For many small business owners, traveling a few times a year (or even as often as every week) is a necessity. Fortunately, you can deduct many of your business expenses on your taxes. Knowing which expenses are and aren’t eligible for write-offs can save you a lot of headache come both tax time and the busy holiday travel season.
Here’s our guide to identifying several deductions and making your winter business travel easier.
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Expenses that are tax-deductible
As long as you are actually conducting business in a city other than the one you live in, the following business expenses generally qualify as tax-deductible.
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Transportation
Whether you fly, take a train or bus, or rent a car to get to your business meetings or conference, you can deduct the expense. Toll and parking fees qualify as well. And don’t forget your standard mileage rate deduction. For every mile you drive for business, you can currently deduct 57.5 cents. This offsets what you spend on gas and upkeep on the car (it also counts whether it’s your own car or a rental). Taxi rides count as well, so make sure to get a receipt.
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Meals
The IRS will let you deduct dining expenses, within reason. According to the IRS website, the deduction for business meals is generally limited to 50 percent of the cost. So, before you go for that $100 feast, realize that only half qualifies for write-off.
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Lodging
You can also write off your accommodations. Be sure to ask for an itemized bill when you check out, because some hotel expenses might be ineligible (like your trip to the mini bar or a movie rental).
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Conference fees, equipment rentals & miscellaneous expenses
Any expenses you incur that are necessary for your business trip, like registration for an event, renting equipment for a presentation, or dry cleaning and laundry for your business apparel all qualify for a tax deduction.
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Expenses that aren’t tax-deductible
There’s no getting one over the IRS. It’s a fact that people try to claim all sorts of strange things as business expenses. Save yourself the trouble, as engaging in this behavior will only increase the odds of you being audited.
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Family travel costs
Bringing your family along on a business trip can be fun, but their expenses don’t qualify for a tax write-off. Yes, your hotel is a business expense, but that’s because you would need one whether your family is there or not. Their plane tickets and meals can’t be deducted.
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Expenses in your home city
While you may conduct business in your town, only your standard mileage rate and meals — assuming you dine with business contacts — are deductible. You can’t, however, rent a hotel room within a reasonable distance of your home (even if you spend the day at a conference at a nearby hotel) and expect to be able to write it off.
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Unreasonable expenses
Sure, this category is a bit nebulous, but there’s no telling what the IRS will flag. The rule of thumb is that if you feel an expense is not necessary for you to conduct business, don’t claim it. Being audited is no fun, and it’s not worth getting caught to try to reduce your taxable income with questionable expenses.
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Final tip
Keep your receipts together while traveling to make it easy to file them all when tax time rolls around. Better yet, use an expense-tracking app to scan and archive each receipt as you receive it. That way, you’ll have a backup if you lose any physical copies.
This article originally appeared on QuickBooks.com and was syndicated by MediaFeed.org.
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