Travel is a normal part of business for many self-employed individuals. But determining whether those travel costs are deductible is far from simple. Over several decades, courts have developed detailed rules governing what it means to be “away from home,” when travel is considered business‑related, and when it is simply commuting.

Historically, these rules apply to both employees and self‑employed individuals. However, legislation has changed the landscape.

The Tax Cuts and Jobs Act (TCJA) eliminated the deduction for unreimbursed employee business expense for 2018–2025.

The One Big Beautiful Bill Act (OBBBA) made this elimination permanent beginning in 2025.

As a result:

• Employees can no longer deduct unreimbursed travel expenses. Though employees can be reimbursed by their employer under a qualified reimbursement plan.
• Only self‑employed individuals may deduct travel expenses under IRC §162.

This blog post explains how longstanding case law applies today — exclusively to self‑employed taxpayers — and outlines the rules you need to know.

Understanding the “Tax Home” Rule

The cornerstone of travel‑expense deductibility is the concept of the tax home. For tax purposes, a person’s tax home is generally their principal place of business, not necessarily their personal residence.

This distinction matters because:

• Travel between a taxpayer’s residence and their principal place of business is commuting, which is not deductible. There are circumstances in which your personal residence is also your tax home.
• Travel away from the principal place of business for business purposes, which can include overnight stays, may be deductible.

For self‑employed individuals, this means that choosing to live far from where the business operates does not create a deduction. The IRS will treat that travel as personal commuting, even if the distance is significant.

When Travel Is a Personal Choice — No Deduction Allowed

Some taxpayers assume that traveling long distances automatically qualifies as a business expense. However, the courts have consistently rejected this idea.

If a taxpayer chooses to live outside their business territory for personal reasons — such as family preferences or convenience — the resulting travel is not deductible. The business did not require travel; the taxpayer’s personal living choice did.

When Travel Is Required by the Business — Deduction Allowed

Travel expenses become deductible when the business itself requires the taxpayer to travel away from their tax home.

Examples include:

• A self‑employed salesperson who must visit customers across multiple states.
• A contractor who travels to temporary job sites outside their primary business area.
• A consultant whose engagements require overnight stays in different cities.

In these situations, the travel is driven by business necessity, not personal preference.

Temporary vs. Indefinite Assignments

The duration of an assignment plays a critical role in determining deductibility.

Temporary assignments

Travel expenses are deductible when the taxpayer is temporarily away from their tax home. Temporary generally means the assignment is expected to last for a short period and not become permanent.

Indefinite assignments

If an assignment becomes indefinite — meaning it is expected to last for a long or uncertain period — the work location becomes the taxpayer’s new tax home. Travel to that location is no longer deductible.

Self‑employed individuals should evaluate each project or engagement to determine whether it is temporary or indefinite. Generally (less than 1-year is temporary and longer than 1-year is indefinite.)

Practical Guidance for Self‑Employed Clients

Self‑employed individuals may deduct travel expenses when:

• Travel is required for business.
• The taxpayer is away from their tax home (principal place of business).
• The expenses are ordinary, necessary, and directly connected to business operations.
• Travel involves temporary assignments rather than indefinite ones.

They may not deduct travel expenses when:

• The travel is commuting between their personal residence and the principal place of business.
• The assignment is indefinite.

Key Takeaways

The deductibility of travel expenses under IRC §162 remains governed by longstanding principles developed through decades of case law.

For self‑employed individuals who travel regularly, understanding these distinctions is essential. Properly identifying the tax home, distinguishing business travel from commuting, and evaluating whether assignments are temporary or indefinite can make the difference between a valid deduction and a disallowed expense.

If you have additional questions or would like to know if your travel expenses qualify, we would be glad to help.