How to Handle Business Travel Expenses

Business travel can be a great way to grow your business, but keeping track of expenses can be a real headache. As a Certified Public Bookkeeper, one of the questions I get asked most often is, "How do I handle business travel expenses?" It’s a great question, and getting it right can save you a lot of time and money come tax season.

First things first, it's crucial to keep a clear record of every single expense. This includes everything from airfare and hotel stays to meals and transportation. A good practice is to use a dedicated business credit card for all travel-related purchases. This keeps your personal and business expenses separate and makes tracking much easier.

What can you deduct? The IRS allows you to deduct "ordinary and necessary" expenses related to business travel. This means the expenses must be common and helpful for your business. Here are a few examples:

• Transportation: Airfare, train tickets, rental cars, and even ride-sharing services like Uber or Lyft.

• Lodging: Hotel or motel stays.

• Meals: You can deduct 50% of the cost of business-related meals. The IRS requires you to keep records of who you ate with, the business purpose of the meal, and the date and location.

• Miscellaneous: This can include things like baggage fees, tips, and communication expenses like using a hotel's Wi-Fi.

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Record Keeping is Key 🔑

To make sure your deductions are valid, you need to keep good records. This is where a lot of small business owners get into trouble. You need to keep receipts for everything, no matter how small.

A great tip is to take a picture of each receipt as you get it. This way, you have a digital copy and a backup in case the paper receipt fades or gets lost.

Using an expense-tracking app can also be a lifesaver. Many of these apps allow you to snap a photo of a receipt, and they automatically categorize the expense for you, making your life a lot easier when it's time to do the books.

By staying organized and keeping good records, you can ensure that you're taking advantage of every possible deduction, saving your business money, and making tax time much less stressful.

As always, if I can be of any help, please reach out to me at; mdaviscpb@qbocleanups.com.