For business travel, incidental expenses are a narrow IRS category covering three things: tips and fees paid to porters, baggage carriers, bellhops, hotel housekeepers, and similar service workers; transportation between your lodging and places where you eat; and postage for mailing travel vouchers or paying employer charge card bills while on the road. That’s the whole list. The federal per diem sets the incidental portion at just $5 a day, which is a fair signal of how small these costs are meant to be.
Getting the definition right matters because it drives how per diem reimbursements work and what you do — or don’t — need receipts for during a trip.
The IRS Definition in Full
IRS Publication 463 limits incidental expenses to three buckets:
- Tips and fees given to porters, baggage carriers, bellhops, hotel housekeepers, stewards on ships, and hotel servants in foreign countries.
- Transportation between your hotel or work site and a restaurant, when suitable meals can be obtained at your temporary duty location.
- Mailing costs for filing travel vouchers and paying employer-sponsored charge card bills.
If a travel cost doesn’t fit one of those three, it isn’t an incidental expense for tax purposes, no matter how minor it feels.1Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
What Doesn’t Count, Even Though It Feels Like It Should
This is where most of the confusion lives. Several small trip costs are explicitly outside the incidental category.
Laundry, dry cleaning, and pressing of clothing are not incidentals. They’re deductible travel expenses, but the IRS treats them as a separate line item, not part of the incidental definition.1Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses Business telephone calls and other communication costs made during travel are deductible on their own, but they aren’t incidentals either.2Internal Revenue Service. Topic No. 511, Business Travel Expenses
Lodging taxes are excluded. So are the bigger-ticket travel costs — airfare, train tickets, rental cars, lodging, and meals themselves — each of which is its own deductible category with its own substantiation rules.
Parking fees, tolls, and baggage shipping are also deductible business travel expenses, but none of them are incidentals.2Internal Revenue Service. Topic No. 511, Business Travel Expenses They sit under the broader “ordinary and necessary” business expense rule of Internal Revenue Code Section 162.3Office of the Law Revision Counsel. 26 USC 162 – Trade or Business Expenses
The distinction has real money attached. If your employer pays a per diem, the $5 incidentals allowance only covers the items in the IRS definition. A $3 tip to a bellhop is covered by that allowance; $12 in airport parking is not, and needs its own reimbursement or receipt. Treating every small charge as “incidental” can leave you under-reimbursed or short on documentation.
How Incidentals Fit Into the Per Diem System
The incidental definition mainly exists to support per diem reimbursement. Instead of collecting receipts for every meal and small charge, employers can pay a flat daily allowance covering meals and incidentals together — the Meals and Incidental Expenses, or M&IE, rate.
The General Services Administration publishes M&IE rates annually for the continental United States; the Department of Defense sets rates for Alaska, Hawaii, and U.S. territories.4U.S. General Services Administration. Frequently Asked Questions, Per Diem Rates vary by city and county, running from $68 to $92 per day for domestic travel. Within every tier, the incidental portion is fixed at $5. The rest of the daily figure covers meals.5General Services Administration. M&IE Breakdowns
When your employer uses the M&IE per diem, you don’t need to track or substantiate individual meal or incidental costs. The daily allowance covers tips, the $5 in incidentals, and meal charges. You still need to document the time, place, and business purpose of the trip itself.
The Incidentals-Only Rate When Meals Are Provided
Some days your meals are covered — a conference with catered lunches, a client who picks up dinner. You can’t claim the full M&IE allowance on those days, but the incidental portion still applies. The IRS sets an incidentals-only rate of $5 per day for both domestic and international travel, so you can cover your tips and other qualifying incidentals without individual receipts.6Internal Revenue Service. 2025-2026 Special Per Diem Rates – Notice 2025-54
Recordkeeping If You Track Actual Costs
If you skip per diem and track actual expenses, the IRS requires a receipt or other documentary evidence for any lodging charge and any other individual expense of $75 or more.7eCFR. 26 CFR 1.274-5 – Substantiation Requirements Most incidentals sit well under $75 — a $5 tip to a bellhop, a $3 shuttle tip — so a physical receipt usually isn’t required.
You do need a written record created at or near the time you spent the money. That record should show the date, amount, location, and business purpose. A line in a travel log or a note in your phone works. The IRS accepts electronically stored records — photos of receipts, scanned documents, digital logs — provided the images are legible and the system maintains an audit trail linking records to your general ledger.8Internal Revenue Service. Revenue Procedure 97-22
If a receipt for a larger expense goes missing, bank and credit card statements can serve as backup, but an auditor has discretion to disallow the deduction if the documentation can’t be reconstructed. Vague or personal-looking charges draw more scrutiny than clearly identifiable business costs.
Who Can Actually Deduct Incidentals
The answer depends on your tax status.
Self-employed travelers filing Schedule C can deduct business travel incidentals against their self-employment income. You can choose the per diem method for meals and incidentals or track actual expenses, but you must pick one and use it for the entire trip. Lodging always has to be deducted at actual cost with supporting documentation — the per diem method isn’t available for it.1Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses The $5 incidentals-only rate is available to self-employed travelers on the same terms as employees, which is useful when your meals are covered.6Internal Revenue Service. 2025-2026 Special Per Diem Rates – Notice 2025-54
W-2 employees have far less flexibility. The Tax Cuts and Jobs Act of 2017 eliminated the deduction for unreimbursed employee business expenses starting in 2018, and that suspension has since been made permanent. Employees cannot deduct unreimbursed travel incidentals on their personal returns.
For employees, the practical takeaway is that your employer’s reimbursement policy decides everything. If your company doesn’t reimburse incidentals and doesn’t offer a per diem, those tips and small fees come out of your own pocket with no tax benefit on the back end. Ask whether a per diem option is available, since even the $5 daily incidentals-only rate keeps you from absorbing the cost entirely.