If you intend to deduct business travel expenses on your income tax return, you need to keep organized and adequate records. In the event that you are audited, having proper documentation will ensure that you will be able to substantiate your deductions and get the tax savings for which you are eligible.
Setting up a system that helps you keep good records of your business travel expenses can be easy. Follow these five tips:
1. Keep a timely record of expenses. Take a few minutes each day to record the expenses, while the information is fresh.
2. Collect all receipts in a designated place – a large envelope of folder.
3. Identify each receipt with the date, customer name and business purpose. Even if your receipts are scattered, you will have the appropriate information.
4. Keep a log that records the date, event, expenses and business miles traveled. If you have expenses without receipts, the log serves as your record.
5. Maintain a weekly expense report. It will be considered a timely kept record for IRS purposes.
Note: If you account to your employer under an accountable plan, the rules are different.
assistance in setting up a record system for your business travel that complies with annual audit requirements.
Originally published 6-5-2014