The Sneaky Tax Deductions You Might Be Eligible For If You Took A Vacation

According to 2025 data from Credit Karma, 37% of surveyed American tax payers reported relying on their tax refunds to survive. These numbers get even worse young younger generations, many of whom rely on side hustles and self employed income. For instance, a whopping 50% of Millennials reported relying on their return to survive while 46% of self-employed tax payers found that tax time caused them anxiety. In fact, 44% of those surveyed reporting putting off filing their taxes because of the stress they cause. Not only is this an unnecessary way to find out what happens to your tax refund when you file late, but it's also a key reason why it's so important to know about tax deductions that can help.

With all of that said, younger generations — and self-employed workers in particular — are more likely to be looking for extra under-the-radar ways to help reduce their tax burden this tax season. While it may seem like something outside the scope of a tax return, you might be surprised to learn that any work trips you might have taken last year could make a huge difference to your taxes. Similarly, it could be time to plan more work vacation combinations in the future.

Aside from learning how not to overspend on a vacation, work travelers should also learn the legal ways to turn their downtime into a tax return upgrade. For instance, according to the IRS, workers can claim deductions for their commutes while on work-related travel. This can be via a rented vehicle, train tickets, airplane flights, or even public transportation. If you take a taxi or rideshare from the airport to your hotel, or from your hotel to a remote work location, business meeting, or workplace belonging to clients, that can also be claimed. If you take a road trip with your own vehicle, you can deduct tools, parking related expenses, or standard mileage rates — that's 70 cents per mile in 2025 — while on your trip. Hang onto your receipts to help you avoid math mistakes likely to get you audited. Fill out a Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) when you're doing your taxes.

One caveat is that the expense must be considered an ordinary or necessary expenses, with ordinary meaning the expense is typically incurred by someone in your industry, and necessary meaning something that helps you succeed in your industry and/or is a necessity for your business. It's also important to realize that you can't claim travel deductions in the city where your work or where your business is located, and you can't claim travel deductions for any location you'll be operating out of for longer than a year.

The place you stay while on your trip might also be tax deductible as long as you can prove you're doing business while on vacation. You can write-off the cost of your hotel room, as well as any extras like tips for your valet, doorman, or porter so long as the expenses are considered reasonable. Claiming your hotel as a deduction is also one way for a budget-conscious travelers to work around some of the sneaky ways that hotels trick you into spending money.

While the jury might still be out regarding whether an Airbnb is a better deal than a hotel, it might not matter since you can also deduct your Airbnb expenses from your taxes while on work-related travel. All the same rules of business travel apply. Airbnb will send you a Form 1099-K by January 31st, along with a form showing your applied withheld state occupancy taxes.