Tuesday, January 16, 2007

DOCUMENTING BUSINESS TRAVEL EXPENSES

From the “I couldn’t have said it better myself” file:

Check out today’s posting at the Small Business Taxes and Management website’s NEWS AND TIP OF THE DAY on “Documenting Travel Expenses” –

“What do you have to document to insure the IRS allows a deduction for travel expenses?

· Amount--The cost of each separate expense for travel, lodging, and meals. Incidental expenses may be totaled in reasonable categories such as taxis, daily meals for traveler, etc.
· Time--Dates you left and return for each trip and number of days spent on business.
· Place or Description--Destination or area of your travel (name of city, town, or other designation).
· Purpose--Business purpose for the expense or the business benefit gained or expected to be gained.

The above documentation should be kept in a diary, account book, log, etc. You can use either a hard copy or an electronic substitute such as a PDA {I use a pocket date book – RDF}. In addition, you must have documentary evidence such as receipts, credit card statements, etc. for any expense for lodging while traveling away from home and for any other expense that is $75 or more. If you're combining business and personal activities on the trip, you be particularly careful in documenting the business portion. For more information, get IRS Publication 463."

1 comment:

Joe Szczepaniak said...

Great tip but can anyone give me a definition of "business purpose"? I can't find a definite answer anywhere. What details of a trip are required to fulfill this requirement?