No one likes to pay more taxes than they have to. But it’s possible you may be doing that very thing. Inc.com did a recent story that detailed missed tax deduction opportunities related to business travel. Most expenses related to business travel and convention attendance are fully deductible.
IRS Publication 17 states that expenses incurred not only getting to your destination, but also while you’re there, are 100% deductible—provided the reason for going is entirely for business. If you go for business and stay a few extra days for fun, just make sure you note on your receipts what expenses were for business and which ones weren’t. Deductible expenses include airfare, baggage fees, lodging, ground transportation, meals, and tips. Even if you think it won’t count, save your receipt. Your tax professional will help you navigate the rules and limitations the IRS places on deducting these types of expenses.
Also note that Chapter 26 of Publication 17 allows you to deduct networking expenses. So you can deduct your travel expenses when you attend conventions, if you can show that your attendance benefits your trade or business.
Many business owners miss travel expense deductions because they count some expenses as too frivolous, or they don’t think to gather all receipts. There’s no harm done by saving a receipt for something that doesn’t end up being deductible. But not deducting legitimate expenses you could have claimed means you’ll end up paying taxes you didn’t need to. Even if you think it won’t be deductible, save your receipts anyway. Come tax preparation time, the results may surprise you!