Copyright 2018 - Pfeiffers Accounting & Consulting LLC

Some general IRS guidelines for 2012 in regards to business travel expenses are as follows:

1. You are traveling away from you tax home if your duties require you to be away from home for more than an ordinary days work, and you need to sleep or rest to meet work demands while away, as long as this is met, you can deduct the business travel expenses associated with it.

Note: Your tax home is the city or where your main place of business is, regardless of where your family home is.

2. travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business.

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

1. Travel by airplane, bus or car between your home and your business destination

2. Using your car while at your business destination

3. Fares for taxis or other types of transportation between one location to another ( while at your destination).

4. Meals and lodging

5. Tips you pay for services to any of these expenses

6. Dry cleaning and laundry

7. Business calls while on business trip

8. Other similar ordinary and necessary expenses related to business travel.

*These expenses can include transportation to and from business meal, computer rental fees, public stenographer fees, etc.

 

In recording and keeping records of your travel, meals and entertainment expenses are treated a little differently than your other business expenses because you are required by the IRS to support your expenses with adequate additional records or evidence. In order to keep accurate records on a regular basis, you should keep an expense report record for all of your travel, meals and entertainment expenses.  You should make sure you follow these guidelines when setting up the records:

1. Decide how often you will need to track the travel, meals and entertainment expenses.  Usually for most businesses, a monthly record is adequate.

2. Fill in the Month, year.

 

4. Below the total, separate each category type out.  For example, you would have meals, entertainment-meals, lodging, airline travel, and other travel fees.  Each of these category types will be totaled.  From these totals you will get a final total which should match your total from the top category totals.

5. At the end of the month, your records for  your own travel, meals and entertainment expenses recorded.

These records will become valuable pieces of information for your CPA or accountant for year end when figuring out your totals for deductions for travel, meals and entertainemnt purposes.

The rule from the IRS in relation to business travel expenses are as follows:

Travel expenses

At year end, you will be able to deduct the total business travel expenses that are allocated only to you the owner, and you can deduct 50% of your meals and entertainment business expenses in the other deductions portion of your company tax return. There is another article that discusses other deductions in more detail in another article for you to get familiar with.

Also, be aware that if you use your personal credit card to make purchases while on a business trip, you can still record them through your owners drawing account.

Copyright Jeanine Pfeiffer

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