Business travel expenses can be overwhelming to say the least. This is especially so if you have to travel great distances to accomplish your business goals. However, you do not have to grapple with hefty bills; you can simply deduct your next business trip accordingly. This simply means that you can reduce the amount taxable for your travel owing to your expenses. To take advantage of this incentive though, it is critical that you do it legally. There are many shortcuts that people employ; but duly deducting your business travel is the only sure way to uphold your integrity. The information below shows you how to deduct your next business trip legally.
- Your business trip has to be primarily for business purposes – The most important element is to make your business trip mainly about business. Pleasure should be secondary if any. This is to say that your business days must outnumber the personal days. Travel days will fall under business days. In addition, if your business days fall between a weekend, the weekend will also be considered as business days. Therefore, be diligent enough to make your travel about business and you will not have trouble deducting your business trip.
- Know which expenses are deductible – Expenses that qualify for deductions are clearly laid out. To begin with, it is only your expenses that will be considered or those of your “real” employee. This is to say that if you are traveling with your kids for example, their expenses do not quality for travel deduction. This is because the deductions focus on your business travel cost. The specific expenses that qualify for deduction include travel and local transportation, lodging, shipping of luggage; among others. Meals are only 50% deductible.
- Keep your records stellar – The IRS will not require receipts for expenses that are under $75. However, this does not mean that you neglect your record keeping. From tips you offer to the taxi driver or waiter, it is vital to have clear documentation of all your expenses and the specific days. In addition to recording your expenses, record the actual date in which your incurred the expense. This is a sure way to optimize on your deductibles.
Finally, do not be tempted to play dirty. People have faked trips or included expenses that are not real in a bid to get the deductions. The IRS has seen it all and they will get to the root of any suspicious record. In essence, doing your part diligently will always give you excellent deductions for your business trip legally.