Here’s a little snippet of what you can and can’t do.
As a small business owner, you may find it hard to break away. There always seems to be so much to do! However, small business owners have an advantage when it comes to deducting business trip expenses.
It Has to be About Business
While you may get some much needed rest when you’re on your trip, the primary purpose needs to be about business. Set up your appointments in advance and plan time to attend conferences. Something that we find helps is to count the number of business days you will be away and make sure that the majority of those days are spent doing business-related activities.
Know Which Expenses are Deductible
Not every aspect of your trip will be deductible, so it’s important to keep these few things in mind. Here is a list of things that you can deduct as long as they are incurred on a day that you do business:
1.) Travel Expenses- Airfare, bus passes, transportation (rental cars, Uber, Lyft, etc.), and parking fees are all things that can be deducted if used for business purposes.
2.) Lodging-You can deduct 100% of your lodging for each day that is considered business.
3.) Food- You can deduct 50% of your food costs for each day that is considered business.
4.) Other Business Fees-You can even deduct any fees that may be necessary for business such as renting a space to conduct your business meetings or appointments, tips or baggage fees.
Please also note that you cannot deduct any expenses for your family.
Remember to keep any and all receipts for your deductible expenses. It’s important to have a record of what, where , and when you purchased the deductible items. Keeping these documents organized will make it easier when you go to deduct them on your tax return later on.
It’s also important to be honest about your expenses. Any expenses that are extravagant or for personal use will not be acceptable. Keep your expenses modest. If the IRS comes knocking, they will not hold back. It’s in your best interest to make sure that you have everything on hand to prove that the deductions you took were qualified.
If you have more questions, or need help with your individual or business tax return, reach out to us at Private Tax Solutions! We are here to aid you with all of your financial needs.