your time away, which, remember, is the minimum you must spend on business in order for the entire trip to qualify as a deductible business expense.

But if you only spend four days out of the eight-day trip conducting business—or just 50% of your time away—you would only be able to deduct 50% of the cost of your travel expenses, because the trip no longer qualifies as entirely for business.

List of travel expenses

Here are some examples of business travel deductions you can claim:

• Plane, train, and bus tickets between your home and your business destination
• Baggage fees
• Laundry and dry cleaning during your trip
• Rental car costs
• Hotel and Airbnb costs
• 50% of eligible business meals
• 50% of meals while traveling to and from your destination

On a business trip, you can deduct 100% of the cost of travel to your destination, whether that’s a plane, train, or bus ticket. If you rent a car to get there, and to get around, that cost is deductible, too.

The cost of your lodging is tax deductible. You can also potentially deduct the cost of lodging on the days when you’re not conducting business, but it depends on how you schedule your trip. The trick is to wedge “vacation days” in between work days.

Here’s a sample itinerary to explain how this works:

Thursday: Fly to Durham, NC. Friday: Meet with clients. Saturday: Intermediate line dancing lessons. Sunday: Advanced line dancing lessons. Monday: Meet with clients. Tuesday: Fly home.

Thursday and Tuesday are travel days (remember: travel days on business trips count as work days). And Friday and Monday, you’ll be conducting business.

It wouldn’t make sense to fly home for the weekend (your non-work days), only to fly back into Durham for your business meetings on Monday morning.

So, since you’re technically staying in Durham on Saturday and Sunday, between the days when you’ll be conducting business, the total cost of your lodging on the trip is tax deductible, even if you aren’t actually doing any work on the weekend.

It’s not your fault that your client meetings are happening in Durham—the unofficial line dancing capital of America .

Meals and entertainment during your stay

Even on a business trip, you can only deduct a portion of the meal and entertainment expenses that specifically facilitate business. So, if you’re in Louisiana closing a deal over some alligator nuggets, you can write off 50% of the bill.

Just make sure you make a note on the receipt, or in your expense-tracking app , about the nature of the meeting you conducted—who you met with, when, and what you discussed.

On the other hand, if you’re sampling the local cuisine and there’s no clear business justification for doing so, you’ll have to pay for the meal out of your own pocket.

Meals and entertainment while you travel

While you are traveling to the destination where you’re doing business, the meals you eat along the way can be deducted by 50% as business expenses.

This could be your chance to sample local delicacies and write them off on your tax return. Just make sure your tastes aren’t too extravagant. Just like any deductible business expense, the meals must remain “ordinary and necessary” for conducting business.

How Bench can help

Surprised at the kinds of expenses that are tax-deductible? Travel expenses are just one of many unexpected deductible costs that can reduce your tax bill. But with messy or incomplete financials, you can miss these tax saving expenses and end up with a bigger bill than necessary.

Enter Bench, America’s largest bookkeeping service. With a Bench subscription, your team of bookkeepers imports every transaction from your bank, credit cards, and merchant processors, accurately categorizing each and reviewing for hidden tax deductions. We provide you with complete and up-to-date bookkeeping, guaranteeing that you won’t miss a single opportunity to save.

Want to talk taxes with a professional? With a premium subscription, you get access to unlimited, on-demand consultations with our tax professionals. They can help you identify deductions, find unexpected opportunities for savings, and ensure you’re paying the smallest possible tax bill. Learn more .

Bringing friends & family on a business trip

Don’t feel like spending the vacation portion of your business trip all alone? While you can’t directly deduct the expense of bringing friends and family on business trips, some costs can be offset indirectly.

Driving to your destination

Have three or four empty seats in your car? Feel free to fill them. As long as you’re traveling for business, and renting a vehicle is a “necessary and ordinary” expense, you can still deduct your business mileage or car rental costs even when others join you for the ride.

One exception: If you incur extra mileage or “unnecessary” rental costs because you bring your family along for the ride, the expense is no longer deductible because it isn’t “necessary or ordinary.”

For example, let’s say you had to rent an extra large van to bring your children on a business trip. If you wouldn’t have needed to rent the same vehicle to travel alone, the expense of the extra large van no longer qualifies as a business deduction.

Renting a place to stay

Similar to the driving expense, you can only deduct lodging equivalent to what you would use if you were travelling alone.

However, there is some flexibility. If you pay for lodging to accommodate you and your family, you can deduct the portion of lodging costs that is equivalent to what you would pay only for yourself .

For example, let’s say a hotel room for one person costs $100, but a hotel room that can accommodate your family costs $150. You can rent the $150 option and deduct $100 of the cost as a business expense—because $100 is how much you’d be paying if you were staying there alone.

This deduction has the potential to save you a lot of money on accommodation for your family. Just make sure you hold on to receipts and records that state the prices of different rooms, in case you need to justify the expense to the IRS

Heads up. When it comes to AirBnB, the lines get blurry. It’s easy to compare the cost of a hotel room with one bed to a hotel room with two beds. But when you’re comparing significantly different lodgings, with different owners—a pool house versus a condo, for example—it becomes hard to justify deductions. Sticking to “traditional” lodging like hotels and motels may help you avoid scrutiny during an audit. And when in doubt: ask your tax advisor.

So your trip is technically a vacation? You can still claim any business-related expenses

The moment your getaway crosses the line from “business trip” to “vacation” (e.g. you spend more days toasting your buns than closing deals) you can no longer deduct business travel expenses.

Generally, a “vacation” is:

• A trip where you don’t spend the majority of your days doing business
• A business trip you can’t back up with correct documentation

However, you can still deduct regular business-related expenses if you happen to conduct business while you’re on vacay.

For example, say you visit Portland for fun, and one of your clients also lives in that city. You have a lunch meeting with your client while you’re in town. Because the lunch is business related, you can write off 50% of the cost of the meal, the same way you would any other business meal and entertainment expense . Just make sure you keep the receipt.

Meanwhile, the other “vacation” related expenses that made it possible to meet with this client in person—plane tickets to Portland, vehicle rental so you could drive around the city—cannot be deducted; the trip is still a vacation.

If your business travel is with your own vehicle

There are two ways to deduct business travel expenses when you’re using your own vehicle.

• Actual expenses method
• Standard mileage rate method

Actual expenses is where you total up the actual cost associated with using your vehicle (gas, insurance, new tires, parking fees, parking tickets while visiting a client etc.) and multiply it by the percentage of time you used it for business. If it was 50% for business during the tax year, you’d multiply your total car costs by 50%, and that’d be the amount you deduct.

Standard mileage is where you keep track of the business miles you drove during the tax year, and then you claim the standard mileage rate .

The cost of breaking the rules

Don’t bother trying to claim a business trip unless you have the paperwork to back it up. Use an app like Expensify to track business expenditure (especially when you travel for work) and master the art of small business recordkeeping .

If you claim eligible write offs and maintain proper documentation, you should have all of the records you need to justify your deductions during a tax audit.

Speaking of which, if your business is flagged to be audited, the IRS will make it a goal to notify you by mail as soon as possible after your filing. Usually, this is within two years of the date for which you’ve filed. However, the IRS reserves the right to go as far back as six years.

Tax penalties for disallowed business expense deductions

If you’re caught claiming a deduction you don’t qualify for, which helped you pay substantially less income tax than you should have, you’ll be penalized. In this case, “substantially less” means the equivalent of a difference of 10% of what you should have paid, or $5,000—whichever amount is higher.

The penalty is typically 20% of the difference between what you should have paid and what you actually paid in income tax. This is on top of making up the difference.

Ultimately, you’re paying back 120% of what you cheated off the IRS.

If you’re slightly confused at this point, don’t stress. Here’s an example to show you how this works:

Suppose you would normally pay $30,000 income tax. But because of a deduction you claimed, you only pay $29,000 income tax.

If the IRS determines that the deduction you claimed is illegitimate, you’ll have to pay the IRS $1200. That’s $1000 to make up the difference, and $200 for the penalty.

Form 8275 can help you avoid tax penalties

If you think a tax deduction may be challenged by the IRS, there’s a way you can file it while avoiding any chance of being penalized.

File Form 8275 along with your tax return. This form gives you the chance to highlight and explain the deduction in detail.

In the event you’re audited and the deduction you’ve listed on Form 8275 turns out to be illegitimate, you’ll still have to pay the difference to make up for what you should have paid in income tax—but you’ll be saved the 20% penalty.

Unfortunately, filing Form 8275 doesn’t reduce your chances of being audited.

Where to claim travel expenses

If you’re self-employed, you’ll claim travel expenses on Schedule C , which is part of Form 1040.

When it comes to taking advantage of the tax write-offs we’ve discussed in this article—or any tax write-offs, for that matter—the support of a professional bookkeeping team and a trusted CPA is essential.

Accurate financial statements will help you understand cash flow and track deductible expenses. And beyond filing your taxes, a CPA can spot deductions you may have overlooked, and represent you during a tax audit.

Learn more about how to find, hire, and work with an accountant . And when you’re ready to outsource your bookkeeping, try Bench .

Join over 140,000 fellow entrepreneurs who receive expert advice for their small business finances

Get a regular dose of educational guides and resources curated from the experts at Bench to help you confidently make the right decisions to grow your business. No spam. Unsubscribe at any time.

Everything You Need to Know About the Business Travel Tax Deduction

Justin is an IRS Enrolled Agent, allowing him to represent taxpayers before the IRS. He loves helping freelancers and small business owners save on taxes. He is also an attorney and works part-time with the Keeper Tax team.

You don’t have to fly first class and stay at a fancy hotel to claim travel expense tax deductions. Conferences, worksite visits, and even a change of scenery can (sometimes) qualify as business travel.

What counts as business travel?

The IRS does have a few simple guidelines for determining what counts as business travel. Your trip has to be:

• Mostly business
• An “ordinary and necessary” expense
• Someplace far away from your “tax home”

What counts as "mostly business"?

The IRS will measure your time away in days. If you spend more days doing business activities than not, your trip is considered "mostly business". Your travel days are counted as work days.

Special rules for traveling abroad

If you are traveling abroad for business purposes, you trip counts as " entirely for business " as long as you spend less than 25% of your time on personal activities (like vacationing). Your travel days count as work days.

So say you you head off to Zurich for nine days. You've got a seven-day run of conference talks, client meetings, and the travel it takes to get you there. You then tack on two days skiing on the nearby slopes.

Good news: Your trip still counts as "entirely for business." That's because two out of nine days is less than 25%.

What is an “ordinary and necessary” expense?

“Ordinary and necessary” means that the trip:

• Makes sense given your industry, and
• Was taken for the purpose of carrying out business activities

If you have a choice between two conferences — one in your hometown, and one in London — the British one wouldn’t be an ordinary and necessary expense.

What is your tax home?

A taxpayer can deduct travel expenses anytime you are traveling away from home but depending on where you work the IRS definition of “home” can get complicated.

Your tax home is often — but not always — where you live with your family (what the IRS calls your "family home"). When it comes to defining it, there are two factors to consider:

• What's your main place of business, and
• How large is your tax home

What's your main place of business?

If your main place of business is somewhere other than your family home, your tax home will be the former — where you work, not where your family lives.

For example, say you:

• Live with your family in Chicago, but
• Work in Milwaukee during the week (where you stay in hotels and eat in restaurants)

Then your tax home is Milwaukee. That's your main place of business, even if you travel back to your family home every weekend.

How large is your tax home?

In most cases, your tax home is the entire city or general area where your main place of business is located.

The “entire city” is easy to define but “general area” gets a bit tricker. For example, if you live in a rural area, then your general area may span several counties during a regular work week.

Rules for business travel

Want to check if your trip is tax-deductible? Make sure it follows these rules set by the IRS.

1. Your trip should take you away from your home base

A good rule of thumb is 100 miles. That’s about a two hour drive, or any kind of plane ride. To be able to claim all the possible travel deductions, your trip should require you to sleep somewhere that isn’t your home.

2. You should be working regular hours

In general, that means eight hours a day of work-related activity.

It’s fine to take personal time in the evenings, and you can still take weekends off. But you can’t take a half-hour call from Disneyland and call it a business trip.

Here's an example. Let’s say you’re a real estate agent living in Chicago. You travel to an industry conference in Las Vegas. You go to the conference during the day, go out in the evenings, and then stay the weekend. That’s a business trip!

3. The trip should last less than a year

Once you’ve been somewhere for over a year, you’re essentially living there. However, traveling for six months at a time is fine!

For example, say you’re a freelancer on Upwork, living in Seattle. You go down to stay with your sister in San Diego for the winter to expand your client network, and you work regular hours while you’re there. That counts as business travel.

What about digital nomads?

With the rise of remote-first workplaces, many freelancers choose to take their work with them as they travel the globe. There are a couple of requirements these expats have to meet if they want to write off travel costs.

Requirement #1: A tax home

Digital nomads have to be able to claim a particular foreign city as a tax home if they want to write off any travel expenses. You don't have to be there all the time — but it should be your professional home base when you're abroad.

For example, say you've rent a room or a studio apartment in Prague for the year. You regularly call clients and finish projects from there. You still travel a lot, for both work and play. But Prague is your tax home, so you can write off travel expenses.

Requirement #2: Some work-related reason for traveling

As long as you've got a tax home and some work-related reason for traveling, these excursion count as business trips. Plausible reasons include meeting with local clients, or attending a local conference and then extending your stay.

However, if you’re a freelance software developer working from Thailand because you like the weather, that unfortunately doesn't count as business travel.

The travel expenses you can write off

As a rule of thumb, all travel-related expenses on a business trip are tax-deductible. You can also claim meals while traveling, but be careful with entertainment expenses (like going out for drinks!).

Here are some common travel-related write-offs you can take.

🛫 All transportation

Any transportation costs are a travel tax deduction. This includes traveling by airplane, train, bus, or car. Baggage fees are deductible, and so are Uber rides to and from the airport.

Just remember: if a client is comping your airfare, or if you booked your ticket with frequent flier miles, then it isn't deductible since your cost was $0.

If you rent a car to go on a business trip, that rental is tax-deductible. If you drive your own vehicle, you can either take actual costs or use the standard mileage deduction. There's more info on that in our guide to deducting car expenses .

Hotels, motels, Airbnb stays, sublets on Craigslist, even reimbursing a friend for crashing on their couch: all of these are tax-deductible lodging expenses.

🥡 Meals while traveling

If your trip has you staying overnight — or even crashing somewhere for a few hours before you can head back — you can write off food expenses. Grabbing a burger alone or a coffee at your airport terminal counts! Even groceries and takeout are tax-deductible.

One important thing to keep in mind: You can usually deduct 50% of your meal costs. For 2021 and 2022, meals you get at restaurants are 100% tax-deductible. Go to the grocery store, though, and you’re limited to the usual 50%.

{upsell_block}

🌐 Wi-Fi and communications

Wi-Fi — on a plane or at your hotel — is completely deductible when you’re traveling for work. This also goes for other communication expenses, like hotspots and international calls.

If you need to ship things as part of your trip — think conference booth materials or extra clothes — those expenses are also tax-deductible.

👔 Dry cleaning

Need to look your best on the trip? You can write off related expenses, like laundry charges.

{write_off_block}

Travel expenses you can't deduct

Some travel costs may seem like no-brainers, but they're not actually tax-deductible. Here are a couple of common ones to watch our for.

The cost of bringing your child or spouse

If you bring your child or spouse on a business trip, your travel expense deductions get a little trickier. In general, the cost of bring other people on a business trip is considered personal expense — which means it's not deductible.

You can only deduct travel expenses if your child or spouse:

• Is an employee,
• Has a bona fide business purpose for traveling with you, and
• Would otherwise be allowed to deduct the travel expense on their own

Some hotel bill charges

Staying in a hotel may be required for travel purposes. That's why the room charge and taxes are deductible.

Some additional charges, though, won't qualify. Here are some examples of fees that aren't tax-deductible:

• Gym or fitness center fees
• Movie rental fees
• Game rental fees

{email_capture}

Where to claim travel expenses when filing your taxes

If you are self-employed, you will claim all your income tax deduction on the Schedule C. This is part of the Form 1040 that self-employed people complete ever year.

What happens if your business deductions are disallowed?

If the IRS challenges your business deduction and they are disallowed, there are potential penalties. This can happen if:

• The deduction was not legitimate and shouldn't have been claimed in the first place, or
• The deduction was legitimate, but you don't have the documentation to support it

When does the penalty come into play?

The 20% penalty is not automatic. It only applies if it allowed you to pay substantially less taxes than you normally would. In most cases, the IRS considers “substantially less” to mean you paid at least 10% less.

In practice, you would only reach this 10% threshold if the IRS disqualified a significant number of your travel deductions.

How much is the penalty?

The penalty is normally 20% of the difference between what you should have paid and what you actually paid. You also have to make up the original difference.

In total, this means you will be paying 120% of your original tax obligation: your original obligation, plus 20% penalty.

Justin W. Jones, EA, JD

Over 1M freelancers trust Keeper with their taxes

Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.

Sign up for Tax University

Get the tax info they should have taught us in school

Expense tracking has never been easier

What tax write-offs can I claim?

At Keeper, we’re on a mission to help people overcome the complexity of taxes. We’ve provided this information for educational purposes, and it does not constitute tax, legal, or accounting advice. If you would like a tax expert to clarify it for you, feel free to sign up for Keeper. You may also email [email protected] with your questions.

Voted best tax app for freelancers

More Articles to Read

Free Tax Tools

1099 Tax Calculator

• Quarterly Tax Calculator

How Much Should I Set Aside for 1099 Taxes?

Keeper users have found write-offs worth

• Affiliate program
• Partnership program
• Tax bill calculator
• Tax rate calculator
• Tax deduction finder
• Quarterly tax calculator
• Ask an accountant
• Terms of Service
• Privacy Policy
• Affiliate Program
• Partnership Program
• Tax Bill Calculator
• Tax Rate Calculator
• Tax Deduction Finder
• Ask an Accountant

How to find deductions for travel expenses

With more consultants and business travelers hitting the road for business travel, it's time for a brush-up on what expenses are eligible for tax deduction while they're away. If you're unsure about what qualifies, read on.

Find out more about Business Taxes

by   Grace L. Williams

​Grace L. Williams is a journalist. Her areas of expertise include small business, career, personal finance, and inve...

Read more...

Updated on: October 27, 2023 · 15 min read

Key takeaways

What is business travel or a business trip, what is a business-related travel expense, what business travel expenses are tax deductible, are there other tax deductions for travel expenses, tracking expenses on your business trip, importance of documentation, combining business and personal travel, special considerations for self-employed individuals, getting help with tax deductions for travel expenses, frequently asked questions.

Business travel is back after the pandemic, and with that increase comes the age-old question every business traveler must ask at least once: "What can I deduct as a business expense while I'm on the road?"

You've likely heard the term "write-off" somewhere and may have used it somewhere within your business circles. But what exactly is it? You might wonder if you can book first-class travel or five-star lodging and eat in fancy dining establishments and then submit them as business write-offs. The short, overarching rule for those specifics is no, you probably cannot, but there is more to eligible business travel expenses than that.

So before you book travel arrangements on your credit card (hopefully a designated business credit card), read on for more information about making expensing your business travel less stressful.

• Understand IRS guidelines for deductible travel expenses to maximize tax savings.
• Proper documentation is essential for claiming deductions, including meals and entertainment, with a clear business justification.
• Utilize tax professionals and leverage technology to ensure accurate deductions, compliance with laws, and maximum savings on travel expense deductions.

Simply put, business travel or a business trip is defined as any travel conducted that is business-related. To be considered eligible as a business trip, the travel itself must meet the following criteria:

• The trip must be conducted for legitimate business purposes, not as leisure time, vacation, or personal purposes.
• The trip must occur outside the bounds of a regular commute to and from work (or the main place of business) and home.

If the trip meets these criteria, it falls under the category of a business trip. It also means that you can deduct travel expenses whether you are a business owner sending an employee on your behalf or a self-employed individual.

To better understand business-related travel expenses, it's a good idea to look at overall business expenses. A business expense is incurred as part of the regular day-to-day operations of your employer (or for you if you are a self-employed individual) to conduct the business. Under current Internal Revenue Service (IRS) laws, special rules allow portions of business expenses to be deducted from the overall business income. These expenses are considered tax deductible, which means they are applied before any taxes are. The umbrella term "write-off" comes from this business tax deduction category.

In business, eligible tax deductions can have a significant impact. Being able to deduct expenses can often  reduce the total overall taxable income . Cumulatively, tax-deductible expenses will likely reduce the total bill when it is time to file your tax return.

A deductible business travel expense is one that you or an employee incur during travel directly related to conducting business. In both instances (a business expense or a business travel expense), it is essential to ensure the expense falls under the category of being for bona fide business purposes. This means that deducting the travel expenses must be something genuinely related to conducting or doing a bona fide business purpose. If it is, its cost can be written off as part of business or business travel-related expenses. It applies to self-employed individuals or employees traveling for an employer or business owner.

So what exactly can you expense?

First and foremost, consider the basics, or the "Big 3" in business travel. Essentials here include these three actual expenses: costs related to how you will get to your destination (travel), where you will stay (lodging), and what you will eat and drink when you are there and in transit. Each category within the Big Three can be an eligible travel expense and, therefore, a tax write-off, but they come with some criteria worth exploring.

Transportation expenses:  If you plan to travel by car, and you will either use a vehicle you lease long-term or your car, there are two choices related to how this mode of transportation might be expensed. One choice is known as the “ standard mileage rate ." Under current IRS allowances, the standard mileage rate deduction for self-employed individuals and employees is 65.5 cents per mile for business-related travel. The rate per mile would apply to any driving conducted to or from the business destination. It would also apply to any driving conducted while you are at the destination if it is business-related. For instance, once at the destination, if driving must be done to run errands, those miles can be added to the total mileage count.

The other vehicle expense option for a business trip is to itemize the individual expenses. Eligible business costs, in this instance, include the lease, insurance, fuel, costs related to the upkeep and maintenance of the vehicle, such as oil changes or tune-ups, and any major repairs on the vehicle, such as fixing a flat tire.

If you are renting a car as part of your transportation expenses and it falls under the ordinary and necessary business travel expense category, the cost to rent a car would qualify as an eligible business expense. Other vehicle-related expenses that qualify for travel deductions include tolls and parking fees.

Actual expenses method

The actual expenses method involves calculating the total cost of vehicle use and multiplying it by the percentage used for business purposes. This includes:

• Depreciation
• Garage rent
• Vehicle registration fees
• Lease payments

To calculate the percentage of business use, divide the total business miles driven by the total miles driven in the year. While this method can lead to larger deductions, it requires detailed record-keeping and more complex calculations than the standard mileage method.

Standard mileage rate

The standard mileage rate allows you to claim a fixed rate per mile driven for business purposes, plus parking fees and tolls. The standard mileage rate for business in the United States is 65.5 cents per mile. The IRS determines This rate annually based on a study of the fixed and variable costs of operating a vehicle for business reasons, such as gas, maintenance, and depreciation.

This method can be used for self-employment, business-related travel, or when using a vehicle for work as an independent contractor. However, personal use of the vehicle is not eligible for this deduction.

Ticketed travel:  For ticketed travel, like flights or trips by train, the cost of your ticket can be expensed as a travel deduction if your class fare qualifies as an eligible and reasonable expense. This means that while you likely won't be able to deduct first-class fare, you can deduct what is known as the ordinary and necessary expense related to the fare, which covers classes such as economy. You can also expense costs incurred while en route, such as baggage fees. And, if you are waiting at an airport or train station, any meal costs, snacks, or drinks would also qualify as business-related expenses.

Meal expenses and entertainment:  Business meals cut eligible business expenses but with some stipulations, including the standard meal allowance. While current IRS laws permit for up to 50% of a business meal to be deducted, like ticketed travel, rental cars, and other business-travel-related costs, the meal must fall under an ordinary and necessary expense to be eligible as a tax-deductible business expense. If you are tempted to go all out and splurge on your dining, you might find that it is not an eligible business travel expense.

But changes have been made to the entertainment category. While entertainment used to be an allowed business expense, it is sometimes no longer eligible to claim tax deductions. This means that if you expect to take clients out as part of client meetings or conduct business, be sure to read the fine print since you might discover you cannot claim entertainment as a legitimate business expense.

Lodging expenses:  Business travelers must consider where they will sleep while away. To be considered eligible as a business expense, the location of your stay must be outside of the main place of business and require overnight accommodation. Notably, in this expense category, IRS rules stipulate that for it to be an eligible business expense, the lodging cannot fall into the extravagant or considered recreational category.

Remember:  With each of the "Big 3" and all other related business expenses to be deducted, the expenses must be ordinary and fall under the category of reasonable business expenses. If you opt for pricey vehicles, tickets, meals, and rooms instead of the available moderately-priced alternatives, you risk losing eligibility as legitimate business expenses.

There are some other expenses anyone traveling for business should consider submitting as tax-deductible expenses.

Event fees:  These could come into play if you travel to an event such as a conference, convention, or trade show. In addition to the Big 3, certain expenses related to attending these events would qualify as eligible business travel expenses. The expenses are deductible if the event has an entry or booth fee. While you are there, if you attend workshops, lectures, or courses that require materials such as a workbook or registration, these would also be eligible as tax-deductible travel expenses. And, if you are running a booth or table at an event and need materials or supplies, the cost to purchase them would also qualify as legitimate business expenses.

Incidental expenses:  Any reasonable additional expenses you incur while traveling for a business activity can be considered incidental expenses. For instance, if you incur expenses on ground transportation, a rideshare fee, taxi fare, or a subway ticket qualify as business expenses. Laundry and dry cleaning services are also eligible business activities. In addition, indirect expenses like office supplies can be eligible business expenses.

Organization before, during, and after the business trip will help you avoid potential pitfalls or headaches when filing expenses or taxes. From the outset, one great way to  separate your business trips and expenses from personal expenses  is to have a single credit or debit card that you designate for business use only. This de facto "corporate" card will come in handy and be a best friend on the road since it automatically creates a tally of itemized expenses courtesy of the real-time accounting and monthly statements that come with it.

Beyond the lone card designated for business expenses, your meticulous record-keeping will greatly help you when it's time to account for everything. If you don't want to use a third-party software program or expense-tracking app to track your expenses, a simple solution is to use a basic spreadsheet that tracks the date, the reason for the expense, and the cost. To set this up, once you have incurred an expense, note it down using the aforementioned basic information.

While on the trip, another simple organizational tool is keeping all receipts and other applicable hard-copy records and materials in one designated place. A pouch or envelope will work fine as the place to keep these items. Make sure you read the receipt or record, and if it does not have information such as the name and address of the business, write it on the back before you stash it away. Finally, if a receipt is for something like a business lunch, ensure the date and information about the place of business are on the receipt. Then, write the name of the person you shared your time with and the reason for meeting up somewhere on the receipt.

Claiming travel expense deductions requires proper documentation. This includes retaining receipts and records for all expenses incurred during your business trip. For meals and entertainment expenses, you'll need to note the nature of the meeting, including who you met with, when, and the topics discussed.

It's worth noting that lodging expenses on non-business days may still be eligible for deductions if specific strategies are employed, such as incorporating “vacation days" between workdays. In such cases, the total cost of lodging for the trip can still be tax deductible even when no work is taking place on the weekend. However, meals and entertainment expenses without a clear business justification won't be deductible and must be paid personally.

Allocating expenses between business and personal activities is essential to ensure accurate deduction claims. Expenses must be allocated based on actual usage, so the non-business portion of the expenses may be viewed as taxable income if paid by the individual or company.

To accurately allocate expenses between business and personal activities for tax deductions, follow these steps:

• Track usage for a period of time.
• Determine the allocation by proportionally dividing the expenses based on the amount of business and personal use.
• Maintain proper records to support the allocation.

When combining business and personal travel, careful allocation of expenses and adherence to specific rules is important. Expenses related to the personal nature of the trip cannot be deducted; only those incurred for business purposes can be.

If traveling abroad, you must spend a minimum of 25% of your time conducting business to qualify as a business trip and claim travel expense deductions. If you conduct business for less than 25% of the time while on a trip, you can still deduct travel costs. This deduction must be proportional to the amount of time spent on business.

Rules for international travel

International travel has additional rules to consider when claiming travel expense deductions. As mentioned, you must spend at least 25% of your time abroad conducting business to claim travel-expense deductions.

If you use 25% or less of your trip for business purposes, you can deduct related travel costs in proportion to the time spent on work. This can help to make international business trips more affordable. For example, if 40% of your time is spent on business activities, you can claim the entire cost of airfare as a business expense.

Self-employed individuals should be aware of special considerations when deducting travel expenses, such as  home office deductions  and computer rental fees. Understanding these unique aspects can help self-employed individuals maximize their tax savings and ensure compliance with tax laws, especially regarding their tax home.

Home office considerations

Home office deductions can be claimed if the office is the primary place of business and is regularly used for business purposes. The IRS has specific guidelines for the regular use of a home office for business purposes, such as the office being used exclusively and regularly for business purposes.

To claim a home office deduction, you can use the simplified method the IRS provides. Here's how it works:

• Multiply the allowable square footage of your home office by the prescribed rate of $5 per square foot.
• The maximum allowable square footage is 300 square feet, so the maximum deduction you can claim using this method is $1,500 annually.
• The simplified option allows for a standard deduction without the need for detailed record-keeping.

Deducting computer rental fees

Computer rental fees can be deducted if the equipment is used for business during the trip. The full cost of the computer rental may be deducted as a business expense.

To claim a deduction for computer rental fees from business travel expenses, you must provide relevant documentation demonstrating the rental fees paid, such as receipts or invoices. Proper record-keeping is essential to support your deduction and ensure compliance with IRS regulations.

Leveraging technology

Technology, such as expense tracking apps and online bookkeeping services, can simplify record-keeping and documentation for travel expense deductions. These tools can help you track and categorize expenses, making it easier to identify and compute deductible expenses for tax purposes.

Expense tracking applications can:

• Generate reports and summaries of travel expenses
• Be beneficial for tax filing and auditing purposes
• Save time and effort in tracking and documenting your travel expenses
• Ensure accurate deductions and compliance with tax laws

Leveraging technology in expense tracking can be a valuable tool for managing your finances.

Sometimes, you might need more help. This guide provides basic questions about business travel deductions and expenses. Still, you are not alone if you have other questions about what might qualify as a tax-deductible business expense. There are experts at LegalZoom who can answer specific questions and better advise you about both business expenses and business travel-related expenses.

You might have questions about whether specific costs related to your business qualify as ordinary and necessary expenses or wonder if percentages of a certain expense or the entire cost can be completely deductible. Additionally, professionals in the know about things like a specific tax home can help you sort out concerns related to your business so that you can always claim the proper travel expenses. For any consultant looking to get back into the swing of travel, help and practical tips are just a click away.

Understanding and maximizing travel expense deductions can save you significant money on your tax return. By familiarizing yourself with the requirements, maintaining proper documentation, and leveraging the expertise of tax professionals and technology, you can ensure accurate deductions, compliance with tax laws, and, ultimately, keep more money in your pocket.

What kind of travel expenses are tax deductible?

Tax deductible travel expenses include airfare, train/bus fares, taxi rides between an airport or station and a hotel, or from the hotel to a work location.

What are the three requirements for a traveling expense deduction?

To qualify for a traveling expense deduction, you must have a “business trip," leave your tax home, have most of the trip business-related, and plan the trip in advance.

How do I prove travel expenses for taxes?

To prove business travel expenses for taxes, use credit card slips with notes on the business purpose made at the time of incurring the expense.

Are daily travel expenses tax deductible?

Daily travel expenses from your home to a regular place of business are not tax deductible. However, you can deduct transport expenses when traveling between your home and a temporary work location outside the metropolitan area where you live and normally work. Additionally, ordinary and necessary travel expenses incurred while away from your home and your main place of business can be deducted.

How do I allocate expenses between business and personal activities during a combined trip?

Allocate expenses proportionally based on the amount of business and personal use for a period of time, and maintain proper records to support deductions. 

You may also like

What does 'inc.' mean in a company name?

'Inc.' in a company name means the business is incorporated, but what does that entail, exactly? Here's everything you need to know about incorporating your business.

October 9, 2023 · 10min read

How to get an LLC and start a limited liability company

Considering an LLC for your business? The application process isn't complicated, but to apply for an LLC, you'll have to do some homework first.

May 29, 2024 · 11min read

What is a power of attorney (POA)? A comprehensive guide

Setting up a power of attorney to make your decisions when you can't is a smart thing to do because you never know when you'll need help from someone you trust.

May 30, 2024 · 16min read

• Search Search Please fill out this field.

What Are Transportation Expenses?

• How They Work

Special Considerations

• Supply Chain

Transportation Expenses: Definition, How They Work, and Taxation

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas' experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.

The term transportation expense refers to specific costs incurred by an employee or self-employed taxpayer who travels for business purposes. Transportation expenses are a subset of travel expenses, which include all of the costs associated with business travel such as taxi fare, fuel, parking fees, lodging, meals, tips, cleaning, shipping, and telephone charges that employees may incur and claim for reimbursement from their employers. Some transportation expenses may be eligible for a tax deduction on an employee's tax return .

Key Takeaways

• Transportation expenses are a subset of travel expenses that refer specifically to the cost of business transportation by car, plane, train, etc.
• Expenses such as fuel, parking fees, lodging, meals, and telephone charges incurred by employees can be claimed as transportation expenses.
• These expenses may be deducted for tax purposes subject to the appropriate restrictions and guidelines.

How Transportation Expenses Work

Transportation expenses are any costs related to business travel by company employees. An employee who travels for a business trip is generally able to claim the cost of travel, hotel, food, and any other related expense as a transportation expense. These costs may also include those associated with traveling to a temporary workplace from home under some circumstances. For instance, an employee whose travel area is not limited to their tax home can generally claim that travel as a transportation expense.

These expenses, though, are narrower in scope. They only refer to the use of or cost of maintaining a car used for business or transport by rail, air, bus, taxi, or any other means of conveyance for business purposes. These expenses may also refer to deductions for businesses and self-employed individuals when filing tax returns . Commuting to and from the office, however, does not count as a transportation expense.

The cost of commuting is not considered a deductible transportation expense.

Transportation expenses may only qualify for tax deductions if they are directly related to the primary business for which an individual works. For example, if a traveler works in the same business or trade at one or more regular work locations that are away from home such as a construction worker, it is considered a transportation expense.

Similarly, if a traveler has no set workplace but mostly works in the same metropolitan area they live in, they may claim a travel expense if they travel to a worksite outside of their metro area. On the other hand, claiming transportation costs when you have not actually done any traveling for the business is not allowed and can be viewed as a form of tax fraud .

Taxpayers must keep good records in order to claim travel expenses. Receipts and other evidence must be submitted when claiming travel-related reimbursable or tax-deductible expenses.

According to the Internal Revenue Service (IRS) travel or transportation expenses are defined as being: "...the ordinary and necessary expenses of traveling away from home for your business, profession, or job." And it further defines "traveling away from home" as duties that "...require you to be away from the general area of your tax home substantially longer than an ordinary day's work, and you need to sleep or rest to meet the demands of your work while away from home."

The IRS provides guidelines for transportation expenses, deductibility, depreciation, conditions, exceptions , reimbursement rates, and more in Publication 463 . The publication sets the per-mile reimbursement rate for operating your personal car for business. Travelers who use their vehicles for work can claim 58.5 cents per mile for the 2022 tax year , increasing to 62.5 cents for the remaining six months. That's up from 56 cents eligible for 2021. The IRS' determined rate treated as  depreciation  for the business standard mileage is 26 cents as of Jan. 1, 2021.

Internal Revenue Service. " Topic No. 511 Business Travel Expenses ."

Internal Revenue Service. " 2022 Standard Mileage Rates ," Pages 3-4.

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

The Best Guide to Deductibility of Travel Expenses

• Bookkeeping

Other articles you may like...

Failing to File: What are the Penalties?

How to Start a Business in DC

Custom Business Chart of Accounts: Benefits, Tips, and Tax Savings

Understanding Owner’s Equity: Calculations and Importance

Cleer Tax provides flat-rate accounting services for U.S. startups, often with foreign ownership, and growing businesses, to do it right from the start. Our all-inclusive accounting packages provide tax preparation, and bookkeeping to fit any budget and growth stage. Our tech-forward, streamlined process provides the Cleer path to success for your startup.

Get In Touch

© 2024 Cleer Tax, LLC. All Rights Reserved · Privacy Policy · Terms & Conditions  · Website by ModernTraction.com

Start your financial journey on the right foot

Get $50 discount off your tax package..

• Search Search Please fill out this field.
• Building Your Business
• Business Taxes

7 Rules You Should Know About Deducting Business Travel Expenses

• What Is Your "Tax Home"?

Charges on Your Hotel Bill

The 50% rule for meals, the cost of bringing a spouse, friend or employee.

• Using Per Diems To Calculate Employee Travel Costs

Combined Business/Personal Trips

International business travel.

• The Cost of a Cruise (Within Limits)

Frequently Asked Questions (FAQs)

Helde Benser / Getty Images

The IRS has a specific definition for business travel when it comes to determining whether these expenses are tax deductible. The agency says business travel is travel that takes you away from your tax home and is "substantially longer than an ordinary day's work." It requires that you sleep or rest while you're away from home, and that you do so. The travel must be "temporary." This means it can't last a year or more.

Key Takeaways

• You can deduct expenses that take you away from your tax home for a period of time that would require you to spend the night.
• Your tax home is the city or area where your regular place of business is located.
• You’re limited to 50% of the cost of your meals.
• Your trip must be entirely business-related for costs to be deductible, but special rules apply if you travel outside the U.S.

What Is Your "Tax Home"?

Your tax home is a concept set by the IRS to help determine whether a trip is tax deductible. It's defined by the IRS as the entire city or general area where your regular place of business is located. It's not necessarily the area where you live. 

Your tax home can be used to determine whether your business travel expenses are deductible after you've determined where it's located. You can probably count your expenses during travel as business deductions if you have to leave your tax home overnight or if you otherwise need time to rest and sleep while you're away.

Check with a tax professional to make sure you're accurately identifying the location of your tax home.

Charges for your room and associated tax are deductible, as are laundry expenses and charges for phone calls or for use of a fax machine. Tips are deductible as well. But additional personal charges, such as gym fees or fees for movies or games aren't deductible.

You can deduct the cost of meals while you're traveling, but entertainment expenses are no longer deductible and you can't deduct "lavish or extravagant" meals. 

Meal costs are deductible at 50%. The 50% limit also applies to taxes and tips. You can use either your actual costs or a standard meal allowance to take a meal cost deduction, as long as it doesn't exceed the 50% limit.

The cost of bringing a spouse, child, or anyone else along on a business trip is considered a personal expense and isn't deductible. But you may be able to deduct travel expenses for the individual if:

• The person is an employee
• They have a bona fide business purpose for traveling with you
• They would otherwise be allowed to deduct travel expenses

You may be able to deduct the cost of a companion's travel if you can prove that the other person is employed by the business and is performing substantial business-related tasks while on the trip. This may include taking minutes at meetings or meeting with business clients.

Using Per Diems To Calculate Employee Travel Costs 

The term "per diem" means "per day." Per diems are amounts that are considered reasonable for daily meals and miscellaneous expenses while traveling. 

Per diem rates are set for U.S. and overseas travel, and the rates differ depending on the area. They're higher in larger U.S. cities than for sections of the country outside larger metropolitan areas. Companies can set their own per diem rates, but most businesses use the rates set by the U.S. government.

Per diem reimbursements aren't taxable unless they're greater than the maximum rate set by the General Service Administration. The excess is taxable to the employee.

If you don't spend all your time on business activities during an international trip, you can only deduct the business portion of getting to and from the destination. You must allocate costs between business and personal activities.

Your trip must be entirely business-related for you to take deductions for travel costs if you remain in the U.S., but some "incidental" personal time is okay. It would be incidental to the main purpose of your trip if you travel to Dallas for business and you spend an evening with family in the area while you're there. 

But attempting to turn a personal trip into a business trip won't work unless the trip is substantially for business purposes. The IRS indicates that “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."

The rules are different if part or all of your trip takes you outside the U.S. Your international travel may be considered business-related if you were outside the U.S. for more than a week and less than 25% of the time was spent on personal activities. 

You can deduct the costs of your entire trip if it takes you outside the U.S. and you spend the entire time on business activities, but you must have "substantial control" over the itinerary. An employee traveling with you wouldn't have control over the trip, but you would as the business owner would.

 The trip may be considered entirely for business if you spend less than 25% of the time on personal activities if your trip takes you outside the U.S. for more than a week.

You can only deduct the business portion of getting to and from the destination if you don't spend all your time on business activities during an international trip. You must allocate costs between your business and personal activities.

The Cost of a Cruise (Within Limits) 

The cost of a cruise may be deductible up to the specified limit determined by the IRS, which is $2,000 per year as of 2022.  You must be able to show that the cruise was directly related to a business event, such as a business meeting or board of directors meeting.

The IRS imposes specific additional strict requirements for deducting cruise travel as a business expense.

How do you write off business travel expenses?

Business travel expenses are entered on Schedule C if you're self-employed . The schedule is filed along with your Form 1040 tax return. It lists all your business income, then you can subtract the cost of your business travel and other business deductions you qualify for to arrive at your taxable income.

What are standard business travel expenses?

Standard business travel expenses include lodging, food, transportation costs , shipping of baggage and/or work items, laundry and dry cleaning, communication costs, and tips. But numerous rules apply so check with a tax professional before you claim them.

The Bottom Line

These tax deduction regulations are complicated, and there are many qualifications and exceptions. Consult with your tax and legal professionals before taking actions that could affect your business. 

IRS. " Topic No. 511: Business Travel Expenses ."

IRS. " Publication 463 (2021), Travel, Gift, and Car Expenses ."

IRS. " Here’s What Taxpayers Need To Know About Business-Related Travel Deductions ."

• Credits and deductions
• Business expenses

Can I deduct travel expenses?

If you’re self-employed or own a business , you can deduct work-related travel expenses, including vehicles, airfare, lodging, and meals. The expenses must be ordinary and necessary.

For vehicle expenses, you can choose between the standard mileage rate or the actual cost method where you track what you paid for gas and maintenance.

You can generally only claim 50% of the cost of your meals while on business-related travel away from your tax home, provided your trip requires an overnight stay. You can also deduct 50% of the cost of meals for entertaining clients (regardless of location), but due to the Tax Cuts and Jobs Act of 2017 (TCJA), you can no longer deduct entertainment expenses in tax years 2018 through 2025. In 2021 and 2022, the law allows a deduction for 100% of your cost of food and beverages that are provided by a restaurant, instead of the usual 50% deduction.

On the other hand, employees can no longer deduct out-of-pocket travel costs in tax years 2018 through 2025 per the TCJA (this does not apply to Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses). Prior to the tax rule change, employees could claim 50% of the cost of unreimbursed meals while on business-related travel away from their tax home if the trip required an overnight stay, as well as other unreimbursed job-related travel costs. These expenses were handled as a 2% miscellaneous itemized deduction.

Related Information:

• Can I deduct medical mileage and travel?
• Can I deduct my moving expenses?
• Can I deduct rent?
• Can I deduct mileage?
• Can employees deduct commuting expenses like gas, mileage, fares, and tolls?

Was this helpful?

Found what you need?

Already have an account? Sign In

• English (UK)
• English (CA)
• Deutsch (DE)
• Deutsch (CH)

2024 guide to travel and expense management

All about travel expense management, pain points of ineffective t&e processes, a need for comprehensive guidelines, lack of control and autonomy for travelers, unauthorized bookings, paying too much for business travel, endless expense admin, lost receipts, inaccurate t&e spend reports, slow reimbursements, lack of real-time t&e cost tracking, what an effective t&e management tool can provide.

• Full visibility into real-time travel spending: With automated expense reports and consolidated travel booking , your finance team will have real-time expense tracking to help them better understand your travel program.
• Options and autonomy for travelers: By integrating company policies, a travel management solution empowers business travelers to choose their own trip options. No need for travelers to pay upfront: Big business travel purchases like airfares and rental cars shouldn’t require travelers to request a reimbursement. When booking on a business travel platform, the company can pay one monthly invoice and reduce admin for everyone.
• No need for travelers to fill out expense reports: The right expense management solution will automate T&E  workflows. A mobile app can scan receipts so travelers don’t have to enter data into the expense management tool manually.
• Fast for office managers to collect invoices: When you consolidate your travel costs into one corporate travel management system , you receive just one invoice at the end of each month.
• Automated purchase reconciliation: Expense data from receipt scans and corporate credit card purchases should be automatically reconciled.
• Automated reimbursement approvals: Automate your company’s T&E  policy with rules so that food or taxi purchases under a certain amount can be automatically reimbursed without needing approvers to review manually.
• Quicker reimbursement funds for travelers: Even with consolidated business travel booking, the odd per diem expense will still be generated on the road. But with an automated expense reimbursement process, your employees won't be left waiting.

The best systems for travel and expense management

Travel management platform.

• Great trip inventory
• Customizable travel policies and approvals
• Monthly invoice to consolidate payments
• High-quality customer support
• Insightful travel spend analytics and reporting
• Easy-to-use mobile app for travelers

Consumer-grade functionality to inspire greater policy compliance Travel and expense management that works like a dream

Expense management platform.

• Receipt scanning to reduce manual data entry
• Automated expense approval and reimbursement workflows
• Rules and automatic approvals for low-cost expenses
• Easy-to-use mobile app for employees
• Corporate card integrations and data importing
• Expense reporting and analytics

3 Top travel expense management solutions

Divvy: for the us.

• Access the funding you need with credit lines up to $15m available to companies of all sizes.
• When spending with Divvy, get rewards on restaurants, hotels, travel, and more.
• Languages supported: English
• Pricing: Free.

Pleo: for the UK

• Pleo integrates with invoicing software to automate payments and offer enhanced spend visibility.
• Easily track out-of-pocket expense claims to ensure swift expense reimbursement in line with your company's policies.
• Languages supported: Danish, German, English, Finnish, French, Dutch, Norwegian, Portuguese, Spanish, and Swedish.
• Starter: free
• Essential: £39/month
• Advanced: £69/month

Yokoy: for DACH

• Yokoy services and products are available individually or as a pack, so you only buy what you need.
• The AI-based tool analyzes and approves standard expenses and automatically creates real-time expense reports.
• Languages supported: German, English, French, Italian, and Chinese.
• Pricing: Based on requirements.

We caught up with Katharina Wodischeck from adsquare to hear her thoughts on Travel & Expense management.

Make business travel simpler. Forever.

• See our platform in action . Trusted by thousands of companies worldwide, TravelPerk makes business travel simpler to manage with more flexibility, full control of spending with easy reporting, and options to offset your carbon footprint.
• Find hundreds of resources on all things business travel, from tips on traveling more sustainably, to advice on setting up a business travel policy, and managing your expenses. Our latest e-books and blog posts have you covered.
• Never miss another update. Stay in touch with us on social for the latest product releases, upcoming events, and articles fresh off the press.
• Business Travel Management
• Offset Carbon Footprint
• Flexible travel
• Travelperk Sustainability Policy
• Corporate Travel Resources
• Corporate Travel Glossary
• For Travel Managers
• For Finance Teams
• For Travelers
• Thoughts from TravelPerk
• Careers Hiring
• User Reviews
• Integrations
• Privacy Center
• Help Center
• Privacy Policy
• Cookies Policy
• Modern Slavery Act | Statement
• Supplier Code of Conduct

• Accounts Payable Software
• Accounts Receivable Software
• Travel & Expense Management
• Payment Automation
• Cash Flow Management
• Account Payable
• Account Receivable
• Travel & Expense
• Finance News
• Press Release
• Get Started

Travel Expense Reimbursement – All You Need to Know

Traveling for business can be exciting and rewarding, but it comes with its challenges, especially when it comes to managing travel expenses. Business travelers often face various expenses like airfare, hotel stays, meals, and transportation. These expenses can add up quickly and become a burden if not reimbursed promptly.

Similarly, for travel managers and finance departments, managing these expenses and receipts can be time-consuming and tedious. 

In this blog, we’ll discuss the travel expense reimbursement process, covering different types of expenses, their importance, and best practices.

What is Travel Expense Reimbursement?

Travel expense reimbursement is the process where a company repays its employees for expenses they incur while traveling for work. These expenses typically include costs for transportation, lodging, meals, and other related expenses. 

Employees are usually required to submit a detailed report of their expenses, including receipts, to the company’s finance department or travel manager. The company then reviews these reports and reimburses the employees for the approved expenses.

Reimbursement is important because it ensures that employees are not out of pocket for expenses related to their work duties. It also helps companies manage their travel budgets effectively by tracking and controlling expenses. Proper reimbursement processes can improve employee satisfaction and ensure compliance with company policies and tax regulations.

What are the Different Categories of Travel Expenses?

During the travel expense reimbursement process, traveling employees, travel managers, and finance departments need to understand the different types of travel expenses:

1. Transportation Expenses

These expenses include the money spent by employees on transportation to their business trip destinations. This can include the cost of flights, cab fares, train tickets, or mileage if employees use their vehicles. For mileage, companies often follow the mileage reimbursement policy, which sets a standard rate per mile driven for business purposes.

2. Accommodation Expenses

Accommodation expenses refer to the costs employees incur for arranging their stays during a business trip. This can include charges for hotel rooms, resorts, lodges, Airbnb rentals, and other forms of lodging. Reimbursement for accommodation is typically based on the company’s travel budget and varies depending on the type and duration of the stay. 

3. Client Entertainment and Meals

These expenses encompass the costs incurred by employees to entertain or engage with clients or prospective clients for business purposes. This can include expenses such as taking clients out for sightseeing, hosting them at live events like sporting events or concerts, and covering the cost of meals and refreshments during these activities. Employees who incur client entertainment and meal expenses are generally eligible for reimbursement.

4. Incidental Expenses

Incidental expenses are nominal costs that employees may incur in addition to major expenses while using certain services during their business trips. These can include expenses such as room service, laundry, and tips to service staff. Companies typically reimburse employees for incidental expenses upon their return from the business trip, provided they are within the company’s reimbursement policy limits.

Understanding these different types of travel expenses is essential to accurately reimburse employees and manage travel budgets effectively.

Why is the Travel Expense Reimbursement Process Important?

The travel expense reimbursement process is important for several reasons:

• Record-keeping: It helps maintain accurate records of all expenses incurred during business travel, which is essential for tax audits and regulatory compliance.
• Cost control: By setting reimbursement limits and requiring receipts, the process helps control costs and prevents overspending.
• Policy compliance: It ensures that employees adhere to company policies and regulations regarding travel and expense management , reducing the risk of non-compliance and legal issues.
• Employee satisfaction: A smooth reimbursement process boosts employee morale by ensuring they are reimbursed promptly and feel valued.

A well-managed travel expense reimbursement process is vital for effective business travel management.

What is a Travel Expense Reimbursement Policy?

A travel expense reimbursement policy is a document that outlines the rules and guidelines for reimbursing employees for business-related travel expenses. It includes details from pre-travel planning to settling reimbursable amounts. The policy specifies which travel expenses are eligible for reimbursement and which are not.

It also sets limits on the amount the company will cover for certain expenses. Additionally, the policy details the procedures for submitting expense reports and obtaining approvals.

How to Create an Effective Travel Expense Reimbursement Policy

Creating a successful travel expense reimbursement policy involves a few key steps:

• Simplicity: Make the policy easy to understand for all employees. This helps streamline the reimbursement process.
• Clarity: Ensure that the policy is clear and easy to follow. Provide detailed instructions on how to submit expenses for reimbursement.
• Organization: Keep the policy well-structured with clear sections. This makes it easier to update and make changes as needed.

By following these guidelines, you can create a travel expense reimbursement policy that is effective and easy for employees to follow.

What Should You Include in a Travel Expense Reimbursement Policy?

A well-defined policy helps employees understand what expenses are covered, and how to claim reimbursement and ensures compliance with company policies and tax regulations . When creating a travel expense reimbursement policy, consider the following:

1. Detailed Expense Categories

Break down expenses into categories like transportation, lodging, meals, and client entertainment. This clarity helps employees understand which expenses are eligible for reimbursement.

2. Eligible Expenses for Reimbursement

Provide a detailed list of expenses that are eligible for reimbursement. This typically includes costs like transportation, accommodation, meals, client gifts, and visa charges.

3. Expenses Not Eligible for Reimbursement

State expenses that will not be reimbursed, such as personal shopping or travel upgrades beyond the budgeted amount.

4. Tax Considerations for Expenses

Explain the tax implications of travel expenses and reimbursements, ensuring compliance with tax regulations. Differentiate between employee allowances and reimbursements for tax purposes.

5. Daily Budget Allocation (Per Diem)

Set daily allowances for each expense category to manage costs effectively. Communicate these rates to encourage employees to stay within budget.

6. Receipt and Documentation Requirements

Specify what receipts and documentation are necessary for reimbursement claims. This ensures that employees provide sufficient evidence of their expenses.

7. Reimbursement Process Details

Describe the process for submitting and processing reimbursement claims. Include information on who is responsible for approving and processing claims, as well as the timeline for reimbursement.

8. Fraud Prevention and Policy Compliance Measures

Outline policies and consequences for fraud attempts or violations of the reimbursement policy. This helps maintain integrity and adherence to the policy.

Step-by-Step Guide to Travel Expense Reimbursement Process

1. Pre-Travel Approval Process

Employees submit a detailed request for their upcoming travel, including destination, dates, purpose, and estimated expenses. The company provides a standardized form or system for employees to submit travel requests, which are then reviewed and approved.

2. Expense Guidelines and Policies Communication

Upon approval, employees receive clear guidelines on what expenses are reimbursable and the limits of the company’s reimbursement policy. The company ensures that employees understand the expense policy and have access to information about allowable expenses and reimbursement procedures .

3. Expense Documentation and Collection

During the trip, employees are required to keep and collect receipts for all expenses, including meals, transportation, accommodation, and any client-related activities. They organize and store these receipts to submit as part of the reimbursement claim.

4. Expense Report Preparation

After returning from the trip, employees compile all expense receipts and details into a comprehensive expense report. The report includes a breakdown of expenses by category, such as meals, lodging, transportation, and any other relevant expenses incurred during the trip.

5. Review and Approval Process

The finance department reviews each expense report to ensure that all expenses are legitimate, accurately documented, and compliant with company policies. Any discrepancies or questionable expenses are flagged and resolved before approval.

6. Reimbursement Processing

Once the expense report is approved, the finance department processes the reimbursement, typically adding it to the employee’s next paycheck or initiating a direct deposit. Reimbursements are calculated as per the approved expenses and the company’s reimbursement rates and policies.

7. Reconciliation and Reporting

The finance department reconciles the reimbursed expenses with the company’s accounting records to ensure accuracy and compliance. Detailed reports are generated to track travel expenses, provide insights for budget planning , and maintain accurate financial records.

What are the Roadblocks in the Travel Expense Reimbursement Process?

Challenges in travel expense reimbursement include:

• Manual Processes: Using manual processes for expense reimbursement can lead to delays and errors. Passing expense reports through multiple hands increases the likelihood of mistakes or fraud, making the process inefficient.
• Unclear Policies: If travel and expense policies are unclear or too complex, it can lead to confusion and delays in reimbursement. Simplifying policies helps employees understand the rules better and ensures compliance.
• Complicated Workflows: Complex approval workflows can hinder the reimbursement process. Straightforward approval processes help ensure quick approvals and smooth progression of claims.

What are the Best Practices for a Smooth Travel Expense Reimbursement Process?

1. develop a comprehensive expense reimbursement policy.

Craft a detailed policy that is easy for employees to understand. Include clear guidelines on what expenses are eligible for reimbursement and how to submit claims. Specify any pre-approval requirements for certain expenses. A comprehensive policy reduces confusion and ensures compliance with company guidelines.

2. Enforce Timely Submission of Expense Reports

Establish deadlines for submitting expense reports and enforce them rigorously. Send reminders to employees as the deadline approaches. Timely submission of expense reports ensures that reimbursements are processed promptly, which contributes to employee satisfaction.

3. Verify Expense Legitimacy and Compliance

Regularly review expense reports to ensure they comply with company policies. Use expense management software to identify any duplicate or out-of-policy expenses. This helps prevent fraud and ensures that reimbursements are fair and accurate.

4. Set Clear Guidelines for Approval

Establish clear guidelines for approving expense reports, including who has the authority to approve expenses and what criteria should be used to evaluate them. This can help ensure consistency and fairness in the expense approval process .

5. Offer Open Communication

Keep employees informed about the reimbursement process through regular communication. Provide updates on policy changes and clarify any confusion regarding reimbursement procedures. Open communication fosters trust and transparency, leading to a smoother reimbursement process.

6. Provide Prompt Reimbursements 

Process reimbursement requests promptly to demonstrate respect for employees’ time and efforts. Delays in reimbursement can lead to frustration and dissatisfaction among employees, so prioritize timely payments whenever possible.

7. Utilize a Centralized Expense Management System

Implement a centralized system for managing travel expenses. This system should allow employees to easily submit expense reports and track their reimbursement status. It should also provide managers with the tools to efficiently review and approve expenses. A centralized system improves efficiency and reduces the risk of errors.

Closing Thoughts

Implementing an effective and efficient travel expense reimbursement process is crucial for organizations to maintain accurate financial records, enhance employee satisfaction, and comply with tax regulations. 

Leveraging technology, such as Peakflo’s Travel and Expense Management Solution , can streamline the process by implementing robust travel expense policies, ensuring policy compliance, and detecting fraudulent attempts. 

By utilizing such tools, organizations can simplify the reimbursement process, reduce errors, and improve overall efficiency in managing travel expenses.

• travel and expense

Understanding Expense Claim: The Ultimate Guide

The ultimate guide to business travel process, what is per diem expense & how is per diem rate calculated, latest post, tesco accounting scandal: overstating profits by £326 million, barclays capital lost millions due to an excel error, ditching legacy systems: the key to a sustainable finance landscape, split payment: streamlining transactions for marketplaces, future-proofing b2b payments: the payment automation handbook.

• Accounts Payable
• Accounts Receivable
• Travel and Expense Management
• B2B Payment Software
• Invoice Management
• Procurement Software
• Product Tour
• Saving Calculator

© 2023 by Peakflo. All rights reserved.

Automated page speed optimizations for fast site performance

• Skip to main content
• Skip to primary sidebar
• Skip to footer

Audit and Accounting Solutions

Travelling Expenses – Meaning, Examples and Journal Entries

March 17, 2022 Runner

The name itself indicates that this travelling expense relates to expenses incurred for travel by entity employees or directors. The purpose of travel shall be connecting to the entity’s business operations. Therefore, the purpose shall not be of personal nature.

Estimated reading time: 5 minutes

Travelling expenses Examples:

Let’s see a couple of instances relating to travelling expenses

• Directors Cost of travel to other City to attend some business meeting or Client meeting
• Cab Expenses (Local Travel)
• Air Fare and insurance charges, if any relating to the business travel
• Expenses incurred for the Meals, Communication charges and WIFI Charges
• Tips or Surcharge paid for using any of the above facilities as part of travel
• Parking Fees, Toll Charges, Cab Waiting Charges and Luggage Porter Charges

What’s the Journal Entry?

Travelling expenses is a Nominal Account that flows into the Profit and Loss A/c. As this GL is an expenditure Account, the appropriate accounting treatment is to debit this GL Account in the Journal Entry .

Let’s see what’s the corresponding Credit.

Credit is for the Liability Account. Here Liability Account is named Cab Charges Payable, Travel Charges Payable etc., based on the nature of the liability.

There might be instances where there is no requirement to recognize the liability like Meals, tips, parking fees etc. These expenditures are paid immediately, and there might not be any bills or invoices. So, the Credit, in this case, is the Cash A/c.

Journal Entry for recording the Travelling expenses:

(Being the travel charges incurred for ABC Manufacturing deal)

(Being the travel charges paid)

Frequently Asked Questions

1) are the travelling expenses of a salesman forms part of direct or indirect expenses.

The category of expenses depends on the nature of the entity’s business.

For Entities exclusively into the Marketing/Product Sales (not manufacturing), the Travel expense of a Salesman is a direct expense. That’s because those expenditures drive the business operations of the entity.

For Entities not falling into the above category, those travel expenses fall into the Marketing Expenses category, which is an indirect expense. Therefore, it depends on the business category in which the entity operates.

2) What does Accommodation expenses mean?

Accommodation Expenses are the expenses relating to hotel or motel stay. These expenses include the Food, Laundry Service, Telephone, Internet expenses, GST and Service Charges. So, these Accommodation expenses are part of travel expenses. Therefore, it qualifies for indirect business expenditure.

The thumb rule here is to check whether the accommodation expenses shall be relatable to the business operations. So, emphasis shall be given to business importance of the expenses.

3) Paid for travelling expenses journal entry:

Paid for Travelling expenses journal entry records the cash/bank payment done for the travel and related expenses incurred for the business purpose. Let’s see the nature of accounts and accounting rules applicable.

Accounts Involved – Travelling expense and Bank Account

Nature of Accounts –

Travelling Expenses is a Nominal A/c – Expenditure and Bank Account is Real A/c – Asset

Accounting Rules:

The Golden rules of accounting applicable in this scenario are below.

Nominal Account: Debit the expenses and Losses Credit the gains and incomes and

Real Account – Debit what comes in and Credit what goes out

Paid for travelling expenses journal entry is

Travelling expenses A/c Dr

To Bank A/c

4) Travelling expenses are debited to which GL account?

There are no rules for the Naming of an Account. The GL Description shall depict the nature of the Account. For example, if the GL relates to telephone expenses, it shall not fall into conveyance expenses. Therefore, the travelling expenses GL is used as a debit to record the travel expenses in general.

Conclusion:

Travelling expenses are the expenses incurred in relation to business travel . The purpose shall not be in a personal nature. The thumb rules are to check if those expenses help further business operations. This travel expenses category is wide enough to cover the accommodation charges, telephone, internet charges, ancillary charges incurred along with the hotel expenditure.

Debit the Travelling expense and Credit the Bank Account to record the Journal Entry. If the transaction happens on a credit basis, two entries are recorded. The first one is to debit the travelling expense, and the Credit is to the Liability Account. The second entry is to debit the Liability account and Credit the bank account. The net effect is knocking off the Liability Credit in the first entry and the Liability debit in the second. So, technically the journal entry is the same as the first scenario. It’s just deferment of recording the complete transaction effect.

Hope this article brings some clarity on the travelling expenses concept. If you have any questions then pls let us know through the comments below.

Recent Posts

• Journal entry for mileage expense
• Journal entry for new vehicle purchase
• Financial Statement Tie out
• Trial Balance vs Balance Sheet
• Fixed asset reconciliation

Blog Whereabouts

• Privacy Policy

Search Posts

An official website of the United States Government

• Kreyòl ayisyen
• Search Toggle search Search Include Historical Content - Any - No Include Historical Content - Any - No Search
• Menu Toggle menu
• INFORMATION FOR…
• Individuals
• Business & Self Employed
• Charities and Nonprofits
• International Taxpayers
• Federal State and Local Governments
• Indian Tribal Governments
• Tax Exempt Bonds
• FILING FOR INDIVIDUALS
• How to File
• When to File
• Where to File
• Update Your Information
• Get Your Tax Record
• Apply for an Employer ID Number (EIN)
• Check Your Amended Return Status
• Get an Identity Protection PIN (IP PIN)
• File Your Taxes for Free
• Bank Account (Direct Pay)
• Payment Plan (Installment Agreement)
• Electronic Federal Tax Payment System (EFTPS)
• Your Online Account
• Tax Withholding Estimator
• Estimated Taxes
• Where's My Refund
• What to Expect
• Direct Deposit
• Reduced Refunds
• Amend Return

Credits & Deductions

• INFORMATION FOR...
• Businesses & Self-Employed
• Earned Income Credit (EITC)
• Child Tax Credit
• Clean Energy and Vehicle Credits
• Standard Deduction
• Retirement Plans

Forms & Instructions

• POPULAR FORMS & INSTRUCTIONS
• Form 1040 Instructions
• Form 4506-T
• POPULAR FOR TAX PROS
• Form 1040-X
• Circular 230

Here’s what taxpayers need to know about business related travel deductions

More in news.

• Topics in the News
• News Releases
• Multimedia Center
• Tax Relief in Disaster Situations
• Inflation Reduction Act
• Taxpayer First Act
• Tax Scams/Consumer Alerts
• The Tax Gap
• Fact Sheets
• IRS Tax Tips
• e-News Subscriptions
• IRS Guidance
• Media Contacts
• IRS Statements and Announcements

IRS Tax Tip 2022-104, July 11, 2022

Business travel can be costly. Hotel bills, airfare or train tickets, cab fare, public transportation – it can all add up fast. The good news is business travelers may be able to off-set some of those costs by claiming business travel deductions when they file their taxes.

Here are some details about these valuable deductions that all business travelers should know.

Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. The travel period must be substantially longer than an ordinary day's work and a need for sleep or rest to meet the demands the work while away.

Travel expenses must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes.

Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year.

Travel expenses for conventions are deductible if attendance benefits the business and there are special rules for conventions held outside North America .

Deductible travel expenses while away from home include the costs of:

• Travel by airplane, train, bus or car between your home and your business destination.
• Fares for taxis or other types of transportation between an airport or train station to a hotel, from a hotel to a work location.
• Shipping of baggage and sample or display material between regular and temporary work locations.
• Using a personally owned car for business which can include an increase in mileage rates .
• Lodging and non-entertainment-related meals .
• Dry cleaning and laundry.
• Business calls and communication.
• Tips paid for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to the business travel.

Self-employed or farmers with travel deductions

• Those who are self-employed can deduct travel expenses on  Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) .
• Farmers can use  Schedule F (Form 1040), Profit or Loss From Farming .

Travel deductions for the National Guard or military reserves

National Guard or military reserve servicemembers can claim a deduction for unreimbursed travel expenses paid during the performance of their duty .

Recordkeeping

Well-organized records make it easier to prepare a tax return. Keep records, such as receipts, canceled checks, and other documents that support a deduction.

More information:

• Publication 463, Travel, Gift, and Car Expenses
• IRS updates per diem guidance for business travelers and their employers

Subscribe to IRS Tax Tips

•  Facebook
•  Twitter
•  Linkedin

Cookies on GOV.UK

We use some essential cookies to make this website work.

We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services.

We also use cookies set by other sites to help us deliver content from their services.

You have accepted additional cookies. You can change your cookie settings at any time.

You have rejected additional cookies. You can change your cookie settings at any time.

Register to vote Register by 18 June to vote in the General Election on 4 July.

• Expenses and employee benefits

Expenses and benefits: travel and subsistence

As an employer paying your employees’ travel costs, you have certain tax, National Insurance and reporting obligations.

This includes costs for:

• providing travel
• reimbursing travel
• accommodation (if your employee needs to stay away overnight)
• meals and other ‘subsistence’ while travelling

Subsistence includes meals and any other necessary costs of travelling, for example parking charges, tolls, congestion charges or business phone calls.

There are different rules for reporting expenses relating to public transport .

Related content

Is this page useful.

• Yes this page is useful
• No this page is not useful

Help us improve GOV.UK

Don’t include personal or financial information like your National Insurance number or credit card details.

To help us improve GOV.UK, we’d like to know more about your visit today. Please fill in this survey (opens in a new tab) .

• Travel Insurance
• Best Medical Insurance For Visitors To The USA

Best Travel Medical Insurance For Visitors To The USA Of 2024

Fact Checked

Updated: Mar 19, 2024, 6:22am

Visitors insurance—also called travel medical insurance—can reimburse a person’s medical expenses if they get sick or injured during a trip to the United States. That’s important because health insurance from other countries generally isn’t accepted in the U.S. and the cost for medical care in the states can be significant.

The best travel medical insurance policies package together valuable benefits that can help pay for routine, urgent and emergency medical care. To identify the best medical insurance for visitors to the USA , we scored policies on cost, medical coverage amounts, out-of-network reimbursement, emergency dental benefits and trip interruption benefits.

Why you can trust Forbes Advisor

Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate insurance companies, so all companies are measured equally. You can read more about our editorial guidelines and the methodology for the ratings below.

• 9 comprehensive travel medical insurance plans analyzed
• 126 data points crunched
• 96 years of insurance experience on the editorial team
• Best Travel Insurance Companies
• Cheapest Travel Insurance Plans
• Best Senior Travel Insurance
• Best Covid-19 Travel Insurance Plans
• Best Annual Travel Insurance
• Best Travel Medical Insurance

The Best Travel Medical Insurance for Visitors to the USA

Summary: best travel medical insurance for visitors coming to the u.s., what is travel medical insurance, types of travel medical insurance for visitors to the usa, what does travel medical insurance cover in the usa, do i need travel medical insurance as a visitor to the usa, where to purchase visitors insurance, methodology.

• Atlas America – Best Overall
• Patriot America Lite – Best for Cost
• Patriot America Plus – Great for Trip Interruption Insurance
• Safe Travels USA Comprehensive – Best for Deductible Choices
• Seven Corners Travel Medical Basic – Best for Urgent/Emergency Care Reimbursement

Best Overall

Atlas america.

Eligible ages

14 days to 99 years

Coverage length

5 days to 364 days

Extendable?

Yes, up to 364 days

High coverage limits, a generous selection of deductible amounts and great trip interruption coverage earned Atlas America’s comprehensive policy high marks for benefits across the board.

• Competitive costs.
• Excellent trip interruption benefits of $10,000.
• High coverage limit of $2 million available.
• Out-of-network services covered at 100%.
• Wide range of choices for deductible amounts.
• Pre-existing medical conditions not covered (though acute onset of pre-existing medical conditions is covered).
• $200 copay for emergency room care
• Choices of coverage maximums: $10,000, $50,000, $100,000, $250,000, $500,000, $1 million, $2 million.
• Choice of deductibles: $0, $100, $250, $500, $1,000, $2,500, $5,000.
• Network used: United Healthcare PPO.
• Coverage for in-network urgent care: $15 copay, 100% thereafter up to policy maximum.
• Coverage for out-of-network urgent care: $15 copay, 100% thereafter up to policy maximum.

Best for Cost

Patriot america lite.

Coverage amounts

5 days to 365 days

Yes, up to 365 days

The America Lite policy from Patriot is worth checking out if low cost and robust trip interruption benefits are important to you. The cost of the America Lite plan is significantly lower than the competitors we assessed, which can make up for the lack of coverage for acute onset of pre-existing medical conditions.

• Decent choice of deductibles and coverage limits.
• Generous trip interruption benefits of $10,000.
• Lowest cost among the policies we evaluated.
• The only plan among those we evaluated that does not cover acute onset of pre-existing medical conditions.
• Standard care, urgent care and emergency care out-of-network are only covered at 80% for the first $5,000 in services.
• Choices of coverage maximums: $10,000, $50,000, $100,000, $500,000, $1 million.
• Choice of deductibles: $0, $100, $250, $500, $1,000, $2,500.
• Coverage for in-network urgent care: $25 copay, 100% thereafter up to policy maximum.
• Coverage for out-of-network urgent care: $25 copay, 80% of the first $5,000, 100% thereafter.

Great for Trip Interruption Insurance

Patriot america plus.

The America Plus plan by Patriot provides decent coverage at a good price and includes generous trip interruption benefits. The low price may make up for out-of-network care being covered at only 80% for the first $5,000 in services. Unlike the Patriot Lite plan, America Plus covers the acute onset of pre-existing medical conditions.

• Ample trip interruption benefits of up to $10,000.
• Low cost compared to other top-rated companies.
• Does not cover pre-existing medical conditions (but does cover acute onset of pre-existing medical conditions).
• Coverage for out-of-network urgent care: $25 copay, 80% of the first $5,000,100% thereafter.

Best for Deductible Choices

Safe travels usa comprehensive.

1 year to 89 years

Great benefits at a decent price make Safe Travel USA’s comprehensive plan worth a look. The policy provides 100% coverage for out-of-network care and 100% coverage for emergency and urgent care. It also has the most choices for a deductible amount among the medical insurance plans we reviewed.

• Competitive cost.
• Most choices for deductibles among plans evaluated.
• Urgent care and emergency room care out-of-network covered at 100% after copay.
• Acute onset pre-existing medical conditions covered, but not pre-existing conditions.
• Dental benefits of $250 are lower than some competitors.
• Trip interruption coverage of $5,000 is low compared to some competitors we evaluated.
• Choices of coverage maximums: $50,000, $100,000, $250,000, $500,000, $1 million.
• Choice of deductibles: $0, $50, $100, $250, $500, $1,000, $2,500, $5,000.
• Network used: First Health PPO.
• Coverage for in-network urgent care: $30 copay, 100% thereafter up to policy maximum.
• Coverage for out-of-network urgent care: $30 copay, 100% thereafter up to policy maximum.

Best for Urgent/Emergency Care Reimbursement

Seven corners travel medical basic usa.

Consider the Travel Medical Basic USA plan by Seven Corners if you value having urgent care and emergency room care covered at 100% over coverage for Covid.

Related: Seven Corners Travel Insurance Review

• Coverage amounts up to $1 million and a competitive price
• Emergency room care (in-network and out-of-network) covered at 100% after copay
• Urgent care (in-network and out-of-network) covered at 100% after copay
• Does not cover Covid-related medical expenses or pre-existing medical conditions (but covers acute onset)
• Out-of-network standard care only covered at 80% for first $10,000 of care, compared to others at 100% or 80% for first $5,000
• Trip interruption benefits are low at $2,500
• Choices of coverage maximums: $10,000, $50,000, $100,000, $1 million
• Choice of deductibles: $0, $100, $250, $500, $1,000, $5,000
• Network used: United Healthcare PPO
• Coverage for in-network urgent care: $30 copay, 100% thereafter up to policy maximum
• Coverage for out-of-network urgent care: $30 copay, 100% thereafter up to policy maximum

Medical insurance for visitors to the USA provides short-term medical coverage. If you get sick or injured during your trip, the best travel medical insurance policies provide high levels of compensation for medical bills.

These policies—also called visitors insurance— are designed for non-U.S. citizens traveling to the U.S., typically for trips up to 364 days.

If you’re an American traveling internationally, you can also buy travel medical insurance, often as part of comprehensive travel insurance policies that cover trip cancellation , trip interruption , travel delays, medical costs and much more.

There are two main types of  travel medical insurance for visitors to the USA: fixed and comprehensive.

Fixed Medical Insurance

Fixed travel medical insurance is also called a fixed benefits policy or a limited policy. Fixed benefit plans are more affordable but have limited coverage.

These plans have a maximum fixed coverage amount for each medical service or condition. Deductibles apply for each event. For each injury or illness, you pay an initial deductible and the limited medical plan pays for the rest of the expenses covered by the policy.

Fixed medical insurance usually doesn’t include trip interruption coverage .

Comprehensive Medical Insurance

Comprehensive medical insurance policies are more expensive but provide more generous coverage than limited plans—for example, maximum coverage limits can be millions of dollars.

There are no sub-limits for coverage with comprehensive visitors insurance policies. You’re covered for medical costs up to the policy maximum, minus your deductible and coinsurance .

Trip interruption, trip cancellation and travel delay benefits can be found in some comprehensive visitors insurance plans.

Comprehensive travel medical insurance for visitors to the USA generally covers inpatient and outpatient services, urgent care and emergency medical services, emergency dental care and other healthcare, such as:

• Emergency medical evacuation
• Emergency medical treatment for pregnancy complications
• Mental disorders
• Prescriptions/medication

Visitors to the USA need travel medical insurance if they want to recoup money they pay for medical costs if they get ill or injured in the United States. Health plans from other countries aren’t usually accepted in the U.S. For example, travel medical insurance is a common type of travel insurance for parents visiting the U.S . whose adult children live here.

You also need travel medical insurance if you are a U.S. citizen traveling internationally. It’s important to consider medical insurance for trips abroad because U.S.-based health insurance plans may have limited or no coverage in other countries.

You can buy visitors insurance online from a visitors insurance comparison provider such as VisitorsCoverage, and many travel insurance companies also sell visitors insurance online at their websites.

You can generally choose from several policies that have a range of coverage and costs, from budget plans with low benefit limits to more expensive policies with  more generous coverage.

To identify the best medical insurance for visitors coming to the USA, we scored only comprehensive travel medical plans on the following criteria:

Cost (50% of score): Plans with lower costs were awarded the most points. We analyzed average rates for:

• A 70-year-old traveler from India coming to the U.S. for 90 days, with coverage of $100,000 with a $250 deductible (or closest deductible).
• Two travelers ages 60 and 65 coming from India to the U.S. for 30 days, with coverage of $50,000 with a $100 deductible (or closest deductible).

Trip interruption benefits (10% of score): Points were awarded if policies included $10,000 or more in trip interruption benefits. If a visitor has to cut their trip to the U.S. short and return home, this coverage can pay the costs. To make a claim for trip interruption, the reason must be listed in the policy.

Choices of policy maximum coverage amounts (10% of score): Points were awarded if the policy had maximum medical coverage amounts of $500,000 and up.

Urgent care out-of-network reimbursement (10% of score): Policies that cover out-of-network urgent care at 100% (after copay) earned points.

Emergency room out-of-network reimbursement (10% of score):  Policies that cover out-of-network emergency room care at 100% (after copay) earned points.

Emergency dental care (10% of score): Points were awarded if emergency dental care coverage was $300 or more.

Next Up In Travel Insurance

• Best “Cancel For Any Reason” Travel Insurance
• Best Senior Travel Insurance Plans Of August 2024
• Average Cost Of Travel Insurance
• How To Get Cheap Travel Insurance

Michelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine editor covering consumer technology, a foreign correspondent for Time and various newswires and local newspaper reporter.

Some DART board members may have taken personal trips at taxpayer expense

One Dallas Area Rapid Transit board member spent more than $50,000 of agency funds for trips — including flights to Spain and Canada. She allegedly approved some of those trips herself.

Another used DART funds to travel from a second home in Denver to attend board meetings in Dallas.

Those are among the details that emerged when KERA News examined DART documents obtained through an open records request. KERA found evidence that some DART board members approved their own travel — and may have taken personal trips — at taxpayer expense.

KERA first requested travel records from the agency in September 2023. Redacted copies of records from 2019 to September 2023 were released in February after DART sought a ruling from the Texas Attorney General on what could be made public.

DART revised its travel policy for board members in March.

"The policy was being abused," said Paul Wageman, who represents Plano on the board and chairs its finance committee.

What the records show

The board’s current policy says directors’ travel must be related to transit. The board allocates $6,000 a year for travel.

The board member who traveled the most was former chair Michele Wong Krause, who is one of several Dallas representatives on the board. Krause traveled at least 18 times between 2019 and 2023.

She told KERA in an email that trips to Denver and Washington, D.C. included meetings with federal officials and training opportunities. She also attended transit conferences in Spain and Canada.

"Obtaining training and education is critical to help me have a deeper knowledge of the complex nature of the procurement process and issues at DART," Krause said in an email.

Krause was reimbursed more than $50,000 over the course of five years.

Wageman said Krause's trips weren't against the former policy, which allowed the board chair to approve travel expenses for transit-related trips, but that the cost was questionable.

"I think no one should be able to prove their own expenses...in any setting," Wageman said.

KERA found that board member Flora Hernandez traveled from Denver in July and August 2023 to attend DART board meetings in Dallas. She reportedly has a second home in Colorado. Hernandez, who represents the city of Dallas on the board, was reimbursed more than $2,000 for her trips.

Hernandez did not respond to requests for comment.

Wageman traveled to Austin in April 2023 to testify in front of the House Transportation Committee on House Bill 3146, which proposed greater financial transparency between DART and its member cities.

A video of the hearing shows Wageman testified in front of the committee to represent himself and the city of Plano instead of DART.

While the hearing was related to agency matters, Wageman confirmed he was in Austin to represent himself and was reimbursed by DART for the travel.

He said that trip occurred at a time when DART's travel policy for board members was "porous" and "poorly drafted."

Wageman had previously served as chair of the DART board before Krause during the pandemic when board travel was largely prohibited.

"We never anticipated someone who would take that many trips travel abroad and do other things," Wageman said. "So, shame on us, right?"

DART’s board underwent the audit following a meeting in September, when director Doug Hrbacek said the board’s attorney, Gene Gamez, was responding to a complaint about travel expenses. At the time, Hrbacek said some directors were “traveling around the world” and “approving their own travel."

After that meeting, KERA requested documents related to travel by DART board members since 2019.

Results of the audit

Following several closed door meetings last year, the audit on board expenses was completed in December. The audit found that board members in general adhered to DART's travel policy, but that "internal controls in place for managing Board expenditures can be strengthened." It flagged inconsistencies in travel receipts and record-keeping, and overpayments to travelers for "expenses that were previously paid by DART."

KERA made an open records request for the audit in April and received it in late May.

Auditors found that there were duplicate payments for expenses covered by DART and a lack of detailed receipts. They also found that DART didn’t consistently maintain documentation of board members’ travel, airline upgrades and canceled trips.

As a result, auditors say it was difficult to determine if some trips were approved by the board. There were also significant increases in spending on meals, workshops and supplies.

“Some of the increases can be attributed to inflation over the last five years however, some of the increase can be attributed to a shift in the type of vendors used,” the audit said.

Auditors recommended improved training for staff handling travel expenses, better documentation for trips and cancellations and changes to Rule 7 of the board’s rules of procedure, which sets the policy for directors’ travel.

Jeamy Molina, a spokeswoman for DART, confirmed that the board amended its travel policy in March, and that board members won't be reimbursed for trips that aren't permitted. Molina did not say whether there would be repercussions for board members who allegedly took personal trips using agency funds or approved their own travel.

"Some people didn't think there was any issue here," Wageman said. "But thanks to Doug [Hrbacek] and working with our auditor and our general counsel, we came up with a revised policy that I think provides guardrails so that that kind of thing doesn't happen again."

The findings come during a contentious time for DART as the agency grapples with the possibility of reduced funding from member cities and potentially one less representative for the city of Dallas, according to The Dallas Morning News .

The agency has also been in tense discussions with the union representing its employees, ATU 1338, over safety concerns, pay raises and benefits.

Reporter Juan Salinas II contributed to this investigation.

Pablo Arauz Peña is KERA’s growth and infrastructure reporter. Got a tip? Email Pablo at [email protected] . You can follow him on X @pabloaarauz .

KERA News is made possible through the generosity of our members. If you find this reporting valuable, consider making a tax-deductible gift today . Thank you.

Lawmakers expensed millions in 2023 under new program that doesn’t require receipts

Critics say the program’s lack of transparency and record-keeping opens it up to abuse.

A previous version of this article said that Rep. Matt Gaetz (R-Fla.) was the reimbursement program's top spender for 2023. That analysis was based on data released by the House as of last week. But additional data The Post reviewed Tuesday showed that Rep. Jack Bergman (R-Mich.) was reimbursed for more than Gaetz was. The article has been corrected.

More than 300 House lawmakers were reimbursed at least $5.8 million for food and lodging while on official business in Washington last year under a new taxpayer-funded program that does not require them to provide receipts.

The program, which kicked off last year after a House panel passed it with bipartisan support, was intended to make it easier for lawmakers to cover the cost of maintaining separate homes in D.C. and their home districts. But critics argue that its reliance on the honor system and lack of transparent record-keeping makes it ripe for abuse.

The reimbursement scheme’s lack of receipt requirements is a “ridiculous loophole,” said Craig Holman, a lobbyist for the good-government group Public Citizen. “Clearly it becomes very difficult to tell whether or not it’s a legitimate payment and whether it’s proper,” Holman added.

The program has only a few strict rules: Lawmakers cannot be repaid for principal or interest on their mortgages, they can only get reimbursement for days they’re actually working or flying to D.C., and they can’t ask for more back than their actual expenses. They’re also subject to daily spending caps determined by the General Services Administration. Members are “strongly encouraged,” but not required, to keep records of their expenses, according to guidance issued by the House Committee on Administration.

The same rules apply to every member. But lawmakers’ reimbursements requests have varied widely, and because the program doesn’t require receipts or detailed public disclosure of what members are expensing, taxpayers have to take lawmakers’ word that they’re playing by the rules.

The office of the House’s chief administrative officer continuously gathers expense reports from members of Congress and periodically updates the House’s website to reflect the latest filings.

As of Tuesday, that data showed that 154 House Democrats, 171 House Republicans and three nonvoting delegates participated in the reimbursement program last year.

Rep. Jack Bergman (R-Mich.) was the program’s top spender last year. He was reimbursed more than $32,000 for lodging and nearly $12,000 for meals in 2023, according to data released by the House as of Tuesday.

Bergman’s office did not respond to a request for comment.

Rep. Matt Gaetz (R-Fla.) was the program’s second-highest overall spender, according to filings released as of Tuesday, with over $30,000 in lodging expenses and more than $11,000 for meals in 2023. A spokesperson for Gaetz said he was reimbursed for lodging expenses on days when the House was out of session but Gaetz remained in Washington on official business for depositions related to his post on the select subcommittee on weaponization of the federal government.

“Rep. Gaetz has always complied with House rules regarding congressional reimbursements,” a spokesperson for Gaetz said in an emailed statement. “In 2023, Rep. Gaetz dedicated significant time to his work on the Weaponization Subcommittee, requiring his presence to be in Washington, D.C., on days often when there were no votes, which incurred additional reimbursement expenses to conduct depositions.”

Other members of the weaponization committee expensed significantly less than Gaetz.

Some members of Congress who own homes in the Washington area, including Reps. Patrick T. McHenry (R-N.C.), Ro Khanna (D-Calif.) and Michael McCaul (R-Tex.), have chosen not to participate in the program at all. Rep. Jim Banks (R-Ind.), who owns a $1 million home in Virginia, was reimbursed less than $1,500 each month.

But other D.C.-area homeowners, including Reps. Nancy Mace (R-S.C.) and Eric Swalwell (D-Calif.), requested significantly higher reimbursements than Banks did for some months in 2023.

Mace, who co-owns a $1,649,000 Capitol Hill townhouse she purchased in 2021 with her then-fiancé, Patrick Bryant, expensed a total of $27,817 in 2023, an average of more than $2,300 a month, according to the data released as of Tuesday. She expensed over $3,000 for lodging in January, March and May , and over $4,000 for lodging in October.

Swalwell, who purchased a $1,215,000 home in the Eckington neighborhood of Washington, was reimbursed more than $20,000 for lodging expenses in 2023, according to the data released as of Tuesday. In May 2023, he received $2,838 in lodging reimbursement.

As homeowners, Mace and Swalwell aren’t allowed to ask taxpayers to cover their mortgage payments and can only expense taxes, insurance, maintenance, utilities and other ancillary costs.

“There’s nothing ‘average’ about having three children and a wife who are trying to live between two expensive areas,” Swalwell spokeswoman Cassie Baloue said in a statement. “The Congressman’s expenses reflect the actual cost of working in D.C. and are signed off by House Administration.”

Swalwell owed about $1,144 per month in taxes and insurance alone, according to figures provided by his spokeswoman, and incurred other home maintenance costs she declined to specify.

“Every month is different as to what maintenance costs Rep. Swalwell is reimbursed for,” she added. “Everything he does is allowable.”

Mace was told by people involved with her office finances that she could not justify claiming more than about $1,800 a month for expenses on the townhouse, according to two people familiar with the discussions, who, like others interviewed for this report, spoke on the condition of anonymity to disclose private conversations. One source showed The Post a document laying out Mace’s monthly expenses for the townhouse and calculating them as $1,726.

Mace instructed her staff to seek the maximum reimbursement each day the House was in session, regardless of her actual expenses, two former members of her staff and one other person familiar with the matter alleged to The Post. Mace denies that allegation.

Mace denied wrongdoing and declined to explain her expenses in detail. Her office did not answer questions about maintenance and other costs related to the house she co-owns with her ex-fiancé. Mace owns 28 percent of the home, according to the deed, but did not answer questions about what percentage of the bills she paid.

“We follow all the rules for reimbursements,” said Gabrielle Lipsky, a spokeswoman for Mace, who said the office found $300,000 in other savings last year unrelated to the reimbursement program.

Mace has been at war with a group of her former staffers for months. Her former chief of staff, Daniel Hanlon, took steps this year to run against her in a primary. He later bowed out . Mace’s main opponent in a hotly contested June 11 primary is Catherine Templeton, a former South Carolina gubernatorial candidate who has accused Mace of flip-flopping “for fame.”

Misusing taxpayer funds under the members’ allowance could violate both House rules and federal law, said Kedric Payne, a former deputy chief counsel of the Office of Congressional Ethics who now serves as the vice president of the Campaign Legal Center, a nonpartisan government watchdog group. Payne said that anyone who misuses the program could face corruption charges similar to those brought against Aaron Schock, a former congressman from Illinois who used government and campaign funds to remodel his Capitol Hill office in the style of the TV show “Downton Abbey.”

“The new travel reimbursement rules cover very specific expenses and have strict dollar limits,” said Payne. “Any member who violates these rules and submits false reimbursement claims can face civil and criminal penalties. The Office of Congressional Ethics frequently investigates members’ blatant misuse of taxpayer dollars. Voters have a right to know that their elected officials aren’t using public funds for personal expenses.”

The member reimbursement program has been popular, but any perception of unfair enrichment could endanger it. Congress is already one of the least trusted government institutions, and 81 percent of American adults believe that members of Congress do a somewhat or very bad job at keeping their personal financial interests separate from their work in Congress, according to a Pew Research poll released in September.

The bipartisan House Select Committee on the Modernization of Congress suggested the member reimbursement account program in 2022 as an alternative to raising members’ salaries. Defenders of the program have argued that it matches benefits offered to lawmakers’ counterparts in the private sector and the executive branch and encourages diversity of representation.

Members of Congress make $174,000 per year, which is about twice the median U.S. household income, but they must usually maintain two households: one in Washington, an expensive metro area, and another in their home districts. Many commute long distances at great expense .

Some good-government and anti-corruption groups argue that higher lawmaker salaries would make public service more attractive to a wider array of Americans and discourage corruption. But members of Congress have not given themselves a raise since 2009, as voting to do so is considered politically unpalatable. Some lawmakers have turned to living in their own offices to defray the costs.

“I wish members would give themselves a raise that they probably deserve and then we’d all move on,” said a staffer involved with congressional accounting, who spoke on the condition of anonymity because they were not authorized to discuss the program publicly. “But they don’t have the backbone to do that, so [they gave] members a raise through this backdoor way that allows for abuse because there is no record-keeping and there’s no receipts.”

Leigh Ann Caldwell and Alice Crites contributed to this report.