Business Travel Expense Deductions

The IRS imposes stringent record keeping requirements on taxpayers who deduct expenses relating to business travel and entertainment (T&E), including meals, and electronic devices like cellphones. This includes employees who use personal assets to accommodate their employer and are paid on a non-accountable plan. If you do not have the required proof, your deductions may be denied completely.

Deductible travel expenses while away from home include, but are not limited to, the costs of:

• Travel by airplane, train, bus or car between your home and your business destination. (If you’re provided with a ticket or you’re riding free because of a frequent traveler or similar program, your cost is zero.)
  
• Fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel and the work location, and from one customer to another, or from one place of business to another.
  
• Shipping of baggage, and sample or display material between your regular and temporary work locations.
  
• Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.
  
• Meals and lodging.
• Dry cleaning and laundry.
• Business calls while on your business trip. (This includes business communications by fax machine or other communication devices.)
• Tips you pay for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to your business travel. (These expenses might include transportation to and from a business meal, public stenographer’s fees, computer rental fees, and operating and maintaining a house trailer.)
  

Be aware of the regulations and the stringent rules in this area. Contact us if you have any questions regarding your business practices and whether your records would suffice in the event of an audit by the IRS. While we cannot promise to make you audit proof we can help you organize your record keeping so that all the records necessary would be available in the event of an audit.