Key Takeaways
- "Away from home" requires overnight stay.
- Tax home = main place of business (not residence).
- Temporary (<1 year) vs. indefinite assignments.
- Domestic: primary purpose test (all-or-nothing transportation).
- Foreign: allocation required unless <7 days or <25% personal.
- Spouse travel only deductible if employee with business purpose.
Last updated: January 2026
Business Travel Expenses
Why This Matters for the Exam
Travel expense rules are heavily tested. Know the tax home definition, the overnight rule, and domestic vs. foreign travel allocation.
Expect at least 3-4 questions on travel.
"Away from Home" Requirements
| Requirement | Description |
|---|---|
| Overnight rule | Must require sleep or rest |
| Tax home | General area of main business |
| Temporary | <1 year assignment |
| Indefinite | New tax home (no deduction) |
Tax Home Definition
| Situation | Tax Home |
|---|---|
| One work location | That city/area |
| Multiple locations | Location with most time/income |
| No regular location (itinerant) | No tax home = no deduction |
Domestic vs. Foreign Travel
| Type | Transportation Rule | Meals/Lodging |
|---|---|---|
| Domestic | Primary purpose test | Business days only |
| Foreign | Allocation (unless exception) | Business days only |
Domestic Travel: Primary Purpose Test
| Primary Purpose | Transportation Deduction |
|---|---|
| Business (>50%) | 100% |
| Personal (>50%) | 0% |
Foreign Travel Exceptions (No Allocation)
| Exception | Rule |
|---|---|
| <7 days | 100% transportation |
| <25% personal | 100% transportation |
| No control over trip | 100% transportation |
Foreign Travel Allocation Example
| Item | Amount |
|---|---|
| Trip duration | 10 days |
| Business days | 6 |
| Personal days | 4 |
| Airfare | $2,000 |
| Business % | 60% |
| Deductible airfare | $1,200 |
Specific Travel Limitations
| Type | Limitation |
|---|---|
| Luxury water travel | 2× federal per diem |
| Cruise conventions | $2,000/person/year |
| Spouse travel | Only if employee with business purpose |
The Friday/Monday Rule
| Scenario | Treatment |
|---|---|
| Business Friday, business Monday | |
| Stay for weekend | |
| Saturday/Sunday | Count as business days |
Real-World Scenario
Scenario: Architect flies to Miami. 5-day trip: 3 days convention, 2 days beach. Airfare $500.
- Primary purpose: Business (3/5 = 60%).
- Domestic rule: 100% transportation deductible.
- Deductible airfare: $500.
On the Exam
Expect 3-4 questions on travel, typically:
- Itinerant Questions: "Can this worker deduct travel?"
- Allocation Questions: "How much airfare is deductible?"
- Cruise Questions: "What is the convention limit?"
The key is to remember: Overnight + tax home required. Domestic = primary purpose. Foreign = allocate unless <7 days or <25% personal. Itinerant = no deduction.
Test Your Knowledge
Architect: Miami 5 days, 3 convention, 2 beach. Airfare $500. Deductible?
A
B
C
D
Test Your Knowledge
What disqualifies a taxpayer from "away from home" deduction?
A
B
C
D
Test Your Knowledge
Maximum annual cruise convention deduction?
A
B
C
D