Get Tax Benefits Straight Before Your Business Trave
A lot of things can happen with a leisurely travel. Unexpectedly, reckless events can happen too if you are traveling for business purposes. This is why it is important that you get your tax benefits and perks in good shape before you fly. This might just be the most perfect time to start doing a trip log. Getting your tax deductions right will help make your next business travel a breeze.
Below are some aspects of business expenses where you can get a good amount of tax deductions. However, you must observe proper standards to ensure that you are not over or under-deducting from your taxes.
Lodging and Meals
For you to avail of a lodging and meal deduction, you are actually required to travel and not stay at home for more than one day. This means that you should do a stay-over for the deductions on lodging and meal to count.
To explain this better, here is an example. Suppose that you are traveling to a nearby town that is just around an hour drive from your home. Then, you stayed there for nine hours to work. The expenses you made for your meals are not eligible to get deductions on your tax. But, let us say you flew to another state and stayed there for three days to attend a weekend business conference. The costs of getting a hotel room and meals can be considered as deductible expenses.
You might be able to get more deductions in terms of transportation. This is because all the costs of traveling from one point to another, be it a plane, bus, train, or car, are eligible for tax deductions. Actually, even the transportation to the hotel you are staying from the airport and back can also be considered.
Now, let us say you used your frequent flyer credits to buy an airline ticket for your business travel and you did not have to pay for anything. You are never entitled to any deduction if this is the case.
If you are driving your own car for your business trip, this is where the method of deducting either the standard mileage rate or the actual expenses comes in.
Differentiating Travel for Pleasure and Business
It is no secret that there are business professionals who do an extension of their trip so that they can take a break after dealing with business. If you are practicing this, you have to remember that you are only allowed to deduct everything that has to do with the business part of the trip. Any cost that incurs after that because of personal reasons will not be covered.
This is where it gets complicated. If your trip is just solely for business, you are actually allowed to deduct 100% of your transportation tickets you purchased going to and coming back. This also means that you are only allowed to deduct the miles you made for business-related travel miles if using your own car. So, it is important that you keep a detailed and preferable separate trip log for business and for personal purposes.