If you’ve traveled for a conference or visited a client, what can you deduct as costs for your business? Here are some tips to help you separate your personal and business travel expenses, so your business tax preparation will not be hampered by what to count.
The purpose of the trip must be primarily business oriented. You may do non-business activities such as sightseeing while on trip, but the main focus must the primary reason for travel. For conferences, travel within North America is deductible if it can be shown that your directly attendance benefits your business. There are special rules for travel outside of North America.
Expenses should be “ordinary and necessary.” Section 162 of the Internal Revenue Code allows “amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances.” Don’t expect first-class flights and luxurious hotels and meals to be fully deductible.
So what counts as deductible? Transportation, lodging, conference fees, meals, and business-related entertainment. A breakdown of these deductions will be discussed in How to Deduct Business Travel: Part 2.
You should keep excellent records during your business travel, making notes and annotating when needed. The date of the expense, purpose, and anyone else that was with you and what you talked about should be included, so you can defend your deductions if necessary.
If you need help with figuring out business travel or other deductions, our experienced tax settlement professionals can help. Our licensed Certified Public Accountants and Enrolled Agents can effectively handle all of your business tax issues while you concentrate on operations and profitability. For more information on our full range of business tax and accounting services, visit businesstaxpreparation.com today. Contact us by phone at (866) 676-9417 or by email at info@businestaxpreparation.com to receive a free, no obligation consultation.