Tips for Maximizing Your Travel Deductions

One of the financial benefits of being an entrepreneur is the ability to deduct business expenses from your earnings. This is something you should take full advantage of because your spending serves two purposes. Careful spending actually invests value back into your business and it circulates money in the economy.

Traveling for business is often a necessity as it allows you to attend training and conferences, work face-to-face with clients, or pursue new business. It’s imperative that you understand IRS rules regarding travel and entertainment deductions. Be sure to enlist the help of a qualified tax professional.

Here are a few tips to maximizing your travel deductions:

Create a paper trail

If you’re truly traveling for business, you are going to have to produce proof that the trip was, in fact, a business trip. Make sure you document the exact reason for the trip, gather as much evidence as possible, and actually be able to show that you dedicated the requisite amount of time to business. Always pick up programs, itineraries, business cards, and keep copies of correspondence related to your trip.

Keep a diary

Write down your innermost secrets. I'm kidding. Write down what you do throughout the day. Otherwise, it’s likely that you will allow a significant amount to slip through the cracks. Where did you eat for each meal? Did you have to pay for parking? Did you pay for tolls or gas? Forgetting expenses here and there will add up to a small fortune in missed deductions throughout the year.

Take the short cut

If you have employees or if you travel frequently, keeping track of every little expense can be a nightmare. Instead, you may opt to use the per diem method. This sets a certain allowance per day to cover miscellaneous expenses. If you choose this route, check with a tax professional for the details, but it can be a lifesaver.

Plan ahead

Remember, you will have to dedicate a significant portion of your trip specifically to business-related activities. So plan ahead to carefully incorporate time for sight-seeing , adventure, and relaxation. It’s a shame to visit a new exciting destination and spend the whole time cooped up in conference rooms. Get out and live a little!

Grab a sandwich

In other words, take advantage of sandwich days. If it would be less expensive to stay in a destination than it would be to travel home, skip a day or a weekend between scheduled work days. This way, your lodging for the weekend is still covered.

These tips are just a start. Traveling for business is not always fun. Many confuse business travel with jet-setting, glitz, and glamour. Nothing could be further from the truth, especially if you traded in your corporate expense account to fly on your own dime. Anyone who’s been a road warrior knows business travel can be grueling. So, since you’re making sacrifices to invest in your business and in the economy, never hesitate to maximize your business travel deductions.

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