Page 5 of 59 of Publication 463 17:36 - 21-JAN-2010 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Table 1-1. Travel Expenses You Can Deduct travel or business entertainment. Chapter 2 dis- cusses the 50% Limit in more detail, and chapter This chart summarizes expenses you can deduct when you travel away from home 6 discusses accountable and nonaccountable for business purposes. plans. IF you have expenses for... THEN you can deduct the cost of... Actual Cost transportation travel by airplane, train, bus, or car between your home and your You can use the actual cost of your meals to business destination. If you were provided with a ticket or you are figure the amount of your expense before reim- riding free as a result of a frequent traveler or similar program, your bursement and application of the 50% deduction cost is zero. If you travel by ship, see Luxury Water Travel and Cruise limit. If you use this method, you must keep Ships (under Conventions) for additional rules and limits. records of your actual cost. taxi, commuter fares for these and other types of transportation that take you between: bus, and airport limousine • The hotel and the work location of your customers or clients, your Standard Meal AllowanceThe airport or station and your hotel, and• business meeting place, or your temporary work location. Generally, you can use the “standard meal al- baggage and sending baggage and sample or display material between your regular lowance” method as an alternative to the actual shipping and temporary work locations. cost method. It allows you to use a set amount for your daily meals and incidental expenses car operating and maintaining your car when traveling away from home on (M&IE), instead of keeping records of your ac- business. You can deduct actual expenses or the standard mileage tual costs. The set amount varies depending on rate, as well as business-related tolls and parking. If you rent a car where and when you travel. In this publication, while away from home on business, you can deduct only the “standard meal allowance” refers to the federal business-use portion of the expenses. rate for M&IE, discussed later under Amount of lodging and meals your lodging and meals if your business trip is overnight or long standard meal allowance. If you use the stan- enough that you need to stop for sleep or rest to properly perform your dard meal allowance, you still must keep rec- duties. Meals include amounts spent for food, beverages, taxes, and ords to prove the time, place, and business related tips. See Meals for additional rules and limits. purpose of your travel. See the recordkeeping rules for travel in chapter 5. cleaning dry cleaning and laundry. Incidental expenses. The term “incidental ex- telephone business calls while on your business trip. This includes business penses” means: communication by fax machine or other communication devices. • Fees and tips given to porters, baggage tips tips you pay for any expenses in this chart. carriers, bellhops, hotel maids, stewards other other similar ordinary and necessary expenses related to your or stewardesses and others on ships, and business travel. These expenses might include transportation to or hotel servants in foreign countries, from a business meal, public stenographer’s fees, computer rental • Transportation between places of lodging fees, and operating and maintaining a house trailer. or business and places where meals are taken, if suitable meals can be obtained at the temporary duty site, and Bona fide business purpose. A bona fide • The meal is business-related entertain- business purpose exists if you can prove a real ment. • Mailing costs associated with filing travel business purpose for the individual’s presence. vouchers and payment of em- Incidental services, such as typing notes or as- chapter 2. The following discussion deals only ployer-sponsored charge card billings.Business-related entertainment is discussed in sisting in entertaining customers, are not with meals that are not business-related enter- Incidental expenses do not include expenses for enough to make the expenses deductible. tainment. laundry, cleaning and pressing of clothing, lodg- ing taxes, or the costs of telegrams or telephone Example. Jerry drives to Chicago on busi- Lavish or extravagant. You cannot deduct calls. ness and takes his wife, Linda, with him. Linda is expenses for meals that are lavish or extrava- not Jerry’s employee. Linda occasionally types gant. An expense is not considered lavish or Incidental expenses only method. You can notes, performs similar services, and accompa- extravagant if it is reasonable based on the facts use an optional method (instead of actual cost) nies Jerry to luncheons and dinners. The per- and circumstances. Expenses will not be disal- for deducting incidental expenses only. The formance of these services does not establish lowed merely because they are more than a amount of the deduction is $3 a day for the that her presence on the trip is necessary to the fixed dollar amount or take place at deluxe res- period from January 1 through September 30, conduct of Jerry’s business. Her expenses are taurants, hotels, nightclubs, or resorts. through December 31, 2009. You can use this2009, and $5 a day for the period October 1, not deductible. 50% limit on meals. You can figure your method only if you did not pay or incur any meal Jerry pays $199 a day for a double room. A meals expense using either of the following expenses. You cannot use this method on any single room costs $149 a day. He can deduct the methods. day that you use the standard meal allowance. total cost of driving his car to and from Chicago, This method is subject to the proration rules for but only $149 a day for his hotel room. If he uses partial days. See Travel for days you depart andActual cost.• public transportation, he can deduct only his • The standard meal allowance. return, later in this chapter. fare. Both of these methods are explained below. But, Federal employees should refer to the regardless of the method you use, you generally ! Federal Travel Regulations at www. Meals can deduct only 50% of the unreimbursed cost CAUTION gsa.gov. Find the “Most Requested of your meals. Links” on the upper left and click on “Regula- You can deduct the cost of meals in either of the tions: FAR, FMR, FTR” for Federal Travel Regu- following situations. If you are reimbursed for the cost of your lation (FTR) for changes affecting claims for • It is necessary for you to stop for substan- whether your employer’s reimbursement plan reimbursement.meals, how you apply the 50% limit depends on tial sleep or rest to properly perform your was accountable or nonaccountable. If you are 50% limit may apply. If you use the standard duties while traveling away from home on not reimbursed, the 50% limit applies whether meal allowance method for meal expenses and business. the unreimbursed meal expense is for business you are not reimbursed or you are reimbursed Chapter 1 Travel Page 5
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