As a small business owner in New Jersey, you know that every deduction counts come tax time. And while you may not think of your travel expenses as deductible, they actually can be – as long as you keep accurate records. The IRS recently released an announcement increasing the optional standard mileage rate for business travel, and while this is good news for small business owners, it also means that now is the time to get your travel records in order. Here are a few tips to help you keep accurate records of your small business travel expenses.
First, let’s define what business travel is. The IRS considers any travel that is directly related to your business – such as traveling to meetings or clients, or for training – as business travel. If you have employees who travel for business, you can deduct their travel expenses as well. Travel expenses can include airfare, hotel stays, car rentals, and even meals and entertainment. There are several ways that you can keep track of your travel expenses, but the most important thing is to be consistent.
1. Use a mileage tracker
If you use your personal vehicle for business travel, one of the easiest ways to keep track of your expenses is to use a mileage tracker. There are several apps available that will automatically track your mileage, and all you need to do is enter in some basic information about your trip. At the end of the year, you can simply print out your report and submit it to the IRS.
2. Keep receipts for all expenses
Whether you’re using your personal vehicle or renting a car, be sure to keep all of your receipts. This includes gas, tolls, parking, and any other expenses that you incur while on your trip. You’ll need these receipts to prove the business purpose of your travel, so be sure to keep them in a safe place.
3. Track your expenses in an accounting software
If you have a lot of business travel, it may be helpful to track your expenses in an accounting software. This will help you stay organized and make it easier to prepare your taxes at the end of the year.
4. Keep a travel diary
Another way to keep track of your business travel expenses is to keep a travel diary. This can be a simple notebook that you carry with you, or you can use an app on your phone or tablet. Be sure to record the date, time, and purpose of your travel, as well as any expenses that you incur. This will be helpful if you need to provide documentation to the IRS.
5. Hire a professional
If you’re not sure if you’re accurately keeping track of your business travel expenses, reach out to us at Halter CPA. We can make sure that you’re tracking and documenting your expenses properly so that you can take all of the deductions that you’re entitled to.
With the new higher standard mileage rate, now is the time to get your travel records in order. By following these tips, you can be sure that you’re keeping accurate records of your expenses and maximizing your deductions. Hiring a professional to help can take the stress out of tax time, and we’re here to help.