Business travel: getting reimbursed and keeping records

When you travel for work, you usually pay first and get paid back later. Whether that money shows up as tax-free reimbursement or as extra taxable wages depends on how your employer's plan works and on the records you keep. This guide covers the rules for employees and the basics for self-employed people, using IRS and GSA sources.

Accountable plans: why the paperwork matters

Most employer reimbursement programs are set up as accountable plans. IRS Publication 463, chapter 6, says an accountable plan must include all three of these rules:

1. Your expenses have a business connection, meaning you paid them while doing your job.
2. You adequately account to your employer for the expenses within a reasonable period of time.
3. You return any excess reimbursement or allowance within a reasonable period of time.

If you meet those rules, your employer shouldn't include the reimbursements in box 1 of your Form W-2. If an arrangement fails one of them, it's treated as a nonaccountable plan and the payments are reported as wages.

What counts as a "reasonable period" depends on the facts, but Publication 463 lists time frames that always qualify:

• You get an advance within 30 days of when you have the expense.
• You account for your expenses within 60 days after you paid or incurred them.
• You return any excess within 120 days after the expense.
• Or, if your employer sends a statement at least quarterly asking you to return or account for outstanding advances, you comply within 120 days of that statement.

Your employer can set a shorter deadline, and many do, so check your company's travel policy.

Publication 463 also explains that most employees can't deduct work travel their employer didn't reimburse, because miscellaneous itemized deductions subject to the 2% floor are suspended. Certain groups, such as Armed Forces reservists, qualified performing artists and fee-basis state or local government officials, are exceptions. If you're entitled to a reimbursement and don't claim it, you can't deduct that expense. In short, submit your report.

Per diem: a set daily amount instead of receipts

Some employers pay a per diem, a fixed daily allowance for lodging, meals and incidental expenses (often shortened to M&IE). Publication 463 says a per diem can count as proof of the amount of your expenses if the allowance isn't more than the federal rate and you still prove the time, place and business purpose of your travel to your employer.

The federal rates are set by the General Services Administration. You can look up the rate for any city or county with GSA's per diem rate lookup. Rates follow the federal fiscal year, which runs October to September.

For travel from October 1, 2026, through September 30, 2027 (fiscal year 2027), GSA raised the standard lodging rate by $3 to $113 and kept the standard M&IE rate at $68. GSA's FY 2027 highlights put the combined standard rate at $181 a day for most of the continental US. The standard lodging rate was $110 in fiscal 2026. GSA also lists 295 higher-cost areas with their own, higher rates for fiscal 2027. For travel before October 1, 2026, use the fiscal 2026 rates in the lookup tool.

Private employers don't have to use GSA rates, so your company's per diem may be different.

Mileage: the 2026 IRS rates

If you drive your own car for work, many employers reimburse a set amount per mile. Self-employed people can use the IRS standard mileage rate to figure a deduction instead of tracking actual car costs.

For 2026 there are two business rates:

• January 1 through June 30, 2026: 72.5 cents per mile.
• July 1, 2026 onward: 76 cents per mile, set by Announcement 2026-11, which applies to expenses paid or incurred on or after July 1, 2026.

For example, 100 business miles driven in March 2026 would come to $72.50 at the first rate, and 100 miles driven in August 2026 would come to $76.00 at the second rate. Your employer's reimbursement rate can differ from the IRS rate.

Keep a written mileage log as you go rather than rebuilding it later. Publication 463 includes a sample daily business mileage and expense log, with odometer readings and expenses, that you can use as a model.

Meals if you're self-employed

Publication 463 says you can generally deduct only 50% of the unreimbursed cost of business meals, whether you use actual costs or the standard meal allowance, and the 50% limit applies to self-employed people too. People subject to the Department of Transportation's "hours of service" limits, such as certain truck drivers and air transportation workers, can deduct 80% of meals during those periods. As a hypothetical example, a self-employed consultant who spends $80 on a qualifying business dinner could generally deduct $40.

Publication 463 is the 2025 edition, the latest available as of this writing. Check the 2026 edition when the IRS releases it, and talk to a tax professional about your own situation.

What to keep and what an expense report includes

Publication 463 says you can't deduct amounts you approximate or estimate. A record made on a computer counts as a written record. For each expense, your record should support:

• Amount of each separate expense
• Date of the expense
• Place, such as the city and the name of the hotel or restaurant
• Business purpose of the expense

On receipts, documentary evidence generally isn't needed if an expense other than lodging is under $75, if a receipt for a transportation expense isn't readily available, or if your employer reimburses meals or lodging through a per diem under an accountable plan. Otherwise, keep the lodging receipt whatever the amount. A good hotel receipt shows the hotel's name and location, your dates, and separate charges for lodging, meals and phone calls. A restaurant receipt should show the name and location, the number of people served, and the date and amount.

A typical expense report pulls this together: your name, the trip dates and destination, the business purpose, a line for each expense with category and amount, any advance you received, the total you are claiming, and the receipts attached. Before you submit, compare it with your card or bank transactions so nothing is missed or counted twice.

On how long to keep records, Publication 463 says employees who hand their records to the employer and are fully reimbursed generally don't need copies. For records that support a deduction, the general rule is 3 years from the date you file the return.

How SpendySaver helps

A Business workspace lets you flag work expenses, tag them by trip or client and attach receipt photos to each transaction. From Spending and reports, you can run the business report and export it to Excel, PDF or CSV by month, quarter or year to use for your expense report. SpendySaver doesn't log mileage, so keep a separate mileage record.