Deducting Business Travel Expenses

Business owners can deduct business related travel expenses if the travel is:

Ordinary AND necessary

Business related

Temporary

Away From Tax Home

Documented and Substantiated in writing

Not personal (unrelated to business)

An ordinary expense is one that is common and accepted in your trade or business.

A necessary expense is one that is helpful and appropriate for your business.

A business related expense is one that is incurred for the active conduct of present or future business.

Travel is temporary if it is reasonably expected to last (and does in fact last) for 1 year or less.

Traveling away from home occurs if:

Your duties require you to be away from the general area of your tax home substantially longer than an ordinary day's work, and

You need sleep or rest to meet the demands of your work while away from home.

Tax Home is your regular or main place of business, regardless of where you maintain your family home. It includes the entire city or general area in which your business or work is located.

You must document and substantiate travel expenses included on your tax return with the following information:

Dates

Locations

Description and amount of each travel expense

Business Purpose

Business Relationship

The following business related travel expenses are generally deductible:

Airfare

Bus

Limo

Subway

Taxi

Auto Rental

Dry Cleaning/Laundry

Entertainment

Lodging

Meals

Parking

Road Tolls

Telephone/Fax Fees

Tips

Wi Fi fees

Other if business related.

You can deduct travel expenses of someone who goes with you (an employee, business associates, a spouse) if that person:

                        1- Is your employee

                        2-Has a substantial (bona fide or real) business purpose for the travel, and

                        3-Would otherwise be allowed to deduct the travel expenses.

Personal and Not Business Related

You cannot deduct personal travel days or expenses that are personal in nature and unrelated to the active conduct of business.

This article was written by  Donald M. Scherzi, CPA, CFP, LLC 

Mike Lupo, SCORE Counselor

Visit us at: www.scoresouthflorida.net