| Figuring out which business travel expenses are | | | | let's get down to the list of items you can deduct from |
| tax-deductible according to IRS regulations can be | | | | your business travel. The related IRS regulation or |
| tricky, especially if you are running on your own | | | | publication is listed after each category. |
| business and you don't want to visit your accountant | | | | Business Meals |
| with every little question. What gets even trickier is | | | | Half the cost of all your meals during actual business |
| trying to decipher whether travel expenses are | | | | days can be deducted. This is true whether you met |
| deductible if you have combined a business trip with | | | | another person for a meal and picked up the tab, or |
| some leisure activities. | | | | you ate alone. (1.162-2(a)) |
| This article outlines the basic travel expenses that you | | | | Transportation |
| can deduct as a legitimate business expense. But | | | | This usually makes up a bulk of your business travel |
| before diving in, I need to give you a definition, and that | | | | expenses. These expenses include rental cars, airline |
| is the definition of a business day. | | | | tickets, airport shuttles, taxis, and trains. (IRS Publication |
| What Does the IRS Consider a Business Day? | | | | 463) |
| Any of these qualify as a business day: | | | | Laundry |
| - a day on which you travel getting to and from your | | | | Any dry-cleaning or laundry expenses associated with |
| business destination | | | | clothes that you wore on the business part of the trip |
| - a day when you spend at least 4 hours on business | | | | can be deducted as a legitimate travel expense. |
| related activities | | | | (Internal Revenue Ruling 63-145 and 1963-2 C.B. 86) |
| - a day when you have a pre-scheduled appointment | | | | Lodging |
| The first two are relatively simple to understand. Just | | | | Any lodging costs, such as your hotel bill, are travel |
| be sure you have documentation to back up your | | | | expenses that can be legally deducted. (IRS Publication |
| travel, such as ticket stubs. On days when you are | | | | 463) |
| spending at least 4 hours on business activities, your | | | | Tips, Gratuities, Phone Calls |
| activity log serves as documentation. | | | | If you had to tip a cabbie, a porter, or a maid, then you |
| On days when you have a pre-scheduled appointment, | | | | can include these expenses as a part of your travel |
| you have to be able to prove that you actually | | | | expenses. These should be associated with business |
| attended the appointment. How do you prove it? If you | | | | days. Business related phone calls, whether local or |
| met someone for a meal and picked up the tab, the | | | | long distance, may also be deducted. (1.162-2(a) and |
| receipt from the meal serves as proof. Otherwise, | | | | IRS Publication 463) |
| you'll need to print out emails from before and after | | | | Does that sound simple enough? As always, |
| the trip to the person or people you met. The email | | | | remember that the devil is in the details, or in this case, |
| from before your trips proves that the meeting was | | | | the documentation. This article outlines all the legal |
| pre-scheduled. The email sent after the meeting (for | | | | business travel expenses you can deduct, but you |
| instance, thanking them for meeting you) proves that | | | | really can only deduct these if they are properly |
| you were at the meeting. | | | | documented. So deduct away as long as your |
| Tax-Deductible Business Travel Expenses | | | | document! |
| Now that we've gotten that definition taken care of, | | | | |