Everyone loves tax deductions, but the legitimacy of such deductions can get very sticky, very fast. What differentiates valid travel services expenses (lodging) from those pushing the envelope (African safaris)? Let’s take a closer look…
Toeing the line Business expenses are tax deductible only if they are ordinary and necessary and if they are incurred away from their tax home. Typically this is the taxpayer’s place of business or post of duty, including the entire city and/or general area it is located in - not the taxpayer’s actual home. So if you live in Orlando, but work out of Atlanta, your tax home is in Atlanta and includes the entire metro area. Work out of multiple locations? Your tax home is your main place of business. Keeping this in mind will help you ensure cost-savings so you don’t frequent venues too close to your tax home. Putting the “duh” in definitions:
What – no mini golf?! Typically covered items…
Indulging in personal activities on your “business trip?” Personal side trips or stays longer than necessary to perform business are not deductible and expenses must be allocated separately. For example, if you go to Las Vegas for a 2 day industry trade show, but decide to stay in Sin City for the remainder of the week to take in the sights, only the 2 days of the conference would be tax deductible, the rest considered a personal expense. Special rules, however, apply to conventions and cruises, so be sure to make yourself aware of these idiosyncrasies before embarking. The fine print For a more complete description of deductible and nondeductible travel expenses, online resources from the IRS and tax preparation providers such as H&R Block offer more in-depth information. You don’t want to lose deductions on illegitimate claims. You could suffer interest and penalties – and risk the IRS digging ever-deeper into your books. Lost in a mountain of receipts? GTI Travel can help, with travel management solutions designed to cut through the red tape. Discover the difference a customizable travel program can make. Contact us today. #TravelTaxDeductions, #TravelExpenses, #BusinessTravel
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Managing travel expenses offers fabulous opportunities to cut business costs. Though you’d think today’s technology would make getting the best deal an easier process, unfortunately this is often far from reality.
How can your business save on corporate travel expenses?
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