There are a lot of expenses that business owners can deduct from their taxable income but it is difficult trying to stay on top of all the IRS’ rules for self employed taxpayers. One of the most confusing expenses are travel expenses. If you own a small business chances are you've got enough to think about. That’s why I’m here! I recently read an article in USA Today. USA Today did a good job putting together a helpful article explaining which travel expenses are safe to deduct and which are not.
The deadline to file taxes is just around the corner and knowing what business travel and entertainment expenses you can and can't deduct is critical so you don't pay the IRS more than you should or lose a legitimate write-off because you can't document it or risk an audit because your expenses went overboard.
"I always tell people, for taxes, it's the difference between what you earn and what you keep," says Barbara Weltman, a tax expert who advises small businesses. "You could earn a significant amount of money, but if you don't take legitimate deductions, then you're paying more taxes then you need to."
The truth is, you can write off everything from that suit you had dry cleaned on a business trip to the fax you sent from the hotel, as long as you have the records to back it up.
"Record keeping is so crucial," says Frank Degen, an agent licensed by the IRS to work with taxpayers and who is based in Setauket, N.Y. "You need to have records of the four 'P's' and a 'D,' and the four 'P's' are the person, the place, the purpose and the price, and the 'D' is the date. That's an easy way for business owners or self-employed people to remember what they need to do."
