Many travelers out there are finding every way to cut expenses. You can pack light to minimize baggage fees. You can also grab all the available, affordable deals from hotels. Booking cheap flights months from now can also cut the cost of your travel. But with business travel, you have the leisure to have a journey with minimal to zero money spent.
You might ask, “can I deduct luggage for business travel?” Luckily, yes. Yes, you can deduct luggage or baggage fees if you are on business travel. Keep reading to know more about business travel here.
>> Need to bring a couple of cards for your business trip? Use a business card holder.
List Of Business Travel Expenses
Here are some of the expenses you can claim as business travel deductions:
- Shipping of baggage or display material from your regular to a temporary work location.
- Travel by bus, train, car, or airplane between your home and business
- Destination (If you have a ticket or you’re riding free due to frequent traveler or similar deals, your cost is zero.)
- Taxi fees or other types of transportation between:
- Your train station or airport and your hotel,
- The hotel and workplace of your clients or customers, your business place, or your business work location.
- Lodging and essential meals.
- Laundry and dry cleaning.
- Business calls while on your trip including communications by fax machine and other communication devices.
- Tips you give for services linked to any of these expenses.
- Using your car while working on the business destination. You can deduct expenses or the approved mileage rate, as well as related tolls and parking fees.
- Other ordinary and necessary expenditure related to your business trip. (These expenses may include public stenographer’s fees, computer rental fees, transportation to and from a business meal, operating and maintaining a house trailer.)
How To Qualify Your Travel As A Business Trip
Here are the ways to ensure that your travel is considered a business trip.
1. Plan Your Trip In Advance
For example, you can’t just go to Universal Studios, give out business cards to anyone you meet, and then call it “networking.” You could hope that you can deduct this from your taxes, but no – you cannot. You have to plan business travel in advance. While preparing for your trip, find out the location you will be in each day. Plus, write down the time outline who you will spend your time with. Prepare your plans in writing before your flight. It will also help if you email a copy of it to someone to get a timestamp. This proves that there is a professional and diligent intent behind your business trip.
2. Your Trip Must Be “Mostly” Business
The IRS records your time away in days. For a journey to be called a business trip, you have to spend most of your time doing business. For instance, say you go traveling for a week. You spend five days engaging with clients and two days relaxing on a beach. That is considered a business trip. But if you spend three days attending with customers and four days tanning on the beach? That’s called a vacation. Fortunately, the days that you travel to and from your location are counted as workdays.
3. You Must Leave Your Tax Home
Your tax home is the place where your business is located. Traveling for work is not considered a “business trip” when you do not leave your tax home longer than a typical workday. This all comes with the intent of conducting business in another location.
4. The Trip Needs To Have “Necessary And Ordinary” Expense
“Ordinary and necessary” is how the IRS defines costs in a business trip. These expenses are “ordinary” for a business, considering the industry it’s in and “necessary” for conducting business activities. If there are identical conferences taking place in Honolulu and your hometown—you can’t request an all-expense-paid getaway to Hawaii.
The same thing applies if you have to rent a car to move around. With this, you will have trouble just to have a Range Rover if a Toyota Camry will get you there just as quickly. What is considered “ordinary and necessary” can seem vague sometimes, and people may be tempted to fudge it. The best advice you can have is to err on the side of caution. The moment the IRS investigates and discovers you’ve stated an expense that wasn’t necessary, you could face severe penalties.
Rules Outside The USA
There are different rules and regulations when traveling outside the USA. Business trip rules are somehow relaxed when you have a trip abroad. If you travel outside the states, you only have to stay at least 25% of your time outside the country doing business for the trip to be considered as a business trip. If you have a journey outside the USA but spend less than 25% of your time conducting business, you can still have travel costs deductions proportional to your time working during the business trip.
For instance, you go on a five-day international journey. If you spend two days doing business work, you can qualify the entire cost of the airfare as a business expense deduction—as two days out of five is 40% of your time. But if you only conduct business for one day out of the five-day trip—or 20% of your total time—you can only deduct 20% of the cost of your airfare, as the journey is no longer considered as business.
Yep! You can deduct luggage for business travel. But still, traveling light can give you the best travel experience. With minimal luggage and fewer things, you can have more space for your head to enjoy and be present with your business trip.