Figuring out which business expense travel are tax-deductible in keeping with IRS rules will be tricky, particularly if you are running your own business and you do not want to visit your accountant with each very little question. What gets even trickier is trying to decipher whether expense travel is deductible if you have combined a business trip with some leisure activities.
This article outlines the first expense travel that you’ll be able to deduct as a legitimate business expense. However, before diving in, I would like to offer you a definition, and that’s the definition of a working day.
What Does the IRS Consider a Busin?
Any of those qualify as a business day:
• Every day on which you travel getting to and from your business destination
• Daily after you pay at least 4 hours on business connected activities
• A day when you’ve got a pre-scheduled appointment
The initial two are comparatively easy to understand. Just be positive you’ve got documentation to keep a copy your travel, like price tag stubs. On days when you are spending a minimum of 4 hours on business activities, your event log serves as documentation.
On days when you have got a pre-scheduled appointment, you need to be ready to prove that you just attended the meeting. How does one prove it? If you met someone for a meal and picked up the tab, the receipt from the meal serves as proof. Otherwise, you’ll want to print out emails from before and when the trip to the person or individuals you met. The email from before your visits proves that the meeting was pre-scheduled. The email sent once the meeting (as an example, thanking them for meeting you) shows that you were at the meeting.
Tax-Deductible Business Expense Travel
Now that we’ve gotten that definition taken care of let’s get down to the list of things you’ll be able to deduct from your business trip. The connected IRS regulation or publication is listed after every class.
0.5 the cost of all your meals throughout actual working days can be deducted. This is true whether you met another person for a meal and picked up the tab. Otherwise, you ate alone. (1.162-2 (a))
This usually makes up a bulk of your business expense travel. These expenses embody rental cars, airline tickets, airport shuttles, taxis, and trains. (IRS Publication 463)
Any dry-cleaning or laundry expenses related to garments that you only wore on the business part of the trip will be deducted as a legitimate travel expense. (internal revenue ruling 63-145 and 1963-a pair of C.B. 86)
Any accommodation prices, such as your hotel bill, are expense travel that can be legally deducted. (IRS Publication 463)
Tips, Gratuities, Phone Calls
If you had to tip a cabbie, a porter, or a maid, then you’ll be able to include these expenses as a part of your expense travel. These should be related to business days. Business-related phone calls, whether native or long distance, may conjointly be deducted. (1.162-2(a) and IRS publication 463)
Will that sound easy enough? As forever, bear in mind that the devil is in the details, or during this case, the documentation. This article outlines all the legitimate business expense travel you’ll deduct, but you really can only deduct these if they are complete. Thus, deduct away if your document!