Tax Tidbit #5: Deductible Business Travel Expenses
My Aunt and Uncle are in town for a business trip and we just spent a lovely day on the California coast. In the course of our conversations, I reminded them to save their receipts from this trip for their taxes. Which brings me to an easy tax tidbit for this week.
If you are traveling for business you can deduct the entire cost of travel transportation, from airfare to cab fare, and your hotel expense. You can also deduct any business related parking, telephone, and internet connection fees.
There are two commonly overlooked business travel deductions, tipping and dry cleaning. Tip your driver, bellhop, and housekeeping staff. Simply keep your receipts and take the deduction’”especially if you paid cash. Having your dirty laundry cleaned while you are traveling might seem extravagant, it is 100% deductible. At that price, why not go home with a suitcase full of clean laundry!
There are exceptions to every rule. Meals are the exception when it comes to business travel expense deductions. You can only deduct 50% of your dining expenses while traveling. If splurging on a more expensive hotel for your business trip sounds great, remember it is deductible at 100%. But that fabulous gourmet meal is only deductible at 50% — perhaps three or four stars will have to do.
The IRS has fine print for everything. If you have more questions, refer to Tax Topic 511 ‘“ Business Travel Expenses. It provides more detail about deductible business travel versus non-deductible personal travel.
Allision: Any tax tips for those of us with reimbursable business expenses? If some items (e.g. tips, dry cleaning, etc) aren’t reimbursable by the company, can we keep track and take the deduction?