As a business owner or entrepreneur, business travel can get pricey, but that doesn’t necessarily mean you should reduce your business travel spend to help boost your bottom line. After all, business travel can be highly beneficial to your company when it comes to developing and maintaining long term customer relations and building your business.
While you may not be able to avoid travel expenses, one thing you can do is save all your business spending receipts as those costs may qualify as tax deductions. Then, at the end of the year, you’ll find that you save on your overall taxes due.
If you see value in this opportunity, it’s extremely important that you keep track of your business travel deductions appropriately — not everything counts as a deduction, and the IRS doesn’t take kindly to mistakes on your tax filings. To make things easier, here are the three major business travel expenses that you can possibly write off on your taxes in 2020.
Tax Deductible Business Travel Expenses
Business Travel Deduction #1: Meal Costs
Meal costs are somewhat tricky. While you think that you should be able to deduct all your dining costs while traveling for work (after all, you have to eat!), the IRS disagrees. Your meal costs are only deductible when you’re either eating alone or when you’re eating for business purposes — say, with a client at a lunch meeting. Additionally, the cost of dining alone is only deductible if your trip is overnight or long enough that you have to stop for rest. Even after all this, you can only deduct 50 percent of the cost of your meals.
Business Travel Deduction #2: Lodging
According to the IRS, you’re traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day’s work, and you need to get sleep or rest to meet the demands of your work while away. Fortunately, writing off your lodging expenses is easier than dealing with meal costs. All you’ll need to do is ask for an itemized bill at check out. This way, your accountant can separate the cost of your stay from other costs that may not be deductible, such as in-room movie rentals.
Business Travel Deduction #3: Travel
Travel by airplane, train, bus or car between your home and your business destination is deductible if you’re traveling solely for business purposes; they would not be deductible, for example, if you were going to visit family on the other side of the country, but you happened to meet with a client while in the area. Additionally, you can deduct fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel and the work location, and from one customer to another, or from one place of business to another. If you rent a car, that qualifies, as do tolls and parking fees. If you take your own car, you can deduct the standard mileage rate, as well as business-related tolls and parking fees.
Taking this into consideration, many business travelers choose the most convenient transportation options available, in order to maximize efficiency while on their business trip, knowing that they can write off the cost at the end of the year (versus picking public transportation or a budget option, just to save a few cents, even if it means losing valuable working time). Teddy’s provides business travelers with a safe and efficient transportation option throughout the Connecticut and New York areas; the team’s chauffeured private car service gives executive travelers the space and amenities they need to keep their productivity up, even as they get from point A to point B.
When you’re traveling for business, consider using a private car service. At Teddy’s, we specialize in delivering 5-star transportation services to our executive and corporate travelers and have technology that makes Tax Season easier with real-time transmission of client billing information and tracking.