How to write off your travel expenses in 2025
To ensure travel expenses are tax-deductible for a construction company (or any business), the IRS requires that the expenses be ordinary and necessary for your business and properly documented. Below is a concise guide to maximize the deductibility of travel expenses. Always consult a tax professional to ensure compliance with current tax laws, especially with potential 2025 tax reforms.
Establish a Business Purpose
The travel must be directly related to your business, such as visiting job sites, meeting clients, attending trade shows, or sourcing materials.
Examples: Traveling to a work site, attending a trade show for new equipment, or meeting with subcontractors/vendors.
Tip: Personal travel (e.g., vacations) combined with business must be clearly separated; only the business portion is deductible.
Deductible Travel Expenses
Transportation: Airfare, train, bus, or car expenses (e.g., mileage at the 2024 IRS rate of 67 cents per mile or actual costs like gas, repairs).
Lodging: Hotel or rental costs for overnight business trips.
Meals: 50% of meal costs during business travel (100% for restaurant-provided meals through 2022; confirm 2025 rules).
Other: Parking fees, tolls, taxis, ride-sharing, and tips related to business travel.
Non-Deductible: Personal expenses (e.g., sightseeing, personal entertainment) or lavish/extravagant expenses.
Keep Detailed Records
Required Documentation:
Receipts for expenses $75 or more (e.g., hotel bills, airfare).
Records of the business purpose, including date, location, and reason for travel.
Names of clients or business associates met (e.g., for meals or meetings).
For meals, note the business discussion and attendees.
Mileage Log: Track business miles driven, including date, destination, and purpose. Use apps like MileIQ or a manual logbook.
Tip: Use a dedicated business credit card to simplify tracking and separate personal expenses.
Separate Business and Personal Expenses
If combining business and personal travel, only deduct the business-related portion (e.g., extra hotel nights for personal use are non-deductible).
Example: If you travel to a job site for three days and stay an extra two days for vacation, only the first three days’ expenses (e.g., hotel, meals) are deductible.
Tip: Document the business itinerary to justify the trip’s primary purpose.
Understand IRS Rules for Travel
Away from Tax Home: Travel deductions typically apply when you’re away from your “tax home” (your primary place of business) overnight or long enough to require rest.
Temporary Work Locations: Job sites away from your tax home are deductible if the work is temporary (generally less than one year).
Conventions/Trade Shows: Deductible if relevant to your business (e.g., a construction expo). Foreign conventions have stricter rules.
Spouse/Family Travel: Generally non-deductible unless they’re employees with a business purpose.
Maximize Deductions with Strategic Planning
Combine Trips: Schedule multiple business activities (e.g., client meetings, site visits) during one trip to strengthen the business purpose.
Prepay Expenses: Pay for travel costs before year-end to claim deductions in the current tax year.
Use Section 179 or Depreciation: If purchasing a vehicle for business travel, consider Section 179 expensing (up to $1,160,000 in 2023) or depreciation for heavy vehicles like work trucks.
Stay Compliant with Tax Law Changes
The Tax Cuts and Jobs Act (2018) eliminated unreimbursed employee travel expense deductions, so deductions primarily apply to self-employed contractors or businesses filing Schedule C.
Check for updates in 2025 tax reforms (e.g., One Big Beautiful Bill Act), which may affect meal deductions or other rules.
Resources: IRS Publication 463 (Travel, Gift, and Car Expenses) or consult a tax professional familiar with construction.
Use Technology for Tracking
Apps like QuickBooks, Expensify, or Concur can streamline expense tracking and integrate with tax software.
Digital receipts and cloud storage ensure records are audit-ready.
Typical Savings
A company owner traveling for business (e.g., 5,000 miles driven, $2,000 in lodging, $1,000 in meals) could deduct approximately $4,350–$6,000 annually, depending on expenses and IRS rates.
