How to Deduct Business Travel: Part 2
You’ve traveled for business, and now it is time to figure out your business travel deductions. What is “ordinary and necessary” and can be deducted on your business tax return?
Transportation Flight, train, and car travel to and from the convention or meeting is deductible. Travel by boat, such as an ocean liner or cruise ship, has a daily limit of twice the highest federal per diem rate allowable. Cabs are also deductible to and from the airport and conference or meeting.
Lodging Hotel costs for days that you attended the conference and reasonable stays before and after are deductible. This includes business-related costs at the hotel like faxes and internet access. Extras like spa treatments or pay per view movies are not included. Days that you add to the trip for vacation or touring are also not deductible.
Conference fees The fees associated with attending a conference are deductible. If you add on personable items like tours, playing golf, etc., those are not deductible.
Meals and Entertainment Costs while on business for food, beverages, taxes, and tips can be deducted. Entertainment expenses that are directly related to your business may also be deductible. To qualify, you must show proof that the entertainment is associated with your business and occurs directly before or after a business discussion of substantial nature. Conducting business must also be the primary purpose of the entertainment. Any substantial distractions that could occur during the entertainment render the costs not directly related to business.
Any reimbursements on travel can be subject to limitations. Meals can generally only be deducted at 50% of the unreimbursed cost. Expenses that fall into multiple categories must be allocated as such.
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