Outsourced Accounting / Know the Rules on Business Travel

Know the Rules on Business Travel

Are you working on this year’s tax return or planning for the future? Either way, you should know the rules on business travel tax deductions.

According to the IRS, whether someone travels for work once a year or once a month, figuring out travel expense tax write-offs might seem confusing. Fortunately, the IRS has information to help all business travelers properly claim these valuable deductions while avoiding erroneous deductions that could lead to penalties.

The main travel tax details

Business travel deductions are available when employees must travel away from their tax home or main place of work for business reasons. A taxpayer is traveling away from home if they are away for longer than an ordinary day’s work and they need to sleep to meet the demands of their work while away.

You can’t go over the top and just send the government the bill, however. The IRS reminds travelers that such expenses must be ordinary and necessary. They can’t be lavish, extravagant or for personal purposes. Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year.

Travel expenses for conventions are deductible if attendance benefits the business. However, the IRS has special rules for conventions held outside North America.

What is deductible?

According to the IRS, the following are all deductible:

  • Travel by airplane, train, bus or car between your home and your business destination.
  • Fares for taxis or other types of transportation between an airport or train station and a hotel, or from a hotel to a work location.
  • Shipping of baggage and sample or display material between regular and temporary work locations.
  • Using a personally owned car for business.
  • Lodging and meals.
  • Dry cleaning and laundry.
  • Business calls and communication.
  • Tips paid for services related to any of these expenses.
  • Other similar ordinary and necessary expenses related to the business travel.

How BlueStone Services Can Help

The IRS may question your deductions, so be sure to keep good records. These records will also help you prepare your tax returns. Evidence of your travel may include receipts, canceled checks and other documents that support a deduction, according to the IRS.  Especially if you travel extensively, it is important to work with a qualified tax advisor. At BlueStone Services, we make sure that your records remain up to date and in sync no matter where you do business. Contact us today to get started working with an outsourced accounting service.

Meanwhile, you can check further details on the IRS site.

 

Keep informed
Receive tips on how you can use outsourcing to save time and improve your business processes.

Related Articles

02/07/2024

Choosing a Business Structure: C Corps, LLCs, PCs and S Corp

How to structure your business is one of the first, and most important, considerations a business must make. Following are details about four

Read More  
02/07/2024

New Independent Contractor Rules: Do They Affect Your Employees?

The Department of Labor’s final rule for employee or independent contractor classification under the Fair Labor Standards Act rescinds the 2021

Read More  
01/08/2024

Payroll Tax Rates and Contribution Limits for 2024

Understanding payroll tax rates and contribution limits is crucial for both employees and employers as it directly impacts financial planning,

Read More  
BlueStone-logo