How to Deduct Travel Expenses on Your Taxes

By Erin Eberlin

As a landlord or property investor, you can deduct certain expenses related to the travel you must do for your business. You can deduct both local and long distance or overnight travel expenses.

You can deduct these travel expenses if the purpose of the travel was solely for business. The expenses you can deduct must also be considered “ordinary and necessary” in your course of business. For example, driving to the supermarket would most likely not be a necessary expense for a landlord, however it could be necessary for a baker who needs to buy flour.

You may also deduct certain expenses if the travel was a mix of business and pleasure. In this case, you must separate the trip into expenses incurred for business and expenses incurred for pleasure and must only deduct the expenses for business.

It is very important to keep adequate logs and documentation of all travel for business purposes.

What Are Business Tax Deductions?

You should log the purpose of the trip, miles driven (if you drove) and any expenses (gas, lodging, meals, etc.) incurred in case they come into question.

Local Travel Expenses

If you own an automobile that you use for business, you are able to deduct the cost of business related travel. This will include things such as traveling to a hardware store to pick up supplies for your property or traveling to a meeting with potential investors.

For the automobile deduction, you may use either the standard mileage rate or the actual expenses incurred. The standard mileage rate involves deducting miles driven for business use, while actual expenses involves deducting the business portion of expenses such as gasoline and repairs.

Long Distance or Overnight Travel Expenses

If you have to make long distance travel for business, you can deduct certain expenses. Be more careful when deducting these expenses, because the IRS looks more closely at deductions taken for long distance or overnight travel.

You must meet two conditions to be able to take the overnight travel expense:

1. 1.Your business must require you to be away from home for longer than a day’s work.
2. 2. Sleep is necessary for you to properly perform your work.

If you meet these conditions, you can deduct expenses including:

• Transportation Costs (Airfare, Train Fare, Bus Fare, Rental Car Cost, expenses related to using your own car).

• Hotel expenses.

• Meals (you can only deduct 50% of cost).

• Entertainment (if it is directly related to business, for example hosting clients at the theater or a social or athletic club).

• Dry cleaning.

• Phone calls or faxes

*You should always consult the IRS or a certified accountant to decide what deductions are applicable to your specific situation.