We often hear people who think that business owners get to make some vast number of deductions on their tax returns. We also sometimes hear about businesspeople who think they can make a vast number of deductions. In both cases, the vision they have is larger than the truth.
One of the places where this can be blown out of proportion the most is when it comes to travel. For example, an owner doesn’t get to go to a conference somewhere, attend for two days, put up their family in a hotel while there, then stay for five more days of vacation. At the same point, though, you can also be steered wrong even when staying close to home, for you don’t get to deduct driving to your regular office or expense your lunch during a regular day of work.
So to be an eligible expense, first, travel expenses must be ordinary and necessary – not lavish, extravagant, or for personal reasons. Business travel deductions are available when one must be away from your tax home or main place of work for business reasons. The rule is that this must be for substantially longer than an ordinary day’s work and require sleep or rest to meet the work demands happening there.
Once you are engaging in eligible travel, though, there are a good number of expenses that could become deductions. This includes the actual cost of the travel (be it planes, trains, or automobiles), as well as necessary fares for transportation such as between an airport/train station to a hotel or from a hotel to the actual work location. There is also the actual lodging while there, meal costs during the trip, any shipping needed to get material to the work location, and any tips paid during the trip for any of these expenses.
The lines for all this should not be overly difficult – essentially if it is necessary for the operation of your work tasks, then it is probably an allowable expense. If it is just for your comfort or entertainment, then it is not. But since a lot can still be involved there, be sure to keep good records (and hold onto receipts) while traveling for work. That $10 sandwich may not seem like a lot at the time, but if you do that 10 times in year, those types of things do add up, and keeping track as it happens is worth that small time investment instead of trying to recreate everything at the end of the year.
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