recordkeeping

3 Rules to Simplify Your Recordkeeping for Business Travel

Author: TG Contributor
Date: 2020-01-22

Share using:



Summer is here and for many of us that means summer business trips. I love traveling for business. It usually means I'm on my way to speak at a seminar in a great location. But, my least favorite part about business trips 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 car and with all of these, I was still missing receipts!

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

Here's how my system for easy business travel recordkeeping works:

*Rule #1*

Use the Convenience and Leverage of Email

When my airfare is booked, the airline sends me an email automatically that has all the information I need for my receipt. I forward that email to my bookkeeper immediately upon receipt. That takes care of the airfare receipt.

When I check out from my hotel, I request to have a copy of my bill emailed to me. I forward that email to my bookkeeper immediately upon receipt. That takes care of my hotel receipt.

With my airfare and hotel receipt, I have the receipts for the majority of my actual expenses. But most of the receipts from my travel come from the other expenses, like meals, cab fare, cash 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 carry on bag. The first envelope I label with my destination, travel dates and "Meals." The other envelope I label with my destination, 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's such a simple system, but it works!

You may be wondering why I separate my meal receipts. There are 2 reasons I do this.

First, with my meal expenses separated, it makes it easier for my bookkeeper to code the expenses properly. My meal expenses are only 50% deductible, but the rest of my business travel is 100% deductible. Separating the two helps ensure 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 cash to pay for all of meals while traveling. I do this because it is the easiest way to make sure I maximize my business travel deductions.

Here's how I maximize my deduction:

When traveling on business, meal receipts are not required 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 instead of the actual expense.

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

I have trained my bookkeeper to compare the total of my actual meal receipts to the per diem allowed. My bookkeeper then determines which provides the greater deduction and records that in my bookkeeping.

For example, if my meal receipts total to $125 and the per diem totals to $200, then I can legitimately deduct $200 for meals. This is one of my favorite strategies because I have increased my business deductions without spending any additional cash!

Here's how I simplify the recordkeeping:

I mentioned that I use a personal credit card or personal cash for my meal expenses while traveling. I do this to make sure my business claims the larger of my actual expenses or the per diem allowed.

Once the greater of my actual meal expenses and per diem has been determined, my bookkeeper then completes an expense report that claims the greater amount. My business then reimburses me based on the expense report.

Worst case is I get reimbursed the exact amount I spent, but often timesScience Articles, I'm able to get reimbursed more than what I actually spent because the per diem rates are greater. This means my business gets a bigger deduction and my entire reimbursement (even if I am reimbursed more than what I actually spent) is tax free to me!

This is my favorite kind of system - it's simple and it maximizes my deductions!

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR

Tom Wheelwright is not only the founder and CEO of Provision, but he is the creative force behind Provision Wealth Strategists. In addition to his management responsibilities, Tom likes to coach clients on wealth, business, and tax strategies. Along with his frequent seminars on these strategies, Tom is an adjunct professor in the Masters of Tax program at Arizona State University. For more information please visit http://www.provisionwealth.com

By  TMWheelwright


No Comments

Trending Blogs

General Read More
Food of Sikkim
Leisure Read More
Know the best places to visit in North east India: Meghalaya and more
Adventure Rush Read More
Trekking in the lost kingdom of Mustang

Latest Blogs

Culture Read More
Hornbill Festival 2021– all you need to know
Adventure Rush Read More
Unplanned Road Trip to Bhalukpong, Arunachal Pradesh
Leisure Read More
Demystifying the homestay trend, my offbeat homestay experience
General Read More
Flavours of Sikkim
A call to all travel junkies
Share your amazing travel stories
&
inspire someone today!
Become a TOURGENIE contributor
Write for our blog
Want to explore more Activities?
Explore Activities
Dawki Adventure Camp-Meghalaya
Dawki Adventure Camp-Meghalaya
4 Days 3 Nights
Explore Activities
Trek Through Rural Mizoram
Trek Through Rural Mizoram
4 Days 3 Nights
Explore Activities
Tiger Hill Mountain Biking
Tiger Hill Mountain Biking
1 Days 0 Nights
PARTNERS
ADDRESS:
  • Near Co-Operative, Middle Sichey Gangtok, East Sikkim, India, 737101

    • booking@tourgenie.com
    • support@tourgenie.com