Publication 463: Travel Entertainment Gift And Car Expenses

Publication 463 is your guide to understanding which business-related travel, entertainment, gift, and car expenses you can deduct on your tax return. It covers what qualifies, record-keeping tips, and how to navigate the latest rules for maximizing your deductions.

Who Needs Publication 463?

A. Self-employed individuals: Sole proprietors and farmers reporting expenses on Schedule C or F.

B. Employees with unreimbursed expenses: If you paid out of pocket for business-related travel, meals, gifts, or car usage but weren't reimbursed by your employer, you might benefit from Publication 463.

Key Expenses Covered

  • Travel: Transportation, lodging, meals while away for business (ordinary and necessary, not lavish).
  • Entertainment: Expenses related to business meals, entertainment, or amusement, subject to stricter limitations and substantiation requirements.
  • Gifts: Business gifts costing less than $25 per recipient per year are generally deductible, with limitations for certain recipients.
  • Car: Standard mileage deduction or actual expense method for business use of your car.

Latest Updates (as of Feb 20, 2024)

  • TCJA changes: Reduced employee deductions for unreimbursed expenses, but increased standard deduction.
  • 2024 standard mileage rate: Increased to 65 cents per mile for business, 58.5 cents for medical/moving.