I took a business trip to Florida with my family. Can I deduct travel expenses?
For the self-employed entrepreneur and small business owner, as long as the trip was primarily for business, the costs of meals, lodging, transportation and other related business travel expenses are ordinarily deductible, if paid or incurred while you are traveling away from home on business. The key to successfully justifying the expense as business and not personal is good record keeping.
Unfortunately, no deduction is allowed for the travel expenses of your family since they are not employees of your company.
Do I need to save all receipts to deduct travel expenses?
Especially for the self-employed business owner, it’s important to keep your receipts. You must be able to prove the deduction in case your return is ever audited by the IRS. It’s good practice to always keep receipts in order to substantiate the expense, especially for lodging expenses which are always required.
I lost some business receipts, can I still put those down?
Small expenses and those that are clearly related to the business can be substantiated by a “taxpayer’s statement” if needed. If the expense is less than $75, supporting evidence is not generally required, but you should always try to keep all receipts.
What about business meals and entertainment expenses?
Business meals and entertainment expenses are only 50% deductible. The business relationship must be substantiated. Good accounting records would generally include a record book or expense log to document the expenses during the business trip.
We drove there so how do we figure the amount to deduct?
Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car is 53.5 cents per mile for business miles driven, down from 54 cents in 2016. You do have the option of claiming deductions based on the actual costs of using your vehicle rather than the standard mileage rates, but your best bet is to use the standard mileage rates.
We did visit Disney World and spent a few days to vacation.
As long as your trip was primarily for business and you have documented your business travel activities with a log or record book you should not have any problem deducting your business travel expenses. Be sure to carefully follow the rules on business travel outlined on the irs.gov website in case your return is ever questioned.
The information presented in the above article is general in nature, and not warranted or guaranteed. Your situation will likely vary from the example above, so be sure to speak with a Certified Public Accountant or a trusted tax advisor to discuss your specific situation.
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To your success!
Noel B. Lorenzana
Disclaimer: Any accounting, business or tax advice contained in this article, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, I would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.
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