Business Travel Tax Deductions

Tax Planning for Travel Expenses

It’s necessary to organize business trips so that you can maximize your write-off. Just like other costs of doing business, you are able to claim income tax deductions for business travel expenses that you personally incur in providing services to clients.

As a business owner, you might deduct only for your traveling expenses when the expenses can be defined as standard and required for servicing the clients. Expenses one may well consider extravagant adn lavish, will not be eligible for a write-off. Although not guaranteed, the below types of travel expenses are typically deductible:

• Transportation costs incurred in travelling from your home to the customer site.
• Gas or fuel and the various other motor vehicle expenses incurred while conducting business at a customer’s location.
• Hotel and meal expenses.
• Laundry and dry cleaning expenditures incurred during business travel.

There isn’t a rigid or concrete rule on when travel expense is business- vs personal-related. But one thing that is clear is that you cannot claim deductions ensued through the cost of your everyday trip from personal residence and your office building. Instead, the travel is defined as a personal expense.

Tax deductible travel expenses require that you travel more than a short distance from your main business location to service a customer. This will usually mean you’ll have to go outside the city in which you usually conduct business or, for smaller towns, you will have to leave the general surrounding area. In general, travel expenses are eligible for write-offs when you’ve travelled far on long enough that you’ll have to sleep the night.

However, you can’t stay away from your tax home for too long a length of time, or you might not qualify for the business travel expense tax deductions. You may write-off travel expenses in temporarily working away from your tax home. But, if you provide your services at the client location for an undetermined length of time, you may not be able to claim a travel expenses deduction. This usually means that you might stay at a client site and claim business travel expense tax deductions for no long er than 12 months. When you do realistically expect to work there for more than a year, however, you may no longer claim a deduction for any future expenses of travelling to that work location.Finally, successfully claiming the travel expense deduction requires recordkeeping. To support your deduction, you will need to keep all relevant receipts. And it is helpful to use a log, notebook, or other type of written record to monitor your expenses.

Additional info on travel expenses and deductions could be found at www.irs.gov (Travel, Entertainment, Gift and Car Expenses).