April 15th is ancient history in our busy business world, but the new tax season is upon us and we’re already thinking about the travel expenses worth claiming for 2013. The Internal Revenue Service has strict rules on what it considers “legitimate” business travel deductions – and it doesn’t mess around when travelers manipulate the tax rules. So, to avoid trouble, here’s a short guide on the dos and don’ts for road warrior write-offs:
Do: Claim anything business related
If your company doesn’t reimburse you for all or most business expenses, claim ’em. To be deductible, the expenses have to be both “ordinary and necessary” meaning if the expense is an industry standard that helps you make money for your company or yourself, you can probably claim it. That includes things like: gasoline for business trips, phone calls, baggage fees, taxis, lodging, food and beverages, even laundry service.
Just be sure the expenses are legit, and document everything in case of an audit.
Don’t: Claim fun time off the clock
Mixing business and pleasure? Be sure you don’t mix them up on your tax return. If you’re on a business trip and throw in some personal days on the side, the IRS – and your travel manager – want you to differentiate the expenses. Many business travelers are guilty of twisting their line items on “bleisure” trips (that’s business and leisure).
Don’t risk it. These days, the IRS will even check the nature of your conventions to make sure they weren’t “vacations in disguise.”
Do: Keep meticulous records
How do you avoid trouble? Keep records of your receipts. Digital records work best, but experts warn proof of substantiated business experiences could be as simple as your convention’s program booklet or brochure. Those print pieces list sponsored excursions or events – that means the $20 worth of golf balls you bought onsite for your corporate golf tournament could be claimed. Just keep or upload your receipt!
Do: Check in with travel and finance managers
It’s worth a reminder from travel and finance managers on which travel expenses could be claimed internally, and which should be saved for the IRS. When in doubt, there’s no shame in double-checking – these people are your travel and expense policy keepers, and they know the rules on what you can and can’t expense down pat.
Figuring out how taxes and business expenses work together – or don’t – can be confusing. These days, most business travelers mix business and pleasure on occasion, but it’s vital to keep the two separate for the sake of your travel and finance department, let alone Uncle Sam. But making sure you claim business travel deductions that legitimately aide your business travel, and the paperwork to back it up, will keep you legit with the IRS.
How can you easily document your expenses? Why not try the receipt capturing abilities of the Concur mobile app.
Photo credit: Alexandre Dulaunoy