3 Rules to for Business Travel

Summer is here and for lots of of us that means summer business journeys. I am liking travelling for business. It usually means I am on my way to speak at a seminar in a great location. But, my least favourite part about business journeys is keeping track of all of my receipts.

I use to come home from a business trip and find my receipts in various places over the next several days (or weeks!). Some I would find in my wallet, others in my briefcase, more in my coat pocket, some in my automobile and with all of these, I was one time still missing receipts!

That was until I came up with my technique for simple business travel recordkeeping. This technique is so simple to make use of and it maximizes my business travel deductions.

Here’s how my technique for simple business travel recordkeeping works:

*Rule #1*

Use the Convenience and Leverage of E-mail
When my airfare is booked, the airline sends me an e-mail automatically that has all the information I require for my receipt. I forward that e-mail to my bookkeeper immediately on receipt. That takes care of the airfare receipt.

When I check out from my hotel, I request to have a replica of my bill emailed to me. I forward that e-mail to my bookkeeper immediately on receipt. That takes care of my hotel receipt.
With my airfare and hotel receipt, I have the receipts for all of my actual expenses. But most of the receipts from my travel come from the other expenses, like meals, cab fare, funds tips. Here is how I tackle those receipts.

*Rule #2*

Pack 2 Envelopes
Part of my packing for a business trip includes packing 2 envelopes in my carryover on bag. The first envelope I label with my location, travel dates and “Meals.” The other envelope I label with my location, travel dates and “Other.” Any time I get a receipt from a meal, it goes in the “Meal” envelope. Any time I get any other receipt, I put it in the “Other” envelope. After my trip, I give the envelopes to my bookkeeper to record my travel expenses.

It is such a simple technique, but it works!

You may be wondering why I separate my meal receipts. There’s 2 reasons I do this.
First, with my meal expenses separated, it makes it simpler for my bookkeeper to code the expenses properly. My meal expenses are only 50% deductible, but the remainder of my business travel is 100% deductible. Separating the five helps make positive that the expenses get coded to separate accounts so only my meals are subject to the 50% limit.

The second reason is so I can maximize my deductions. This is explained in Rule #3.

*Rule #3*

Use Per Diem
To maximize my business travel deductions, I separate my meal receipts AND I use a personal credit card or my personal funds to pay for all of meals while travelling. I do this because it is the simplest way to make positive I maximize my business travel deductions.

Here’s how I maximize my deduction:

When travelling on business, meal receipts are not necessary in order to deduct a meal expense. The IRS issues per diem rates for meals and these rates can be used for a meal deduction in lieu of the actual expense.

This means I can use either my actual meal expenses or I can use the per diem rates. Of coursework, I always pick the one that gives me the largest deduction!