travelling expenses is which type of expenses

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What Are Travel Expenses?

Understanding travel expenses, the bottom line.

• Deductions & Credits
• Tax Deductions

Travel Expenses Definition and Tax Deductible Categories

Michelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.

For tax purposes, travel expenses are costs associated with traveling to conduct business-related activities. Reasonable travel expenses can generally be deducted from taxable income by a company when its employees incur costs while traveling away from home specifically for business. That business can include conferences or meetings.

Key Takeaways

• Travel expenses are tax-deductible only if they were incurred to conduct business-related activities.
• Only ordinary and necessary travel expenses are deductible; expenses that are deemed unreasonable, lavish, or extravagant are not deductible.
• The IRS considers employees to be traveling if their business obligations require them to be away from their "tax home” substantially longer than an ordinary day's work.
• Examples of deductible travel expenses include airfare, lodging, transportation services, meals and tips, and the use of communications devices.

Travel expenses incurred while on an indefinite work assignment that lasts more than one year are not deductible for tax purposes.

The Internal Revenue Service (IRS) considers employees to be traveling if their business obligations require them to be away from their "tax home" (the area where their main place of business is located) for substantially longer than an ordinary workday, and they need to get sleep or rest to meet the demands of their work while away.

Well-organized records—such as receipts, canceled checks, and other documents that support a deduction—can help you get reimbursed by your employer and can help your employer prepare tax returns. Examples of travel expenses can include:

• Airfare and lodging for the express purpose of conducting business away from home
• Transportation services such as taxis, buses, or trains to the airport or to and around the travel destination
• The cost of meals and tips, dry cleaning service for clothes, and the cost of business calls during business travel
• The cost of computer rental and other communications devices while on the business trip

Travel expenses do not include regular commuting costs.

Individual wage earners can no longer deduct unreimbursed business expenses. That deduction was one of many eliminated by the Tax Cuts and Jobs Act of 2017.

While many travel expenses can be deducted by businesses, those that are deemed unreasonable, lavish, or extravagant, or expenditures for personal purposes, may be excluded.

Types of Travel Expenses

Types of travel expenses can include:

• Personal vehicle expenses
• Taxi or rideshare expenses
• Airfare, train fare, or ferry fees
• Laundry and dry cleaning
• Business meals
• Business calls
• Shipment costs for work-related materials
• Some equipment rentals, such as computers or trailers

The use of a personal vehicle in conjunction with a business trip, including actual mileage, tolls, and parking fees, can be included as a travel expense. The cost of using rental vehicles can also be counted as a travel expense, though only for the business-use portion of the trip. For instance, if in the course of a business trip, you visited a family member or acquaintance, the cost of driving from the hotel to visit them would not qualify for travel expense deductions .

The IRS allows other types of ordinary and necessary expenses to be treated as related to business travel for deduction purposes. Such expenses can include transport to and from a business meal, the hiring of a public stenographer, payment for computer rental fees related to the trip, and the shipment of luggage and display materials used for business presentations.

Travel expenses can also include operating and maintaining a house trailer as part of the business trip.

Can I Deduct My Business Travel Expenses?

Business travel expenses can no longer be deducted by individuals.

If you are self-employed or operate your own business, you can deduct those "ordinary and necessary" business expenses from your return.

If you work for a company and are reimbursed for the costs of your business travel , your employer will deduct those costs at tax time.

Do I Need Receipts for Travel Expenses?

Yes. Whether you're an employee claiming reimbursement from an employer or a business owner claiming a tax deduction, you need to prepare to prove your expenditures. Keep a running log of your expenses and file away the receipts as backup.

What Are Reasonable Travel Expenses?

Reasonable travel expenses, from the viewpoint of an employer or the IRS, would include transportation to and from the business destination, accommodation costs, and meal costs. Certainly, business supplies and equipment necessary to do the job away from home are reasonable. Taxis or Ubers taken during the business trip are reasonable.

Unreasonable is a judgment call. The boss or the IRS might well frown upon a bill for a hotel suite instead of a room, or a sports car rental instead of a sedan.

Individual taxpayers need no longer fret over recordkeeping for unreimbursed travel expenses. They're no longer tax deductible by individuals, at least until 2025 when the provisions in the latest tax reform package are due to expire or be extended.

If you are self-employed or own your own business, you should keep records of your business travel expenses so that you can deduct them properly.

Internal Revenue Service. " Topic No. 511, Business Travel Expenses ."

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 13.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Page 7.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Pages 6-7, 13-14.

Internal Revenue Service. " Publication 463, Travel, Gift, and Car Expenses ," Page 4.

Internal Revenue Service. " Publication 5307, Tax Reform Basics for Individuals and Families ," Pages 5, 7.

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Everything you need to know about travel expenses

Everything You Need to Know About Travel Expenses

Did you know that the average three-day domestic trip costs between $990-$1,293 ? That's a lot of money and can add up quickly if you're not careful. In this article, we're going to look at some of the most common travel expenses and how to save money on them. We'll also discuss some tax deductions that may be available to you. So let's get started!

What counts as a travel expense?

Travel expenses can add up quickly, so it's important to be aware of what does and does not count as business-related travel expenses.

So, what exactly is a business-related travel expense? The IRS defines it as "an expense incurred while away from home on business." This includes things like travel to and from meetings, conferences, and business-related events. It can also include expenses related to lodging, meals, and transportation.

Costs that occur while you're traveling away from home for business purposes, such as airfare or mileage, hotel expenses, and food, can all be considered business-related travel expenses. However, personal expenses, such as new shoes or clothing, do not count as business-related travel expenses, even if you purchase them while traveling. Keep this in mind when budgeting for your next business trip to make sure you include all relevant expenses.

Types of Travel Expenses

There are several different types of travel expenses, and it's important to understand what each one is before you start planning your trip. This way, you can include all relevant costs in your budget.

Accommodations and Lodging

One of the most common travel expenses is accommodations and lodging. This can include anything from a hotel room to an Airbnb rental. If you need to pay for overnight accommodations on a work trip, whether that's a hotel or other type of lodging, it counts as a travel expense. Of course, your lodging costs have to be within reason, so don't expect to be able to deduct a luxurious resort.

Transportation

Another common travel expense is transportation. This includes things like airfare, train tickets, taxis, and rental cars. However, it's important that depending on your mode of transportation, the things you can deduct as travel expenses may vary. For example, if you're renting a car, you can deduct the cost of gas as a travel expense, or if you're using your vehicle, you can deduct your mileage at the standard mileage rate. For 2022, that rate is 62.5 cents per mile.

Airfare Is also considered a travel expense. However, if you pay for your flight with frequent flier miles or other rewards points, or if a client provides your ticket, you cannot write off airfare as a travel expense. 

Food and Meals

One of the common questions people have about travel expenses is whether or not they can deduct food and meals. And the answer is, it depends. If you're on a business trip that lasts longer than a day, you can deduct 50 percent of the cost of your meals as a travel expense. However, if your trip is less than 24 hours, you can't deduct any of your meal expenses.  

Miscellaneous Travel Expenses

There are also a few other miscellaneous travel expenses that you may incur while on a business trip. These can include things like laundry, tips, business-related communication, and shipping and handling of luggage or work-related materials. As with food and meals, these expenses can only be deducted if your trip lasts longer than a day.

Travel Expenses You Can't Write Off

There are many different types of travel expenses that can be written off on your taxes, but there are also some that you cannot. It's important to be aware of both so that you can accurately calculate your tax bill. Here are examples of travel expenses you CAN NOT deduct.

Entertainment

One type of travel expense that you can not deduct is entertainment. This includes things like tickets to a show or a ball game, golf fees, and other recreational activities. Even if you're entertaining a potential client or business associate, you can not deduct the cost as a business expense.

Traveling with family and friends

If you're traveling with family or friends, the IRS doesn't allow any of their travel expenses to be deducted. However, you might be able to deduct some expenses if you can prove that the trip was for business purposes and that your family members or friends were acting as employees or contractors.

Lavish and extravagant expenses

The IRS also does not allow any extravagant expenses to be deducted as travel expenses. This includes things like first-class airfare, luxury hotels, or expensive meals. If you're not sure whether or not an expense is considered lavish or extravagant, the IRS says that it's "an expense isn't considered lavish or extravagant if it's reasonable based on facts or circumstances."

Travel that is compensated

If you're compensated for your travel, whether that's through reimbursement or a per diem, you can not deduct those expenses as business travel expenses. This includes things like airfare, lodging, and meals. The only exception to this rule is if you're an employee of a church or a qualified non-profit organization and you're traveling on behalf of the organization.

Personal vacations

Last but not least, you can not deduct any expenses for personal vacations. Even if you do some work while you're on vacation, like checking your email or attending a business meeting, you can not deduct any of those expenses.

How to manage the travel expenses for your business

Now that you know what types of travel expenses can be deducted, it's time to learn how to manage them. 

Step 1: Decide the payment method

The first step is to decide how the travel expenses will be paid. You can either ask the employee to pay upfront and then be reimbursed, or you can pay the expenses directly from a company bank account or company credit card.  

For many businesses, the simplest way to handle expenses is to ask employees to pay for them out of their own pockets and then submit expense claims for reimbursement. However, this can be a time-consuming process for both administrators and staff because expense reports need to be filled out and submitted, and then the claims need to be reviewed and processed.

However, with Ontheclock Employee App , the employees can submit their r eceipts electronically , and administrators approve the claims quickly. This saves everyone valuable time in managing this process!

Step 2: Set out a clear process for expense submission

The next step is to set out a straightforward process for employees to follow when submitting expenses. This will help to ensure that all the necessary information is included and will make it easier for you to process the claims.

To do this, you can create an expense policy that outlines what types of expenses are eligible for reimbursement and how employees should go about submitting their claims. For example, you might require employees to submit original receipts or to submit their claims within a specific timeframe.

Step 3: Communicate the expense policy

Travel expenses can be a minefield for companies, and many struggle to strike the right balance between keeping costs down and making sure employees are comfortable on business trips. It's well known that many companies have strict rules around expenses and that employees often try to find ways to get around them. This can leave the business in a difficult situation, as they may either have to pay the bill or leave the employee out of pocket. The best way to avoid this is to make sure that you have a clear and concise policy in place and that all employees are familiar with it. By doing so, you can minimize the risk of expenses spiraling out of control and ensure that everyone is happy with the arrangements.

Some ways to ensure that employees know and understand the expense policy are to:

• Send out the policy in a company-wide email every quarter
• Talk about it at all-hands meetings
• Post it on the company intranet
• Provide training on the policy when new employees join the company

How to calculate and track business travel expenses

When it comes to business travel, Admins and those in expense management are always looking for ways to make the process more efficient and cost-effective. Fortunately, there are a few simple steps that can make a big difference when it comes time to report on quarterly or yearly travel spending.

Keep track of all travel expenses

The first step is to make sure that all travel expenses are being tracked. This can be done using a variety of methods, such as expense reports, credit card statements, or receipts.

Classify expenses by type

Once all of the expenses have been collected, they can then be classified by type. This will make it easier to see where the majority of the spending is taking place and will help to identify any areas where costs could be reduced.

Calculate the total cost of travel

The next step is to calculate the total cost of travel. This can be done by adding up all of the expenses for each trip or by using a software program that will automatically calculate the total cost based on the information that is entered.

Track spending over time

Once the total cost of travel has been calculated, it is then possible to track spending over time. This can be done by creating a spreadsheet or using software that will allow you to track spending on a monthly or quarterly basis.

Compare spending to budget

The final step is to compare the total travel spending to the budget that was set at the beginning of the year. This will help to identify any areas where spending is exceeding the budget and will allow for corrective action to be taken.

By following these steps, Admins and those in expense management will be able to track and report on business travel expenses more effectively. This will ultimately lead to a better understanding of where the company's money is being spent and will help to identify areas where costs can be reduced.

How to reduce travel expenses for small businesses

• Use public transportation

When possible, use public transportation instead of renting a car. This can be a great way to save money, as well as avoiding the hassle of dealing with parking and traffic.

• Book in advance

Another way to save money on business travel is to book your flights and hotel rooms in advance. This will allow you to take advantage of early-bird discounts and will ensure that you get the best possible rates.

• Stay in budget hotels

There is no need to stay in a luxury hotel when traveling for business. There are many budget-friendly options that will still provide a comfortable place to stay.

• Save on entertainment expenses

When it comes to entertainment, there are many free or low-cost options available. Instead of going to a fancy restaurant or bar, consider going for a walk or exploring the local area.

By taking a few simple steps, it is possible to save money on business travel without compromising the quality of the trip. By using public transportation, booking in advance, and staying in budget hotels, small businesses can save money on travel expenses. Additionally, bringing your own food and saving on entertainment expenses can help to further reduce the cost of business travel. Finally, don't forget to recover the tax on your business travel expenses!

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Travel and Expense Management 101

When it comes to managing your travel expenses, the focus should not be on cutting down, but rather on maximizing the funds available. 

In this guide, we’ll cover the best ways you can optimize costs and enhance compliance in travel and expense (T&E) management, and in turn enable you to achieve greater financial control. 

After all, travel should be seen as an investment. We’re here to help you get the most out of it. 

What is travel expense management? 

The short answer: T&E management controls costs and makes travel more convenient for employees by maintaining expenses and reporting on travel behaviors. 

More accurately, its an umbrella term that encompasses various responsibilities aimed at overseeing and optimizing travel spend, such as by: 

• Aligning company goals to business travel 
• Creating and enforcing corporate travel policies 
• Tracking and analyzing expenses 
• Building approval processes for travel requests 
• Ensuring the safety and satisfaction of travelers 
• Measuring how much profit yields from travel-related investments 
• Establishing the reimbursement process 
• Employee expenses reimbursement 

It also involves the crucial task of documenting and processing business travel expenses for tax deduction purposes. What is and isn’t considered a tax deductible expense varies by the country your organization is based in. Regardless of locale, it is essential to report all eligible expenses to optimize and lower tax liability. 

What are the types of travel expenses? 

Now that we’ve covered the importance of travel expense management, let's explore the most common  travel expenses categories  that businesses of all sizes should encounter. By understanding these categories, you can identify how to claim tax relief and optimize your overall spending. 

Transportation 

In addition to airfare, transportation expenses include fares incurred while traveling to and from business-related events (i.e., shuttles, buses, trains, taxis, and ride-sharing services). Employees who rent or use their own car during business trips can also submit expense claims for mileage deductions based on standard mileage rates, which varies by country. 

Accommodations 

Any costs related to overnight lodging, such as hotel stays or alternative accommodations, are considered travel expenses. Of course, lodging costs do need to be within reason, or at least justifiable in case of an audit. So unless you’re accommodating for a company-wide retreat, don’t expect to be able to claim a 5-star resort stay! 

The IRS states that meals are a deductible travel expense when you’re away from home for longer than an ordinary workday and it’s necessary to stop somewhere to sleep. So multi-day trips are clearly applicable, but if you’re on a half-day trip to the next town over, it probably doesn’t count. Generally, you can deduct about 50% of the cost of a meal while traveling away from work. 

Misc. Spending 

While transportation, airfare, lodging, and food are the most common travel expenses, they’re far from the only ones. Be sure not to overlook these costs and more: 

• Shipping and handling costs for luggage or work-related materials 
• Electronics and other essential gear 
• Parking fees 
• Laundry and dry-cleaning 
•  Business related communication (international calls, faxing, etc.) 
• Tips on work-related services 

How do you manage travel costs? 

Ready to effectively manage your corporate travel spend? Well, you’re going to need a game plan and a whole lot of tools. Here’s our top tips for managing business travel costs: 

Level the spending field 

When it comes to creating travel spend guidelines, it’s best to apply the same rules across your entire workforce. When your travel spend policy is consistent at every level of your business, you help maintain transparency and avoid any potential misunderstandings that could lead to unintentional, but costly, out-of-policy travel bookings. 

Plus, no one likes to feel like they’re getting the short end of the stick. If you give managers and high-level administrators significantly more spending allowance and flexibility on travel and expenses than other team members – especially when booking the same trip – be prepared for some pushback. 

Drive compliance with a people-first policy 

It's not uncommon for employees to veer from policy from time to time. But while some companies may be quick to wield the disciplinary stick, travel policy adherence doesn't have to be a battle. Instead, a more effective approach is often to identify the reasons behind traveler noncompliance and launch initiatives to foster a culture of support. 

It might also be worth considering how you can adjust the policy itself to cater to their needs while still saving money. 

By finding the right balance and working with your people, you can drive traveler compliance and provide travel spend management that is both cost-effective and employee-friendly. It's all about finding creative solutions that benefit everyone involved. 

Real-time data for real-time results 

Data is the beacon of light guiding organizations toward smart decision making – but to make it work, you’ll need the right technology. 

By supporting your corporate travel management with  expense management software , you unlock the insights hidden within your spending data. With just a few clicks, you can uncover trends in spend and identify what you're getting in return. Benchmarking and forecasting functions take it a step further, allowing you to identify potential savings and efficiencies. 

Plus, by consolidating data from various platforms, you'll have a live view of your travel expenses, empowering you to make smarter financial decisions at the highest levels of your company’s future spend and travel preferences. 

Let automation do the heavy lifting 

With automation on your side, you can say goodbye to financial headaches and wasted hours spent on a manual expense reporting process, and welcome efficiency into your daily routines. By automating expense reporting with advanced technology solutions, you can safeguard your finances, detect program leakage, and seize missed savings opportunities. 

 A cutting-edge custom dashboard like the  FCM Platform  seamlessly integrates compliance and expense information, giving you a comprehensive view of travel expenses and enabling your traveling employees toward informed decision-making. It's like having a personal assistant who always has your back, keeping your finances in check while you focus on the things that truly matter: your business. 

Now put it to action

The secret’s out on efficient travel and expense management. A well-written travel policy coupled with all-in-one, proprietary technology is the key you need for a cost-effective, people-first travel management program. 

But easier said than done, right? 

Don’t stress just yet. FCM is here to help – and lucky for you, we’ve done this before. A lot. 

Let's Talk!

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Audit and Accounting Solutions

Travelling Expenses – Meaning, Examples and Journal Entries

March 17, 2022 Runner

The name itself indicates that this travelling expense relates to expenses incurred for travel by entity employees or directors. The purpose of travel shall be connecting to the entity’s business operations. Therefore, the purpose shall not be of personal nature.

Estimated reading time: 5 minutes

Travelling expenses Examples:

Let’s see a couple of instances relating to travelling expenses

• Directors Cost of travel to other City to attend some business meeting or Client meeting
• Cab Expenses (Local Travel)
• Air Fare and insurance charges, if any relating to the business travel
• Expenses incurred for the Meals, Communication charges and WIFI Charges
• Tips or Surcharge paid for using any of the above facilities as part of travel
• Parking Fees, Toll Charges, Cab Waiting Charges and Luggage Porter Charges

What’s the Journal Entry?

Travelling expenses is a Nominal Account that flows into the Profit and Loss A/c. As this GL is an expenditure Account, the appropriate accounting treatment is to debit this GL Account in the Journal Entry .

Let’s see what’s the corresponding Credit.

Credit is for the Liability Account. Here Liability Account is named Cab Charges Payable, Travel Charges Payable etc., based on the nature of the liability.

There might be instances where there is no requirement to recognize the liability like Meals, tips, parking fees etc. These expenditures are paid immediately, and there might not be any bills or invoices. So, the Credit, in this case, is the Cash A/c.

Journal Entry for recording the Travelling expenses:

(Being the travel charges incurred for ABC Manufacturing deal)

(Being the travel charges paid)

Frequently Asked Questions

1) are the travelling expenses of a salesman forms part of direct or indirect expenses.

The category of expenses depends on the nature of the entity’s business.

For Entities exclusively into the Marketing/Product Sales (not manufacturing), the Travel expense of a Salesman is a direct expense. That’s because those expenditures drive the business operations of the entity.

For Entities not falling into the above category, those travel expenses fall into the Marketing Expenses category, which is an indirect expense. Therefore, it depends on the business category in which the entity operates.

2) What does Accommodation expenses mean?

Accommodation Expenses are the expenses relating to hotel or motel stay. These expenses include the Food, Laundry Service, Telephone, Internet expenses, GST and Service Charges. So, these Accommodation expenses are part of travel expenses. Therefore, it qualifies for indirect business expenditure.

The thumb rule here is to check whether the accommodation expenses shall be relatable to the business operations. So, emphasis shall be given to business importance of the expenses.

3) Paid for travelling expenses journal entry:

Paid for Travelling expenses journal entry records the cash/bank payment done for the travel and related expenses incurred for the business purpose. Let’s see the nature of accounts and accounting rules applicable.

Accounts Involved – Travelling expense and Bank Account

Nature of Accounts –

Travelling Expenses is a Nominal A/c – Expenditure and Bank Account is Real A/c – Asset

Accounting Rules:

The Golden rules of accounting applicable in this scenario are below.

Nominal Account: Debit the expenses and Losses Credit the gains and incomes and

Real Account – Debit what comes in and Credit what goes out

Paid for travelling expenses journal entry is

Travelling expenses A/c Dr

To Bank A/c

4) Travelling expenses are debited to which GL account?

There are no rules for the Naming of an Account. The GL Description shall depict the nature of the Account. For example, if the GL relates to telephone expenses, it shall not fall into conveyance expenses. Therefore, the travelling expenses GL is used as a debit to record the travel expenses in general.

Conclusion:

Travelling expenses are the expenses incurred in relation to business travel . The purpose shall not be in a personal nature. The thumb rules are to check if those expenses help further business operations. This travel expenses category is wide enough to cover the accommodation charges, telephone, internet charges, ancillary charges incurred along with the hotel expenditure.

Debit the Travelling expense and Credit the Bank Account to record the Journal Entry. If the transaction happens on a credit basis, two entries are recorded. The first one is to debit the travelling expense, and the Credit is to the Liability Account. The second entry is to debit the Liability account and Credit the bank account. The net effect is knocking off the Liability Credit in the first entry and the Liability debit in the second. So, technically the journal entry is the same as the first scenario. It’s just deferment of recording the complete transaction effect.

Hope this article brings some clarity on the travelling expenses concept. If you have any questions then pls let us know through the comments below.

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Travel expenses.

Travel expenses refer to the costs incurred by an individual or business for travelling purposes. These expenses can include items such as flights, accommodation, meals, and transportation. They can be reimbursed by employers and may also be tax-deductible, depending on the purpose of the travel.

The phonetic pronunciation of “Travel Expenses” is: /ˈtrævəl ɪkˈspɛnsɪz/

Key Takeaways

• Keep receipts – It’s crucial to keep track of all the receipts during your travel. They provide proof of your travel expenses, and are particularly necessary when it comes to claiming expenses back at your work or during tax return filing.
• Understand what counts as a travel expense – Not everything during your travel can be claimed as an expense. Travel expenses typically include transportation, meals, accommodation and other expenses directly related to your travel. Understanding what can count as a travel expense can effectively control your travel costs.
• Use a travel expense app – There are numerous apps available to keep track of your travel expenses. These can simplify the process, allow you to quickly add new expenses, and even scan and save your receipts. They can save you valuable time and ensure that you are reimbursed completely and promptly.

Travel expenses are a critical business/finance term since they represent the costs incurred by employees while on business-related trips. This includes expenses for transportation, meals, lodging, and other incidentals. Travel expenses are important for several reasons. Firstly, they can significantly impact a company’s budget and financial planning, given their potential size depending on the size and globalization of the business. Secondly, reimbursing travel expenses is a way for businesses to maintain employee satisfaction and morale, as it secures employees from out-of-pocket expenses incurred during the conduct of business operations. Thirdly, accurate recording and control of travel expenses are essential for tax purposes, as certain travel expenses are tax-deductible. Thus, travel expenses strike a delicate balance between operational needs, employee satisfaction, financial management, and tax compliance.

Explanation

Travel expenses serve a crucial role in many businesses, specifically those whose operations necessitate travel. Whether the task is attending a conference, meeting prospective clients, or visiting a remote company branch, work-related travel comes with associated costs that companies should cover. From an accounting and business perspective, these expenses are considered legitimate operational costs that contribute to earning income. The application of travel expenses is often governed by company policy or tax regulation standards, and encompasses a variety of items. This could include transportation (airfare, mileage, taxi fees), lodging (hotels, motels), meals (either per diem or actual cost), and incidental expenditures that a worker incurs as a consequence of the business travel. By covering these expenses, companies not only encourage employee participation in activities beneficial to the business, but they also foster good employer-employee relations, enhance company morale, and support in attracting or retaining talented personnel. As part of a tax strategy, some companies even leverage the deductibility of these expenses to lessen their tax liability.

1. Business Trip: If an employee is sent for a business trip to another city, the company usually covers all associated costs such as flights, accommodation, food, transportation, and any other incidental costs. This is considered as a travel expense since all expenses were incurred while travelling for business purposes.2. Client Meetings: If there is a need for a face-to-face meeting with a client located in another city or country, the company would cover the expenses for the trip which could include costs of plane or train tickets, gas, meals, hotel stay, and more depending on the situation. 3. Conferences or Training: Often, companies send their employees to conferences or training sessions in different locations. The costs for these such as enrolling in these conferences or training sessions, travelling to the event (airfare or mileage), hotel stays, meals, etc. are all considered as part of travel expenses.

Frequently Asked Questions(FAQ)

Travel expenses are costs related to travels which are undertaken specifically for business purposes. These could include airfare, accommodations, meals, taxi fares, and other expenses incurred while on a business trip.

In most cases, businesses can deduct travel expenses on their taxes, as long as these expenses are business-related. However, the rules can be different depending on your country, so you should check with a tax professional for accurate information.

There are different ways to track travel expenses such as manual logging, using a spreadsheet, or using apps and software designed specifically for tracking business expenses.

Airfare, accommodation, meal costs, transportation within the destination (like taxis, car rentals, or public transit), tips, and business calls can be considered travel expenses. Some less common travel expenses could include laundry services or shipping fees.

Companies usually have a travel policy in place which includes instructions on how employees should record and submit their travel expenses for reimbursement. This can involve filling out forms and providing receipts.

If travel expenses are not reported correctly, you might not get reimbursed for those costs, or could face penalties in case of a tax audit. For businesses, incorrect reporting can lead to potential financial issues or legal consequences.

Small businesses can best manage travel expenses by creating a clear and concise travel policy, using a business credit card for expenditures, and making use of modern expense tracking tools and software.

Per diems are specific amounts of money that a company provides to an employee per day to cover travel-related expenses. They are often used instead of having the employee track each specific expense.

Typically, personal expenses cannot be included in travel expenses for business trips. However, some exceptions might be made, such as if the personal expense was reasonable and necessary for the business trip.

Related Finance Terms

• Reimbursement Policy
• Expense Report
• Business Mileage
• Receipt Validation

Sources for More Information

• Investopedia
• Internal Revenue Service (IRS)
• Accounting Tools

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The Ultimate Business Travel Policy for Streamlining Business Travel Expenses

Why are T&E policies so tricky? It’s because:

• Policies are usually extreme:  They’re draconian and cost-conscious, or unmanaged and expensive.
• The stakes are high:  Travel, payments, and expenses are often a company’s second largest expense.
• They’re regularly audited:  The Finance team is under enormous pressure to track costs each month, and record receipts for auditing and taxation.

This post provides a comprehensive guide to streamlining business travel expenses.

>> Related:  A Step-by-Step Business Expense Template <<

Understanding Business Travel Expenses

There are generally four business expense types, all of which should be budgeted and quickly reimbursed.

Types of Expenses

• Transportation : This is the cost incurred to get from the employee’s home or office location to the destination and back. This might include flights, trains, rental cars, taxis, rideshares, mileage, or tolls.
• Accommodation : The cost of staying in a hotel or other type of lodging while traveling for business. It could also include fees associated with short-term rentals such as Airbnb.  Key services like laundry or gym access may also be included.
• Meals : Meals typically make up nearly 20% of business travel expenses.  They include meals at restaurants or ingredients from grocery stores.  Most companies carefully restrict meals, including maximum per-person limits, tip rates, internal vs. client meals, and alcohol.
• Miscellaneous : This includes any remaining costs, including WIFI access, meeting room rentals, conference passes, currency exchange rates, insurance, etc.

With the ease and low cost of virtual meetings, and with airfares rising 5x faster than the overall inflation rate ( source ), in-person meetings are now reserved for high-value activities like rebuilding relationships, collaborative planning, and fortifying teamwork and community.  There is simply no tolerance for, “this trip could have been a Zoom call.” To anticipate ROI, balance both the trip’s expected costs and outcomes.  If you had pre-pandemic travel budgets, assume you’ll need at least 30% more budget for the same trip in 2023.

Reimbursement Procedures

Reimbursements are extremely important for employees, because people like to get their money back as soon as humanly possible. Some companies even offer prepaid cards or corporate cards so that spending doesn’t come out of employees’ personal accounts. Make sure your policy outlines the reimbursement process and turnaround times. Also, highlight if reimbursements will be in the form of a paper check or sent via direct deposit. If you have automated processes via  expense management technology , employees will be thrilled that reimbursements can be processed and direct deposited in as little as 24-hours.

Creating a Comprehensive Business Travel Expense Policy

Business travel policies have to be comprehensive, flexible, and clearly-communicated.  When creating or revamping a policy, begin with collaboration across stakeholders:

• Finance/Ops : Controlling costs, predictability, and visibility are all top of mind. Pre-trip budgets are a huge help with forecasting, along with timely and accurate data for reporting.
• Human Resources : Employee satisfaction is a major driver, and a flexible travel policy is a big draw for talent acquisition. With the ubiquity of open bookings, they need to know where travelers are to maintain a Duty of Care standard.
• Travelers : Almost 40% of frequent business travelers said convenience was the most important benefit in a travel policy, followed by cost. And since many are loyal to specific carriers and want to maintain status or earn points, a solid selection of travel partners is critical.

>> Related:   The Most Common Challenges of T&E Management <<

Defining Clear Guidelines For Employees

The business travel policy should clearly state employees’ responsibilities. This may include ensuring that all required documentation is completed prior to the start of a trip (such as flight reservations and hotel arrangements), adhering to the maximum daily allowances set by the company, notifying management of any changes in plans during travel, etc. In your policy, be sure to cover if all line items require or receipt, or if only purchases over a certain dollar amount need documentation. You should also specify expense report due dates — usually within 90 days of an expense or on a monthly basis. Once you have guidelines in place, don’t assume your policy to be widely used if it’s a PDF on the shared drive!   Instead, consider a modern travel management platform that supports in-app policy parameters, so employees can easily search for flights and accommodation that meet your requirements, and receive guidance as they’re booking.

Determining [Un]Acceptable Expenses

• What are the goals for implementing limits?  What will improve across cost savings, reporting, and adherence?
• Don’t be vague — employees’ varied backgrounds and values can lead to drastically different interpretations.
• Provide real-world examples of allowable and non-allowable expenses.  What travel and expense scenarios apply most frequently for your business?
• Keep it short — the longer and more nuanced your document, the more likely employees are to skim over it or ignore it all together.
• Consider quality of life for travelers.  For example, a flight may be $30 cheaper but require two layovers or a red-eye.
• Can you responsibly encourage work/life balance, and set boundaries around [inevitable] bleisure travel?
• Beware getting too granular or rigid. A 50% tip on a $3 coffee is neither fraudulent nor wasteful.

Ready to get specific?   Download: TravelBank’s sample business travel policy >

Consider Employee Engagement

Adoption is easier said than done.  Can you shape your new policy to boost engagement?  Here are some examples:

• Keep some savings: If employees book under budget, some employers reward this frugality by splitting the savings. An expense management solution that offers this feature makes it easier to offer this perk. ( On average, we see businesses trim 30% of their travel budget after implementing rewards .)
• Get reimbursed faster: Manually completing expense reports, sorting and attaching receipts, and submitting can be a lengthy process. If your new expense policy includes following an automated, digital system, employees can knock out expense reports in minutes and get reimbursed faster.
• Save time and hassle on expense reporting : In psychology, “negative reinforcement” means encouraging a behavior by removing something unpleasant (e.g., if a pill makes your headache go away, you’re more likely to take a pill next time, too). Making expense reporting quick and simple makes everyone’s day a little bit easier.

>> Related: The Importance of Well-Defined Travel and Expense Policies for Businesses <<

Implementing the Policy 

Writing a clear policy that aligns to your corporate culture is… actually the easy part.  Good data begins with your employees.  It’s imperative they understand the policy and can easily adopt it.

Train and support employees

• Establish a generous schedule:  Pad your timeline so you can thoroughly field questions and help employees adapt to the change curve.  Some departments might need an extra grace period if they’re working through a crunch period. Once carefully considered, communicate a hard deadline to get everyone onto the new policy.
• Hold a live training meeting.  The immediate feedback and questions can help you fine-tune your policy for better clarity.
• Record a short training video as a resource, especially for new employees.
• Train one department at a time, starting with departments processing highest volumes of expenses.
• Train department heads and supervisors, and listen to their advice on the best way to train their team.
• Offer support: whether it’s office hours, a dedicated Slack channel, or a hotline, be clear about who employees can field questions to.
• Make rewards clear: Usually travel expense policy goals revolve around reducing expense processing costs, improving productivity, preventing fraud, and aiding compliance. Employees may connect with these goals, but rewards and fast reimbursement will likely capture their attention.

Incorporate Technology

Asking employees to memorize every finite policy, and hand-entering data in spreadsheets, is a recipe for non-compliance.  Expense tracking software makes it easier for employees to capture and submit receipts.  It eases frustration, automatically routes approvals, and lessens the burden on Finance and employees alike. When evaluating expense tracking technology, look for:

• Mobile and desktop apps: Mobile apps are a must for travelers in the field, and expense reports should get the desktop treatment they need.
• Intuitive UX: A good tool inspires confidence through its usability. If travelers enjoy using it, they’re more likely to be compliant.
• Saving incentives: More carrot, less stick. Rewarding employees who beat their estimates means travelers get what they want and stay within budget.
• Support: 24/7 travel support lets business travelers focus on getting the job done instead of sweating the small stuff.

Regularly Review and Update Your policy

Review and adjust your policy every year, or when corporate or world events necessitate it.  Re-engage your collaborative stakeholders, and ensure your staff is engaged, feels heard, and gets needs met.

Streamlining business travel expenses begins with a flexible policy that’s easy for employees to adopt. Rewards, in-app policy parameters, simple UX, and swift reimbursement all help drive compliance.

>> Download TravelBank’s Travel Policy template <<

• Why have a travel and expense policy? – Travel, payments, and expenses are often a company’s second largest expense.  Business travel policies that are comprehensive, flexible, and clearly-communicated reduce expense processing costs, improve productivity, prevent fraud, and aid compliance.
• What expenses are included in a business trip? – [Un]acceptable expenses vary by business.  Generally they cover transportation (flights, trains, rental cars, taxis, ride shares, mileage, or tolls); accommodations (hotels or short-term rentals such as Airbnb); meals (restaurants, grocery stores, client entertainment ); and other miscellaneous costs incurred while doing business (WIFI access, meeting room rentals, conference passes, currency exchange rates, etc.).
• What is reimbursement of traveling expenses? – Reimbursements refund employees for expenses made while traveling. They are either in the form of a paper check or sent via direct deposit.  Companies increasingly provide prepaid cards or corporate cards so that spending doesn’t come out of employees’ personal accounts.

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Travel Expense Types

This Knowledge Base Article serves as a reference Travel Expense Types in Concur. 

Essential Information

• Travel Expenses are reimbursable when they are necessary to accomplish the official business purpose of a trip.
• Please note, most Expense Types require a receipt if the Expense is over $75 (there may be cases where a receipt is always required).
• Concur should prompt an alert if any receipts are missing. 
• Check the travel policy and this Blink page for more information to ensure that all Travel Requests and Travel Expense Reports are following policy requirements. 

   1. Air Travel Expense

Airline Fees : Baggage Fees, Change Fees, other fees imposed by Airlines.

   2. Lodging Expenses

Homeshare - AirBnB / VRBO / Etc: Be sure to attach final receipt for proof of payment.

Hotel : All Hotel lodging Expenses must be itemized.

Hotel - Advanced Deposit

Hotel Group : Use this Expense Type for Group Trips, content will be developed soon on this process.

Other Accommodations : Alternate accommodations not covered in the other Expense Types, e.g., rent payments for long-term travel.

Travel Card Per Diem Offset : Used when a foreign transaction has been charged to the T&E card and there is a need to claim the transaction and Offset/Reduce the Per Diem, or Travel Allowance.

   3. Ground Transportation

Car Rental Fuel

Parking : Only while on travel status - does not include monthly parking permit costs.

Taxi/Shuttle/Car Service

Tolls/Road Charges

University Vehicle Fuel

   4. Personal Car Mileage

Personal Car/Business Use - Mileage : Please refer to Blink for the latest mileage rates for travel. 

Personal Car/Moving Use - Mileage : Please refer to Blink for the latest mileage rates for moves.

   5. Meals/Meetings/Events

Entertainment Meals - Travel Status : If someone is on Travel status and they have a meeting, they are allowed to claim the Entertainment Meal Expense on a Travel Expense Report for Meal Expenses incurred while on travel status, they can be claimed on the Travel Expense Report in accordance with Entertainment Policy (BUS-79).

Group Meals and Incidentals : Use this Expense Type for Group trips.

Meals & Incidentals

Per Diem Reduction

   6. Conference/Training Registration

Seminar/Conference Registration

   7. Other Expenses

Agent Booking or Service Fees : Fees from Balboa Travel can be claimed with this Expense Type.

Field Expenses

Fraudulent Charge

Internet Access

Miscellaneous (Add Comment)

Mobile/Cellular Phone

Office Supplies

Personal/Non-reimbursable

Printing/Photocopying

Team Laundry (Athletics Only)

Wire Payments Form : This is related to Travel Expense Reports that will be paid via Wire, see the KB0032371: How to Process a Travel Wire for more information.

   8. Dues & Fees

Bank/Currency Fees

Medical Fees

Passports/Visa Fees - ordinary and necessary to accomplish the official business purpose of a trip; the Travel Expense entry must include an explanation of why such Expenditures are being claimed.

   9. Moves/Relocation

Moving Company Invoice : Please see the KB0032130: How to Manage a Move Trip for more details on this process.

If you need any additional assistance, please submit a ticket here or call the IPPS Help Desk at (858) 534-9494.

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Mastering Expense Reimbursement: The Complete Process and Best Practices

Expense reimbursement is a significant cost for businesses, requiring efficient methods and technology to manage effectively. Without proper systems, time and money can be lost in the process. 

The complexity of expense reimbursement not only consumes your and your employees’ valuable time but also leaves businesses vulnerable to fraud. To mitigate these challenges, businesses need streamlined processes and reliable technologies. 

In this blog, we will explore the intricacies of expense reimbursement, highlighting the importance of efficient management and the role of technology in simplifying the process and reducing the risk of fraud.

What is Expense Reimbursement?

Expense reimbursement is a crucial process for businesses of all sizes and industries. It involves compensating employees for out-of-pocket expenses they incur while performing their job duties. Unlike regular salaries, these reimbursements are not subject to tax deductions.

Employees often need to pay for work-related expenses upfront, such as travel or client entertainment. A formal expense reimbursement plan ensures that employees are reimbursed fairly and promptly. It also helps management control spending and maximize tax benefits.

Without a well-structured reimbursement plan, requests and reports may be overlooked, leading to delays in reimbursing employees. A disorganized process can also create frustration and tension between employees and management. Therefore, it’s essential to establish a clear and efficient procedure for employee reimbursement .

Example of Expense Reimbursement

Imagine you’re a sales representative for a company, and your job involves traveling to meet clients. During one of your trips, you need to book a hotel for two nights and have meals while away. You pay for these expenses using your credit card, totaling $500.

After returning from your trip, you compile an expense report detailing your expenditures, including receipts for the hotel stay and meals. You submit this report to your manager along with the receipts as proof of your expenses.

Your manager reviews the report and approves the travel expense reimbursement . The finance department then processes the reimbursement, and you receive $500 to cover the costs you incurred during your business trip.

Types of Expenses Reimbursement

There are several types of expense reimbursements that businesses commonly use:

• Travel Expenses: This includes costs employees incur while traveling for work, such as airfare, hotel accommodations, rental cars, and meals.
• Mileage Reimbursement: When employees use their vehicles for work-related travel, they can be reimbursed based on the number of miles driven at a standard rate.
• Meal Expenses: Employees can be reimbursed for meals purchased while traveling for work or during business meetings.
• Transportation Expenses: This includes costs for public transportation, taxis, or ride-sharing services used for business purposes.
• Supplies and Materials: Reimbursement for office supplies or materials purchased by employees for work-related activities.
• Client Entertainment: Expenses related to entertaining clients, such as meals or event tickets, can be reimbursed.
• Training and Education: Reimbursement for costs associated with attending work-related training or educational events.

Businesses need to have clear policies and guidelines regarding what expenses are eligible for reimbursement and the documentation required to process reimbursement requests.

What Qualifies as a Reimbursable Expense?

When determining the validity of employee’s expense reimbursements, adherence to the organization’s travel and expense policies is paramount. Any expense incurred personally by employees must align with these policies.

If the expense fits into any of the following categories, it qualifies for reimbursement:

• Is the expense necessary for the completion of the job? 
• Would any employee in the same position incur the same expense?
• Are the expenses related to travel that are essential and unavoidable for job completion?
• Did the employee use their funds to cover on-the-job expenses?
• Has the employee submitted a reimbursement claim for an expense?
• Has the employee submitted proof of payment for the expense incurred?
• Did the employee inform the higher management or accounting department within a reasonable time?

How Should Employees Report Expenses?

Employees should report expenses by filling out an expense report form, detailing costs incurred while conducting business activities. This form is essential for reimbursement and financial reporting purposes.

An expense report typically includes:

Expense Details: Date, description, amount, and currency of each expense.

Expense Categories: Grouping expenses by type (e.g., lodging, meals, travel) to help organize and analyze spending.

Supporting Documents: Receipts, invoices , or other proof of payment for reimbursement and auditing purposes.

Total Charges: Summing up all expenses for a specific period, with subtotals for different expense categories if needed.

Additional Details: Purpose of the expense, project/client associated with it, and any special notes.

Once completed, the expense report is submitted to the appropriate department or authority within the organization for review, approval, and processing. The organization’s policies and procedures will determine how expenses are evaluated, reimbursed, and recorded in financial records.

A Step-by-Step Guide to Expense Reimbursement Process

1. define a clear expense policy.

Begin by developing a comprehensive expense policy that clearly outlines which expenses are eligible for reimbursement and the procedures for submitting reimbursement claims. This policy serves as a guide for employees and helps prevent overspending or reimbursement requests for non-allowable expenses.

2. Categorize Expenses

Establish a method for organizing and categorizing expenses to streamline the reimbursement process. This could involve creating expense categories based on the nature of the expense (e.g., travel, meals, supplies) and ensuring that expenses are properly classified for accurate reporting and accounting purposes.

3. Educate Employees on Reimbursement Procedures

Ensure employees understand the rules and procedures for submitting reimbursement claims, including the importance of accurate documentation and adherence to the policy guidelines. Encourage open communication and address employees’ questions or concerns to ensure compliance with the policy.

4. Specify the Documentation Requirements

Clearly define the documentation requirements for each expense category to ensure compliance with the policy. This may include receipts, invoices, or other proof of purchase. Explain to employees the importance of maintaining and submitting accurate documentation to support their reimbursement claims.

5. Record and Manage Expenses

Implement a system for employees to capture and document their expenses. This could be a digital system where employees can upload photos of receipts or a manual process where employees keep physical copies of receipts. Ensure that the process is easy to use to encourage compliance.

6. Submit Expense Reports

Offer a platform to employees where they can submit their expense details seamlessly. The platform can be an automated travel and expense management software or a manual form or spreadsheet. Encourage employees to submit their reports on time to avoid delays in processing. Provide guidance on completing the expense report form and what information is required for each expense.

7. Review and Approve Expense Claims

Designate a review process for expense reports to ensure compliance with the policy. This may involve a review by the finance team or department managers to verify the accuracy and validity of the expenses. Any discrepancies or non-compliant expenses should be addressed and resolved before expense approval .

8. Reimbursement Expenses

Once expense reports have been reviewed and approved, ensure that reimbursements are processed promptly. Timely reimbursement helps maintain employee satisfaction and ensures that employees are not financially burdened by out-of-pocket expenses incurred while performing their job duties.

Major Roadblocks in the Manual Expense Reimbursement Process

1. Employee cash flow constraints . Traditional reimbursement processes strain employees’ finances and satisfaction; delays worsen this, especially with check-based payments.

2. Ambiguity in expense policies. Complex policies lead to confusion, non-compliance, and overspending; clear policies are crucial for adherence and a smooth reimbursement process.

3. Limited spend visibility. Lack of real-time expense data hampers effective monitoring and managing of employee spending, impacting financial processes.

4. Cumbersome paperwork. Manual receipt management is time-consuming and error-prone; automation can streamline this process, reducing manual efforts.

5. Prone to errors. Manual entry increases the likelihood of inaccuracies in financial records, emphasizing the need for digital solutions for accuracy.

6. Communication Challenges. Miscommunication delays reimbursements; clear instructions on documentation and approval procedures are essential.

7. Receipt management issues. Manual receipt handling is challenging; automation simplifies receipt verification and matching with expense reports.

8. Approval delays. Manual approval processes are inefficient and lead to delays; automation can streamline workflows for faster approvals.

9. Manual audit and compliance challenges. Manual checks are time-consuming; automated solutions are needed for efficient compliance checks and error detection.

How to Streamline Expense Reimbursement Process?

Streamlining the expense reimbursement process can significantly improve efficiency and reduce administrative burdens. Automation plays a crucial role in achieving this goal. By automating expense reimbursement, organizations can eliminate manual tasks, reduce errors, and speed up the reimbursement cycle.

Automation allows employees to submit expenses easily through digital platforms, such as expense management software or mobile apps. These tools can automatically validate expenses against company policies, ensuring compliance and reducing the need for manual review. 

Furthermore, automation enables faster approval processes, as managers can review and approve expenses digitally, from anywhere. This eliminates the need for physical receipts and paper-based approval workflows, making the process more efficient and convenient for everyone involved.

How Automated Expense Reimbursement Benefit Everyone?

Automated expense reimbursement offers advantages that boost morale, tax deductions, and productivity. Let’s delve into these benefits for both employers and employees.

Benefits for Employers

• Error Reduction: Automation eliminates errors in expense reporting and reimbursement processes, reducing mistakes made by employees, managers, and finance departments.
• Paperless Processes: Automation reduces paperwork, allowing supervisors and finance teams to manage reports efficiently and quickly.
• Policy Compliance: Automation ensures greater compliance with company expense policies, flagging and preventing reimbursement for reports that violate these policies.
• Increased Visibility: Automation provides better visibility into spending, helping identify overspending or underspending categories and allowing for better control and forecasting of expenses.

Benefits for Employees

• Reduced Personal Burden: A good reimbursement process assures employees that their money spent on business expenses will be reimbursed, reducing financial stress.
• Stress-Free Travel: Structured reimbursement systems guarantee that employees’ business trips are stress-free by eliminating the possibility of payment delays.
• Simplified Expense Claims: A clear and straightforward reimbursement process helps employees adhere to procedures and expense policies, making expense claims easier and more manageable.

How Peakflo Streamlines Expense Reimbursement?

Peakflo’s Travel and Expense Management solution streamlines expense reimbursement. It provides a suite of features that simplify the entire process from policy creation to auto-disbursement . It allows companies to configure specific policies for allowable expenses, manage expense categories, and define rules for approvals based on various criteria. 

With Peakflo, employees can easily submit travel requests and expenses, while managers can quickly review and approve them. Automation ensures compliance with company policies, reduces errors, and speeds up reimbursement cycles. 

The system also offers 2-way matching with OCR technology , flagging any mismatches or duplicate expenses. Additionally, Peakflo centralizes communication and approvals, providing a clear audit trail for transparency and accountability.

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Expense Reconciliation: A How-to Guide to Reconcile Expense Reports

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Accounting | How To

Determining Tax Deductions for Travel Expenses + List of Deductions

Published August 15, 2023

Published Aug 15, 2023

WRITTEN BY: Tim Yoder, Ph.D., CPA

This article is part of a larger series on Accounting Software .

• 1. Determine Your Trip Meets the Requirements of a Business Trip
• 2. Check the List of Business Expenses That Qualify for Deductions
• 3. (For Those Mixing Business & Personal Travel): Allocate Expenses

Bottom Line

The IRS considers deductible travel expenses to be any ordinary and necessary expenses you incur while traveling away from home on business. To get tax deductions for travel expenses, the trip must have a business purpose and be temporary (less than one year) and you must be away from your tax home for a length of time that exceeds your usual work day or be away overnight to get sleep to fulfill the demands of your job while away.

Key Takeaways

• A qualifying business trip must take you away from home overnight long enough to require rest.
• Most expenses incurred during a qualifying business trip are deductible, including meals on days off.
• Partnerships, limited liability companies (LLCs), and corporations can directly pay or reimburse employees for business travel expenses and deduct them from their business returns.
• Self-employed business owners will deduct their travel expenses on Schedule C, while farmers will use Schedule F.
• Purely personal expenses on business trips, such as sightseeing, are nondeductible.

Step 1: Determine Your Trip Meets the Requirements of a Business Trip

A business trip for tax purposes is one that meets the following criteria:

• There must be a business purposes for the travel
• You are required to be away from your tax home
• The trip lasts overnight or a period long enough to require rest
• The trip is temporary

Business Purpose

Your trip must be an ordinary and necessary part of conducting your business for your expenses to be deductible. Below are some reasons you may decide to travel for business:

• Meeting with clients or customers: If you travel overnight to meet with clients or customers for business purposes, such as negotiating contracts, discussing projects, or providing consultations.
• Attending business conferences or seminars: If you travel to attend conferences, seminars, or trade shows that are relevant to your business activities, including acquiring new industry knowledge or networking with other professionals.
• Training or professional developmen t : If you travel to attend training programs, workshops, or courses directly related to your business or profession.
• Conducting in-person meetings or negotiations: If you need to travel to have face-to-face meetings or negotiations with business partners, suppliers, or other stakeholders.

Your tax home is not your residence but rather your principal place of business activity including the entire city or general location of your business. So, your business trip cannot be in the general vicinity of your principal place of business for you to be away from home.

• Amount of time you spend at each location
• Degree of business activity in each area
• Relative significance of the financial return from each area
• No regular place of business: If, by the nature of the work, there is no regular or principal place of business, then your tax home will be the place where you regularly live and where you travel to different job sites to perform your service.

For example, a self-employed repair person may not have a regular place of business because they spend each workday at a different customer’s location.

Overnight Stay

Overnight stays for travel purposes do not specifically mean staying from evening to the next morning. Instead, overnight means that the trip is longer than a typical day’s work and long enough for you to require rest. Resting in your car is generally not enough, but if you have to get a hotel room, then the trip will qualify as overnight regardless of when you sleep.

Transportation vs travel expenses: Local transportation at your tax home can be deductible without an overnight stay—if there is a business reason for the transportation, such as driving from your office to visit a client. On a tangent, when you travel overnight, your transportation is deductible, and so are things like lodging, meals, and incidental expenses.

Temporary Travel

For purposes of business travel, a temporary stay is one that is expected to last for less than one year. Open-ended trips are not temporary.

However, say you initially anticipate that your trip will last less than one year, but it later becomes apparent that it will last more than one year. The trip is a deductible business trip up until the point in time it becomes apparent it will last more than one year.

The IRS will also consider a series of assignments to the same location, all for short periods, that together cover a long period to be an indefinite assignment. Any expenses you incur from this type of trip will not be deductible.

Step 2: Check the List of Business Expenses That Qualify for Deductions

Your travel expenses must be business-related—unless an exception applies—to qualify for a deduction. However, if you incur expenses that are purely for personal pleasure, they are nondeductible.

Here is a list of business travel expenses that can be deducted.

Round-trip Transportation To-and-From the Destination

Transportation for a round trip to and from your temporary work location is deductible—and it could be anything that gets you to the location, including via your personal car. If you use your personal car, your costs are calculated using either the actual expenses or the standard mileage rate .

In addition, you can deduct additional round trips to return to home when you are not working.

However, the deduction for the additional round trips is limited to the cost you would have incurred if you stayed at the temporary location. Those costs could include meals and lodging.

• The business purpose of the meals is your business trip and are thus deductible—even if you eat alone.
• Meals on days off qualify.
• Travel to and from meals is deductible—even on your days off.
• The meals do not have to have a specific business purpose, such as meeting with a client.
• For longer trips, lodging can include monthly rentals.
• If you return home on your days off but keep the lodging at your travel location, then the lodging is still deductible if it is ordinary and necessary. For instance, the monthly rent of an apartment at your travel location would be deductible even if you return home on the weekends.

Transportation at the Destination

Once you arrive at your destination, you may need additional transportation to get around town—and these costs are deductible. The only exception would be if you travel to the destination for a purely personal reason like sightseeing on your day off.

Incidentals

Incidental expenses are minor expenditures associated with business travel. You can deduct the actual cost of any one of the following expenses:

• Shipping of baggage and sample or display material between your regular and temporary work locations
• Business seminar and registration fees
• Dry cleaning and laundry
• Business calls include business communications by fax machine and other communication devices
• Tips you pay for services related to any of these expenses
• Parking, tolls, and fees
• Any other similar ordinary and necessary expenses related to your business travel

Step 3 (For Those Mixing Business & Personal Travel): Allocate Expenses

When trips are both business and personal, the allocation of expenses varies based on the primary purpose of the trip. Determining the primary purpose of your journey requires you to evaluate the time spent on business vs personal activities.

Primarily Business Domestic Trips

If your trip is primarily for business purposes, then the round-trip transportation is 100% deductible and does not need to be allocated to the personal portion of your trip. However, all other expenses, like lodging and meals, must be allocated to personal expenses for days where there was no business reason for staying.

For example, if your seminar ends on Friday and you stay until Sunday, then the lodging and meals for Saturday and Sunday are nondeductible.

Primarily Personal Domestic Trips

If the primary purpose of your trip is personal, then none of the round-trip expenses are deductible. However, you can deduct the business portion of meals, lodging, and local transportation that was incurred for a business purpose.

Let’s say you stay a couple of days after your family vacation to meet with a client. The lodging and meals for those extra days are deductible.

Business Foreign Trips

The allocation of travel expenses on foreign trips is slightly different from the rules above. Round-trip transportation for foreign trips must be allocated to business and personal based on the number of business vs personal days on the trip. This is different from the “all or nothing” rule for the cost of domestic round-trip travel.

If your spouse joins you on a business trip, you usually cannot deduct any of their expenses. However, if your spouse’s trip satisfies a business purpose, then expenses must be otherwise deductible by the spouse.

Generally, for the travel costs of a spouse, dependent, or any other person to be tax-deductible, they must work for the business or be a co-owner.

Frequently Asked Questions (FAQs)

Are travel expenses tax deductible for business.

Yes, roundtrip travel is 100% tax deductible as long as the primary purpose of the trip is business. Once at your destination, expenses must be allocated between business and personal. However, all meals are deductible as long as the reason for your continued stay is business.

Can I deduct travel expenses for my employees?

Yes, you can generally deduct travel expenses for your employees as long as the expenses are ordinary and necessary, directly related to your business, and properly substantiated.

Is there a limit to the amount of travel expenses I can deduct?

Yes, there are some such as business travel on a cruise ship, where the expense is limited to $2,000 per year. Also, your expenses are limited to the non-lavish or extravagant cost of the trip, so you may want to be careful before booking a 5-star hotel.

Travel expenses are ordinary and necessary expenses you incur while you are temporarily away from home, so these expenses cannot be lavish in nature. To determine if a travel expense is deductible, it must be directly related to your trade or business.

When it comes to travel expenses, having well-organized records makes it much simpler to complete your tax return. Keep track of any records that may be used to substantiate a deduction, such as receipts, canceled checks, and other documentation.

About the Author

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Tim Yoder, Ph.D., CPA

Tim worked as a tax professional for BKD, LLP before returning to school and receiving his Ph.D. from Penn State. He then taught tax and accounting to undergraduate and graduate students as an assistant professor at both the University of Nebraska-Omaha and Mississippi State University. Tim is a Certified QuickBooks ProAdvisor as well as a CPA with 28 years of experience. He spent two years as the accountant at a commercial roofing company utilizing QuickBooks Desktop to compile financials, job cost, and run payroll. Tim has spent the past 4 years writing and reviewing content for Fit Small Business on accounting software, taxation, and bookkeeping.

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10 tax deductions for travel expenses (2023 tax year).

Tax season can be stressful, especially if you’re unaware of the tax deductions available to you. If you’ve traveled for work throughout the year, there are a number of deductions for travel expenses that can help reduce your taxable income in 2024 and save you money.

Read on for 10 tax deductions for travel expenses in the 2023 tax year.

Are business travel expenses tax deductible?

Business travel expenses incurred while away from your home and principal place of business are tax deductible. These expenses may include transportation costs, baggage fees, car rentals, taxis, shuttles, lodging, tips, and fees.

It is important to keep receipts and records of the actual expenses for tax purposes and deduct the actual cost.

What kinds of travel expenses are tax deductible?

To deduct business travel expenses, they must meet certain criteria set by the IRS.

The following are the primary requirements that a travel expense must meet in order to be eligible for a tax deduction:

• Ordinary and necessary expenses: The expense must be common and accepted in the trade or business and be helpful and appropriate for the business.
• Directly related to trade or business: The expense must be directly related to the trade or business and not of a personal nature.
• Away from home overnight: The expense must have been incurred while away from both the taxpayer’s home and the location of their main place of business (tax home) overnight.
• Proper documentation: The taxpayer must keep proper documentation, such as receipts and records, of the expenses incurred.

Eligible Business Travel Tax Deductions

Business travel expenses can quickly add up. Fortunately, many of these expenses are tax deductible for businesses and business owners.

Here is an overview of the types of business travel expenses that are eligible for tax deductions in the United States:

Accommodation Expenses

Accommodation expenses can be claimed as tax deductions on business trips. This includes lodging at hotels, rental costs of vacation homes, and other lodgings while traveling.

Meal Expenses

Food and beverage expenses incurred on a business trip may be deducted from taxes. This includes meals while traveling and meals during meetings with clients or contractors.

Transportation Expenses

Deducting business travel expenses incurred while on a business trip may also be claimed.

This includes flights, train tickets, car rentals, gas for personal vehicles used for the business trip, toll fees, parking fees, taxi rides to and from the airport or train station, and more.

Expenses of operating and maintaining a car

Expenses of operating and maintaining a car used for business travel may also be claimed as tax deductions.

This includes fuel, insurance, registration costs, actual costs of repairs, and maintenance fees. Fees paid to hire a chauffeur or driver may also be deducted.

Operating and maintaining house-trailers

Operating and maintaining house trailers for business travel may be eligible for tax deductions, provided that the use of such trailers is considered “ordinary” and “necessary” for your business.

This includes any costs associated with renting or owning a trailer, such as fuel costs, repair and maintenance fees, insurance, and registration charges.

Internet and phone expenses

Internet and phone expenses associated with business travel can also be claimed as tax deductions. This includes the cost of any internet service, such as Wi-Fi or data plans, and phone services, such as roaming charges or international calls.

Any communication devices purchased for business use, such as smartphones and laptops, may also be eligible for tax deductions.

Computer rental fees

Rental fees for computers and other computing devices used during business travel may also be deducted from taxes. This includes any applicable charges for purchasing, leasing, or renting a computer, as well as the related costs of connecting to the Internet and other digital services.

All such expenses must be necessary for the success of the business trip in order to qualify for a tax deduction.

Travel supplies

Travel supplies, such as suitcases and other bags, are also eligible for tax deductions when used for business travel. Any costs associated with keeping the items protected, such as locks and tracking devices, can also be claimed as tax deductions.

Other necessary supplies, such as office equipment or reference materials, may also be eligible for deductions.

Conference fees and events

Conference fees and events related to business travel may also be eligible for tax deductions. This includes fees associated with attending a conference, such as registration, accommodation, and meals.

Any costs related to the organization of business events, such as venue hire and catering, may also be claimed as tax deductions.

Cleaning and laundry expenses

Business travel expenses associated with cleaning and laundry may also be claimed as tax deductions. This includes a portion of the cost of hotel and motel services, such as cleaning fees charged for laundering clothing, as well as any other reasonable expenses related to keeping clean clothes while traveling away from home.

Ineligible Travel Expenses Deductions

When it comes to business expenses and taxes, not all travel expenses are created equal. Some expenses are considered “Ineligible Travel Expenses Deductions” and cannot be claimed as deductions on your income taxes.

Here is a list of common travel expenses that cannot be deducted, with a brief explanation of each:

• Personal Vacations: Expenses incurred during a personal vacation are not deductible, even if you conduct some business while on the trip. In addition, expenses related to personal pleasure or recreation activities are also not eligible for deductions.
• Gifts: Gifts purchased for business reasons during travel are not deductible, even if the gifts are intended to benefit the business in some way.
• Commuting: The cost of commuting between your home and regular place of business is not considered a deductible expense.
• Meals: Meals consumed while traveling on business can only be partially deducted, with certain limits on the amount.
• Lodging: The cost of lodging is a deductible expense, but only if it is deemed reasonable and necessary for the business trip.
• Entertainment: Entertainment expenses, such as tickets to a show or sporting event, are not deductible, even if they are associated with a business trip.

How to Deduct Travel Expenses

To deduct travel expenses from income taxes, the expenses must be considered ordinary and necessary for the operation of the business. This means the expenses must be common and accepted business activities in your industry, and they must be helpful, appropriate, and for business purposes.

In order to claim travel expenses as a deduction, they must be itemized on Form 2106 for employees or Schedule C for self-employed individuals.

How much can you deduct for travel expenses?

While on a business trip, the full cost of transportation to your destination, whether it’s by plane, train, or bus, is eligible for deduction.

Similarly, if you rent a car for transportation to and around your destination, the cost of the rental is also deductible. For food expenses incurred during a business trip, only 50% of the cost is eligible for a write-off.

How do you prove your tax deductions for travel expenses?

To prove your tax deductions for travel expenses, you should maintain accurate records such as receipts, invoices, and any other supporting documentation that shows the amount and purpose of the expenses.

Some of the documentation you may need to provide include receipts for transportation, lodging, and meals, a detailed itinerary or schedule of the trip, an explanation of the bona fide business purpose of the trip, or proof of payment for all expenses.

What are the penalties for deducting a disallowed business expense?

Deducting a disallowed business expense can result in accuracy-related penalties of 20% of the underpayment, interest charges, re-assessment of the tax return, and in severe cases, fines and imprisonment for tax fraud. To avoid these penalties, it’s important to understand expense deduction rules and keep accurate records.

Can you deduct travel expenses when you bring family or friends on a business trip?

It is not usually possible to deduct the expenses of taking family or friends on a business trip. However, if these individuals provided value to the company, it may be possible. It’s advisable to speak with an accountant or financial expert before claiming any deductions related to bringing family and friends on a business trip.

Can you deduct business-related expenses incurred while on vacation?

Expenses incurred while on a personal vacation are not deductible, even if some business is conducted during the trip. To be eligible for a deduction, the primary purpose of the trip must be for business and the expenses must be directly related to conducting that business.

Can you claim a travel expenses tax deduction for employees?

Employers can deduct employee travel expenses if they are ordinary, necessary, and adequately documented. The expenses must also be reported as taxable income on the employee’s W-2.

What are the limits on deducting the cost of meals during business travel?

The IRS permits a 50% deduction of meal and hotel expenses for business travelers that are reasonable and not lavish. If no meal expenses are incurred, $5.00 daily can be deducted for incidental expenses. The federal meals and incidental expense per diem rate is what determines the standard meal allowance.

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Travel expenses list: A guide to managing your travel budget

Explore our travel expenses list and learn how to optimize your travel budget. Stay organized, track your spending, and make informed decisions with Accrue.

A travel expenses list is essential for mapping and managing your travel budget. It helps ensure you don’t overspend or underestimate the cost of your trip. You can keep track of planned and unplanned expenses, ensuring they fit within your overall budget.

Unfortunately, for most travelers, budgeting isn’t easy. The cost of airfare, accommodation, and meals vary greatly and can quickly add up. Without an organized strategy in place, it’s all too easy to blow your budget and end up with a mountain of debt.

Learn in this comprehensive guide the basics of creating a travel expenses list, including transportation, accommodations, food & beverage, and activities, and offer advice on saving money while traveling.

1. Transportation

Transportation costs refer to all your costs of moving from point A to point B. They account for the biggest chunk of most travel budgets and include:

Many travelers, especially those traveling for business purposes, prefer booking flights due to convenience, speed, and cost-effectiveness. Airfare is the amount you pay for the plane ticket and can vary greatly depending on the airline, route, and time of year. However, there are other additional airport expenses, such as luggage, taxes, and transfers you must factor into your budget. 

Car rental and gas

You may need a rental car at the destination to help you get around, especially if you plan to explore the area and take side trips. Depending on where you’re going and for how long, renting a car might be more cost-effective than using public transportation, taxis, or rideshares — factor in the rental cost, insurance, and gas. 

Other additional fees include parking fees, tolls, and pit stops on the road. If you’ll be driving a lot, look into getting a fuel-efficient car and research the average cost of gas in the area.

Public transit

Public transportation is typically the cheapest way to get around a city, especially if you plan on taking multiple trips. It includes subways, buses, ferries, and trains, each with its own rate. Buses, metro, and train tickets vary in price depending on the region. 

Consider buying a day pass or multipass to save transport money if you plan on taking multiple trips. Most cities also offer rideshare services like Uber and Lyft, which can be more cost-effective than driving a personal vehicle. Research the public transit options available at your destination to see which fits your budget.

Parking fees and tolls

If you plan to drive a lot during your trip, you might have to pay parking fees and tolls. Parking fees vary depending on the city and are usually hourly or daily. Some cities have free street parking but most paid lots and garages charge a fee. 

Tolls are charges for using certain roads and bridges. You can pay the tolls in advance or use a toll pass for the duration of your trip. Other expenses associated with car rentals include insurance, gas, and repairs.

2. Accommodations

Accommodation expenses are the costs of staying at a place during your trip. They include hotel stays, Airbnb rentals, hostels, and campsites. The prices vary depending on the accommodation type, amenities, and location — research various options to determine what works best for your budget.

Hotels and resorts

Hotels and resorts are the most common option for short-term stays. They can range from budget-friendly motels to luxurious five-star hotels and offer a range of amenities like swimming pools, spas, saunas, and fitness centers. 

Their prices depend on the location, star rating, and amenities. You will incur additional fees for hotel room service, extra beds, laundry, and other services. Book in advance or use hotel rewards and loyalty programs to save money .

Bed and breakfast (B&B) expenses

Bed and breakfast establishments offer a more affordable and intimate experience than hotels. They can range from private rooms in someone’s home to luxurious properties with multiple bedrooms. 

Prices usually include bed and breakfast, but you may be charged for extra amenities like housekeeping, dry cleaning, and Wi-Fi. Unlike hotels, you’ll be dealing directly with the owner, so it’s essential to read reviews and ask questions before booking.

Meal expenses also account for a considerable chunk of your travel budget, so it’s important to plan ahead and budget accordingly. How much money you spend on food depends on where you’re going, the type of food you like, and how often you plan to eat out. 

Local cuisine is usually the cheapest option, so find places that offer authentic dishes. Bringing snacks such as nuts, energy bars, and trail mix is always a good idea. You can save money by snacking instead of buying expensive meals. Ordinary meal expenses include:

Restaurants and dining out

Restaurant dining is the most common way to eat while on vacation or a business trip, but it can be costly. Prices vary depending on the type of restaurant, cuisine, and location. Fine dining establishments charge premium prices for their food and drinks, while casual eateries and fast food joints are more affordable. Check out local restaurants and read reviews before going out. Deals such as discounts for early birds or happy hours are creative ways to help you save on these expenses.

Street food and vendors

Street food is a popular option for travelers who want to indulge in the local culture and cuisine. Street vendors often serve traditional dishes at low prices. You can find food carts or stalls selling sandwiches, kebabs, tacos, and other dishes. However, be mindful of food safety and hygiene protocols to avoid getting sick. Research average prices for the area to make sure you’re not being overcharged.

Coffee and beverages

Coffee and beverages are usually the least expensive items on the menu. You can find coffee shops and cafes selling specialty drinks, like lattes, cappuccinos, and frappuccinos, at a fraction of the price of restaurants. 

Most places also offer tea, smoothies, juices, and other non-alcoholic drinks. Local markets will usually have cheaper options for bottled water and other beverages. For alcoholic drinks, look for local breweries, pubs, and bars and take advantage of happy hours and specials to save money.

Tipping and service charges

Tipping is common in many countries and is expected for certain services, such as restaurant meals and hotel stays. The tip amount varies depending on the quality of service and local customs. It’s usually 15-20% for a meal, but you can check with the restaurant or your server if in doubt. 

Service charges come with the bill and should be indicated on the menu. Allocate a portion of your travel budget to cover tips and service charges. Staff at hotels, restaurants, and other establishments rely on tips for their income, so be generous when you can.

4. Activities and entertainment

A vacation wouldn’t be complete without some fun and entertainment. You can find inexpensive or free activities to do depending on where you’re traveling. Museums, galleries, and other cultural attractions are usually free or have discounted admission for students and seniors. Typical expenses for activities and entertainment:

Sightseeing and attractions

Sightseeing is a big part of many people’s travel plans. Historical and cultural attractions, like monuments, churches, and museums, are usually the most popular sightseeing destinations. You can also visit theme parks, zoos, aquariums, and art galleries. 

Prices vary depending on the type of attraction, and access passes are usually cheaper than buying tickets for individual attractions. You can pay a small fee to take historical tours from locals, while in certain cities, free walking tours are also available.

Organized tours and excursions

The best and most fun-filled way to see a new place is to join an organized tour or excursion. Most cities have tours that take you to the must-see sights and attractions but you can also book day trips to castles, vineyards, or nature reserves. 

An organized tour covers entrance fees, transport, and sometimes meals. Compare rates and read customer reviews to find the best value for your money.

Outdoor activities

Outdoor activities like hiking, biking, and water sports are great ways to explore the local landscape. Many national parks and forests have trails for biking, horseback riding, and climbing. 

Some parks offer guided tours with experienced instructors. The guided tours usually include equipment rentals and safety gear, but you may incur park entrance or permit fees for certain activities.

Shows and performances

If you’re looking for a bit of culture, shows, and performances are a great way to spend an evening. Theaters and opera houses often have discounted prices for matinee shows or special performances. 

If you’re staying in a city, look out for street performers and enjoy free outdoor concerts. Cinemas are usually cheaper than live performances, so you can taste the local culture without breaking your budget.

Spa and wellness

Spa treatments are a great way to re-energize after a long flight or an intense sightseeing session. Some hotels offer complimentary spa treatments, while others have special deals for guests. 

Try a local massage parlor or a yoga studio if you want something more affordable. You will pay from a few dollars to hundreds, depending on your chosen services. Spa services usually include massages, facials, saunas, and steam rooms.

5. Shopping and souvenirs

Bringing back souvenirs is a fun part of any trip, but it can be easy to overspend on gifts for yourself and your loved ones. The cost of souvenirs depends on where you’re traveling and the type of item you want to buy. It’s common to bargain or haggle for lower prices in some places. Research the local currency and market prices to avoid getting ripped off. 

Travelers should also be aware of import laws and customs regulations. There may be restrictions on certain items such as food, alcohol, and tobacco.

6. Emergency and unprecedented expenses

Despite how well you plan your trip, there may be unexpected costs. Unforeseen events, such as a life-threatening medical emergency or natural disaster, can result in high expenses. Budget for emergency funds and purchase travel insurance to cover any medical costs or unexpected losses. 

Carry enough cash for emergencies, and use a debit or credit card for international purchases. Also, double-check your documents to ensure you have all the necessary visas and permits before your trip.

7. Currency exchange rates

Exchange rates make a huge difference when transferring money or paying in foreign currency. Compare current rates with those from the booking time to ensure you get the best deal. Check with your local bank or credit card provider for their rates and fees. 

You can also look up online currency converter tools to see how much you spend in your home currency. Be aware of hidden charges when exchanging money. Such hidden charges include ATM fees, commissions, and other administrative costs that can quickly add up.

Tips for managing travel expenses

Proper travel expense management is critical to a successful and enjoyable trip. Planning ahead and budgeting for each expense will help you manage your travel expenses.

Set daily spending limits and monitor your expenses

Estimate your total budget for the trip and then divide it into daily spending limits. This will help you stay on budget while still allowing you to enjoy the activities and attractions. Monitor your personal expenses throughout the trip to ensure you don’t exceed the budget.

Save money on product purchases with Accrue Savings

Saving money for travel expenses is a challenging feat. Juggling everyday expenses while saving for a trip can be overwhelming. Accrue Savings is a great way to save money for travel without having to scrimp and sacrifice everyday items. 

This easy-to-use service allows you to save money for travel expenses by automatically putting aside a portion of your everyday purchases. You only need to create a free Accrue account, fund your wallet, and track your progress. And there is no set amount you must contribute — save as little as $1 weekly or $50 monthly, depending on your flexibility.

Book everything in advance

Book flights, accommodations, and activities in advance to get the best deals and save on travel costs. Check for airline discounts or hotel loyalty programs, and watch for last-minute discounts and deals on attractions and activities.

Traveling during the off-peak season

Flights and accommodation prices tend to be higher during the peak season. Consider traveling during the off-peak season when prices are lower. Hotels usually offer discounts or special packages during this time, saving you money on accommodations. You may have to sacrifice some activities due to fewer available options, but you’ll get more bang for your buck.

Keep an eye out for discounts

Take advantage of discounts and special deals to save on out-of-pocket expenses. Look for coupons, student or senior discounts, and loyalty club memberships that offer discounts on activities and attractions. You can also find discount codes for car rentals, restaurants, and other services online. Business travel expenses, for instance, may be tax-deductible depending on your situation.

Save intelligently on your purchases Accrue Savings

Poor budgeting decisions can quickly put a damper on your trip. Accrue Savings provides a smart and easy way to save money for travel expenses while avoiding the risk of overspending.

It’s a great way to keep your travel expenses in check without missing out on the fun. Once you sign up and fund your wallet, you can track your progress and watch your savings grow. You will also earn rewards along the way to help you realize your travel dreams quickly. 

Register today and check out our partners to earn money toward your future travel expenses and purchases.

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Everything you need to know about T&E

Every dollar counts in the business world, yet a significant amount often goes unchecked: travel and expense (T&E). T&E is a substantial category in business accounting that handles costs incurred by employees on the road or while entertaining clients.

These expenses, which often include meals, lodging, travel fares, and client entertainment costs, quickly add up. That’s why you need a solid T&E expense management strategy to keep up with your business's financial health. But before we dive into strategic guidelines and tools for managing these expenses, let's lay the foundation.

What are T&E expenses?

T&E expenses can vary widely, depending on the industry, company size, and corporate policies regarding employee spending limits and acceptable expenditures. Examples of T&E expenses include the following:

hotel accommodations

car rentals

meals on the road

expenses associated with entertaining clients

parking fees

T&E expense management tips

The following are some best practices management tips when it comes to T&E.

Create a clear policy

One of the first steps in effective T&E expense management is to create a clear policy. This policy should outline what expenses are considered eligible for reimbursement and provide guidelines for employees on how to submit their expenses. It should also specify any spending limits or restrictions and detail the reimbursement process.

Educate employees

Once you’ve got a clear policy in place, another critical part of effective T&E expense management is educating and empowering employees about the company's T&E process. This way, employees are aware of what will and won’t be approved, avoiding any unwelcome surprises.  

When they go on a business trip, for example, should they use their own card or a company card? What are the limits for spending in each category? How should they keep track of receipts and other documentation? And, if they need to pay for things with their own money upfront, how do they get reimbursed? Even better, use a T&E platform that helps educate employees on their policy when booking travel and generating expenses. 

Use technology

Investing in a T&E expense management software simplifies and streamlines the process. It allows employees to easily submit their expenses, track their spending, and ensure compliance with company policies.

What you want to look for in a good expense management software is something that provides automated approval workflows, allowing managers to review and approve expenses quickly. You also want something that makes it easy on employees when it comes to tracking expenses and knowing if they’ve reached their limit or not. 

For example, a platform that uses a receipt scanning feature is ideal. This helps to speed up the reimbursement process and ensures expenses are being properly reviewed and authorized.

Set spending limits

To control costs and prevent overspending, set spending limits for different expense categories. This can be done by establishing maximum allowable amounts for things like meals, accommodation, and transportation. Doing this also helps to encourage employees to be more aware of their spending. 

Regularly audit and review expenses

Minimize fraud and ensure policy compliance by regularly auditing and reviewing T&E expenses. This means randomly selecting and examining expense reports to verify the accuracy of the information provided.

Then, you can identify any discrepancies early on and address them right away to maintain financial transparency and reinforce the importance of sticking to company policies.

Leverage data analytics

Data analytics can play a crucial role in T&E expense management. By leveraging data analytics tools, companies can gain insights into spending patterns, identify areas of potential cost savings, and uncover any fraudulent activities. Analyzing expense data also helps to identify trends, such as excessive spending on certain categories or by specific employees. 

Creating a robust T&E budget

For small businesses, effectively managing T&E spend is crucial in financial planning and can influence the company's bottom line. Here are the steps involved in creating a T&E budget for your company.

Analyze past spending

Start by looking at past expenses to understand spending patterns. Categorize these expenses to identify where the bulk of the money goes. Then, you’ll be ready to create guidelines around these categories and know where to set limits.

Establish spending guidelines

Set clear policies on what’s considered an acceptable T&E expenditure. This helps in preventing overspending and fraudulent claims, but it also means that employees have a clearer understanding of how the process of spending, documenting, submitting, and reimbursing works. 

Estimate future T&E spend

Estimate the upcoming period's expenses based on historical data and projected business growth. Remember to account for things like seasonal variations and planned business expansions. If you have expense software management in place, make sure it has a tool like Expensify’s Insights and Custom Reporting feature , which gives you a detailed, visual summary of company spending.

Allocate funds

Based on your estimation, allocate a specific amount for T&E in your budget, considering your business goals and financial constraints. Is it an important part of your business to wine and dine clients? Does your company employ events contractors nationwide, who need to be reimbursed for on-the-road expenses? 

Whatever it is, having a set budget in place makes sure you stay on target when it comes to expenses.

Monitor and adjust

Regular monitoring of your T&E budget is not just important; it’s necessary. When you know what’s being spent and where it’s going, you can adjust the budget to accommodate unforeseen changes or to optimize spending.

Implement a T&E expense management solution

Investing in an expense management solution to streamline the T&E process creates a system of checks and balances, and ensures policy compliance. Instead of guessing how to categorize business expenses , a good tool automates it for you so you don’t have to do the heavy lifting. 

Common T&E challenges

Almost every business has T&E expenses, but small businesses, in particular, face unique challenges when managing T&E.

Maintaining a clear T&E expense policy

It can’t be overstated: small businesses must have a clear T&E expense policy. Without it, ambiguity can lead to improper spending or compliance issues.

Solution: Implement clear and robust guidelines that outline allowable expenses and procedures for submissions.

Budgeting and monitoring T&E spend

Small businesses often struggle with forecasting and keeping T&E spending within budget, affecting profitability.

Solution: Use T&E expense management tools to track spending and understand trends for better forecasting.

Processing expense reports

Manual processing of expense reports is time-consuming and subject to human error.

Solution: Adopt automated expense management systems to streamline submissions and approvals.

Ensuring compliance and preventing fraud

T&E can be an area vulnerable to fraud and misuse.

Solution: Regularly audit expenses and educate employees on the importance of compliance to minimize risks.

Supporting a mobile and growing remote workforce

In a world where working from anywhere is starting to become the norm, access to T&E management tools on the go is essential.

Solution: Provide mobile-friendly tools, like Expensify, that allow employees to submit and manage expenses anytime, anywhere.

Manage T&E expenses with Expensify

Expensify simplifies the management of T&E spend, especially when it comes to tracking and controlling expenses. As a platform designed to ease the (often) daunting process of expense reporting, Expensify is a go-to solution for T&E expense management.

Key Features:

Automated expense reporting : Expensify automates the expense report creation process , saving time and reducing errors.

Receipt scanning : Snap and upload receipts using Expensify's mobile app, which automatically extracts relevant details.

Approval workflows : Customize approval workflows to align with your company's policies.

Reimbursements : Process reimbursements quickly, often within a single day.

Integration : Synchronize with accounting software for streamlined financial management.

With Expensify, you can maintain a balanced T&E budget by easily monitoring your T&E spend, ensuring compliance with company policies, and making expense tracking user-friendly for employees.

T&E expenses FAQs

What is a t&e transaction.

A T&E transaction is any financial activity that involves the costs of travel and entertainment related to business operations. As previously mentioned, these transactions typically include expenses incurred while employees are on business trips or hosting clients and may cover airfare, lodging, meals, client entertainment, and ground transportation.

Who are involved in the T&E process?

The T&E process usually involves several stakeholders within an organization:

Employees : They incur expenses while performing business-related activities.

Managers : Responsible for approving expense reports and ensuring they’re in line with company policies.

Accounting department : Processes reimbursements and maintains accurate financial records.

Auditors/Internal compliance : Ensures adherence to corporate policies and external regulations. The collaboration between these parties is crucial for effective T&E expense management.

What are T&E operating costs?

T&E operating costs are the day-to-day expenses that businesses incur as part of their travel and entertainment activities. These costs form part of the operational budget for companies with staff who travel or entertain clients regularly and can include:

Transportation (flights, trains, car rentals)

Accommodation (hotels, short-term rentals)

Meals and dining

Client entertainment

Miscellaneous travel-related expenses (e.g., WiFi charges, tips, parking fees)

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Nick Tooker joined Expensify in 2017. He currently leads Investor Relations for the company, while driving top-line growth as a member of the strategic marketing team. He was an integral part of Expensify's successful Initial Public Offering in 2021. Prior to Expensify’s IPO, Nick focused on growing relationships with the company's top partners such as: Netsuite, Xero, & Gusto.

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Business Travel Reporting Starts With Central Expense Management

It’s a new era for business, and that means it’s a new era for business travel. And against today’s backdrop, where every dollar of working capital matters, travel spend management is coming under renewed focus.

Managing travel expenses has long been a complex and time-consuming task for both employees and company finance departments. But it doesn’t have to be. 

PYMNTS sat down with  Edwin Poot  and  Jonathan Vaux , the global chief technology officer and head of propositions and partnerships, respectively, at Thredd , to get their thoughts on how recent innovations are set to revolutionize the way businesses handle travel expenditures. 

Traditional methods, which involve manual data entry and paper receipts, are being replaced by digital solutions that can automatically capture and categorize expenses. This not only speeds up reimbursement times but also minimizes the risk of human error, ensuring greater accuracy and allowing for real-time expense tracking and management.

“As with every technology company, we’re at the forefront of using tech ourselves and are using more solutions like automated expense applications, automated receipt scanning and categorization, etc.,” explained Poot, noting that despite the rise of mobile-centric tools for effortless receipt scanning and categorization, certain challenges around compliance and cost control remain. 

Vaux emphasized that while corporate solutions have progressed, they often lag behind consumer-centric solutions. Despite advancements, many employees still resort to personal tools for their travel needs, indicating a gap between corporate and consumer experiences.

“I find myself using technology more and more, but the experience is still disjointed and not consolidated,” Vaux said. 

By having all travel-related data in one place, companies can better analyze travel spend, negotiate with vendors and enforce compliance with travel policies. And while it is not here just yet, it is a future that’s being built on partnerships and innovations. 

Transforming the Corporate Travel Landscape

At the forefront of this transformation is the integration of artificial intelligence (AI) and machine learning into travel expense management systems. These technologies are not only automating the entire expense reporting process but also providing predictive analytics to help companies make more informed decisions about their travel policies and spending.

“Now, with AI in the landscape, there’s way more automation possible than before, not to mention the anomaly-detection aspects and predictability,” Poot explained, adding that hybrid and remote work have made travel expenses more complex. “There’s a huge gap between what makes it easier for me as a user, versus what makes it easy for the company.” 

He underscored the importance of strategic partnerships between ecosystem players and expense management providers to help streamline and consolidate travel spend management. 

The Ideal Expense Management Experience

“There’s a couple of key needs. One is obviously ease of data entry and reconciliation, where we are seeing pockets of innovation, for example, with businesses who use Thredd’s capabilities to replace checks with cross-border virtual cards,” Vaux said. 

But one of the “key challenges” is the fact that many of the incumbents are still using legacy infrastructure and traditional rails for payments.

“There are lots of great things about card rails, but you’re trying to force the message into the message structure of the card, as opposed to using separate data API processes,” Vaux said. “Fundamentally, a lot of the technology now exists that didn’t exist 20 years ago that could enable a more optimized experience.”

Looking ahead, both Poot and Vaux emphasized the role of AI and tokenization in driving innovation. Poot envisioned a future where payments become invisible, integrated seamlessly into everyday experiences. Vaux echoed this vision, emphasizing the potential of AI to streamline approval processes and enhance compliance.

However, both Thredd executives acknowledged the regulatory challenges associated with these advancements, emphasizing the importance of collaboration with regulators to ensure compliance while driving innovation.

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Travel and entertainment expense types.

For more information, click to expand each expense type.

Travel and entertainment.

Paid receipts are always required.

Airfare is used to reconcile out of pocket and Travel card airline ticket purchases.

Tickets purchased using the Preferred Booking Program account will automatically use expense type: Direct Billed Imported Expense.

• Airfare, Additional Fees

Awards are typically used in conjunction with Entertainment events, e.g. Service awards, trophies, or gift cards. When a non-cash award is purchased as part of an Entertainment event, ensure policies Bus-79 and G-41 are followed. Include the names of all award recipients in the expense report.

• Business Services

Use Business Services to claim the cost of ancillary business expenses associated with travel or entertainment. This includes services such as photocopies, faxing, parcel services, etc.

• Car Rental

Paid receipts are always required. See Best Practice: Renting a Car for more details.

Remember: Make ALL car rental reservations through BCD Travel to ensure the UC discounted rates and protections are applied to your car rental.

• Car Rental - Class of Service:
• 1. Compact/Economy/Intermediate 2. No Cost or Self Pay Upgrade (Use when traveler pays for their own upgrade) 3. Upgraded Service (When selected, report will automatically route for exception approval; submit required documentation)
• Car Rental - Vendor:
• 1. Hertz 2. Enterprise/National 3. Dollar/Thrifty 4. Other (Requires a comment)  
• Cash Advance Return

The Cash Advance Return is to record excess cash advance that was not utilized on the report. You will still be required to process a Cash Receipt document when returning the money to the University. Include a copy of the Cash Receipt document with the travel expense report.

Please note: this expense type is NOT used for Travel Card Cash Advances. See below for more information.

• Conference Registration

Use Conference Registration for reimbursement of the cost of conference, seminar, or lecture, etc. registration fees.

When submitting an expense report to pay your Travel card for conference registration for a group of individuals, the attendance list option should be used to identify the attendees.

• Currency Gain/Loss

The Currency Gain/Loss expense type is used when reconciling a cash advance used in a foreign location which gained or lost value against the dollar.

• Entertainment Deposit

Use Entertainment Deposit to account for deposits paid to vendors for events. Entertainment Deposit can be itemized.

• Employee Morale Event Entrance Fees

Employee Morale Event Entrance Fees are used when claiming reimbursement for the cost of employee morale activities. This should not be used for the purchase of show tickets for entertainment. Include the full names and affiliation of all attendees in the expense report.

• Entertainment Meal, 10 or Less Guests

When hosting a University Entertainment event for 10 or fewer guests, use this expense type to reconcile the cost of a meal. Use the attendance list within the expense to account for the people in attendance.

For more information on using the Attendance List feature within AggieExpense, please visit Attendees .

• Entertainment Meal, Over 10 Guests

When hosting a University Entertainment event for more than 10 guests, use this expense type to reconcile the cost of a meal. Use the attendance list within the expense to account for the people in attendance, or simply attach a list of the attendees to the report.

For more information on attaching documents to an expense report, please visit Receipts .

• Entertainment Supplies or Rental (AV, dishes, or other)

Use this for reimbursement of necessary items purchased for an event. Audio or Video Rental is most often used in conjunction with hosting a conference.

If a rental was purchased as part of a rental agreement, please include a copy of the rental agreement in the reimbursement expense report.

• Gas or Fuel

Gas or Fuel is not used in place of claiming personal vehicle mileage per  UCOP Travel Policy G-28 . Use the Gas or Fuel expense type when reconciling the purchase of gas or fuel for rental cars and other approved modes of transportation.

• Ground Transportation

Ground Transportation is used to reconcile all forms of ground transportation with the exceptions of rental cars and mileage claims.

Select Vendor Type: > Parking/Tolls > Taxi/Uber/Lyft > Shuttle Bus > Train/Light Rail/Rapid Transit > Other (Requires a comment)

• Laundry (Trip Over 6 Days)

If a trip lasts more than six days , laundry services may be approved for reimbursement. This expense can be added to lodging itemization, if the laundry was part of the lodging costs, or it can be claimed separately.

Use Lodging for typical lodging costs, including hotel, Airbnb, and other lodging facilities. This expense type requires an itemized receipt be submitted with the expense report, in addition to itemizing the nightly costs.

See Lodging-Other for Deposits, Host Gifts, and Long-Term Lodging.

• Lodging-Other

Paid receipts are always required. > Lodging, Deposit is used to pay for a lodging deposit. > Lodging, Host Gift is used to pay for a host gift, per policy G-28 . Receipts are required for host gifts of $25 or more and are limited to no more than $75 per host, regardless of the duration of stay. > Lodging, Long-Term is used for stays exceeding 30 days and may be entered as one amount for entire duration. Provide a comment including the dates of lodging.  

• Meals and Incidentals (incl. tips)

Meals & Incidental Expenses is used to claim the cost of meals and tips associated with travel. AggieExpense offers a quick-itemization feature to separate any personal or non-reimbursable expenses.

• Meeting Room Rental

Meeting Room Rental is most often used in conjunction with hosting a conference.

If the rental was purchased as part of a rental agreement, please include a copy of the rental agreement in the reimbursement expense report.

• Mileage - Google Maps

Use Mileage - Google Maps when entering a single trip or a multi-legged single day trip. The Google Maps mapping service is built directly into the expense type!

Note: Do NOT select the 'personal' check box within the Google Maps feature. Doing so will reduce your reimbursement by the miles marked personal.

• Mileage Log

Use Mileage Log to enter multiple trips, i.e. monthly or quarterly.

This expense type requires a mileage log. Complete the log and attach it with your receipts.

See the travel Forms page for the correct PDF form to use with this expense type.

• Miscellaneous

If there is not another more appropriate category to claim the expense under, use Miscellaneous.

• Personal or Non Reimbursable

When the travel card was used inadvertently for a personal charge or a portion of an expense is not being claimed, use expense type of "Personal / Non Reimbursable". 

The cardholder will need to pay back the University directly, as the card provider has already been paid. To reimburse the University, you will access your UC Davis Banner account where you will see the invoice for the charge appear a few days after your expense report has been approved. To process the reimbursement through Banner, go to  https://mybill.ucdavis.edu , log in with your campus user ID and Kerberos passphrase, agree to the consent form, and, finally, review your balance and select  Make Payment  from the main page.  Personal credit card and e-checks are accepted methods of payment.

• Show Tickets

Show Tickets is for the cost of tickets to a sporting, theatrical, or musical event furnished to a prospective donor or employee in connection with the conduct of official University business. Include the full names and affiliation of all attendees in the expense report.

All reports including Show Tickets will route for exception approval. 

• Student Program Entrance Fees

Student Program Entrance Fees are used when claiming reimbursement for the cost of programmatic or academic activities. This should not be used for the purchase of show tickets for entertainment nor for the purchase of passport or visa expenses. Include the full names and affiliation of all attendees in the expense report.

• Travel Supplies and Materials

Use Supplies and Materials for reimbursement of necessary items purchased while on travel status.

• Travel Agency Fees

Use Travel Agency Fees to claim service fees charged by travel agencies to make your travel reservations.

These fees do not include insurance of any kind.

Please note: tickets purchased using the Preferred Booking Program direct billing account will use expense type: Direct Billed Imported Expense.

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Reimbursable expenses.

• Non-Reimbursable Expenses
• How Per Diem is Calculated
• Foreign Flag Carrier Exemption
• Manual Travel Reimbursement Form
• Mileage and Per Diem Rates

In addition to air travel, ground transportation, hotels, and meals, the following expenses are generally reimbursable.

Airport and Other Parking Fees

Airport parking is payable/reimbursable when it is the most practical and economical option available considering the length of the trip. If you are on university business, you can use Cornell’s parking discount at the Ithaca Tompkins Regional Airport by showing your valid Cornell ID card at the gate when you exit.

Other reasonable parking fees will be reimbursed.

Alcohol is a federally unallowable expense but may be reimbursed under certain conditions, but only with non-sponsored funds. The purchase and use of alcohol may represent a legal exposure to an individual or institution. Some colleges or units may disallow reimbursement of alcohol purchases. Extra caution regarding alcohol should be taken when traveling with students. For more information, see University Policy 4.8, Alcohol and Other Drugs .

Business Entertainment

Business entertainment expenses include social events, performances, or sporting events when a business discussion takes place during, immediately before, or immediately after the event. You may be reimbursed for business entertainment expenses only when all of the following are true :

• You have prior approval from your college or unit.
• The people being entertained have a potential or actual business relationship with the university.
• The business discussion will benefit the university.

Detailed receipts are required for sufficient supporting documentation.

Entertainment expenses are not allowed on a federal grant or contract account and must be recorded as federally unallowable .

Conference and Registration Fees

To promote knowledge sharing and reduce costs, if multiple people from the same unit are traveling to attend the same conference, before traveling, you should consider the budget implications and discuss it with your budget manager or administrative office, as applicable. If the conference has an option to attend virtually, you should consider using that option instead of attending the conference in person, when appropriate.

You can pay for conference fees and registrations using your Travel & Meal Card. If you don’t have a travel card, you can ask your unit or service center representative to pay your fee on a unit card.

Dependent Care Costs for Faculty

Faculty members can apply for taxable compensation to cover the dependent care costs from the Faculty Dependent Care Travel Fund . All other dependent care costs are unallowable as business travel expense except in very limited circumstances provided for in sponsored awards.

Incidental Expenses

Incidentals are fees and tips to porters, baggage carriers, hotel staff, etc. Incidentals are included as part of the per diem rate. You may be reimbursed for incidentals when, over the course of a trip, the provided or group/business/hosted meal results in unrecovered incidentals because the incidental expense portion of the per diem has been reduced.

For domestic travel only , Cornell will pay/reimburse reasonable expenses for laundry services when it’s necessary that you be away from home for more than five consecutive workdays on business travel, or when unusual circumstances require these services. Receipts are required for laundry expenses greater than $75.

Note: Federal international per diem rates include laundry services and therefore laundry costs are not separately reimbursable.

Telephone and Internet Usage

Incremental cost of business calls and data are reimbursable, but not for basic coverage for personal cell or land phones. You must document the business purpose for long-distance calls.

You are expected to use the most economical or efficient means of accessing the Internet and using the telephone when travelling.

Reasonable tolls will be reimbursed. These charges are normally below the $75 receipt threshold. If the amount is not known, in many cases you can identify the charges using  www.platepass.com or on your NY E-ZPass account statement and then included in the initial reimbursement. 

Travel Disruption

You may be reimbursed for reasonable, allowable costs, resulting from travel disruption outside your control such as inclement weather, but if you carriers or other vendors offer refunds, meals, lodging, or transportation, you must use these before claiming such expenses. You must not claim reimbursement for expenses covered by the carrier or travel vendor. These costs may not be allowable on sponsored awards. Contact Sponsored Financial Services for assistance.

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Peter Dutton’s office billed taxpayers almost $6,000 for staff to travel with him when he attended Gina Rinehart party

Exclusive : Opposition leader travelled at own expense to lavish party, but documents reveal two staff also made the trip to Perth

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Peter Dutton’s office claimed nearly $6,000 in public expenses for staff and security to travel to Perth with the opposition leader when he attended Gina Rinehart’s lavish birthday party.

Dutton’s office has said he travelled at his own expense to the party for Australia’s richest woman , which included a horseriding performance, multiple large cakes and onstage pyrotechnics. But travel information obtained under freedom of information shows members of Dutton’s team – which his office said included a staffer and a security detail – claimed travel from Melbourne to Perth and back again on 29 February, the night of the party on the banks of the Swan River.

It was reported in March that Dutton attended Rinehart’s party after the end of a parliamentary sitting week, before appearing in Melbourne the next morning to campaign for the Dunkley byelection. The Australian Financial Review reported Dutton was spotted flying from Canberra to Melbourne, then travelling on to Perth before returning to Melbourne that same evening – potentially joining Rinehart’s party for as little as an hour.

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Dutton was criticised at the time by 2GB host Ben Fordham for choosing to fly to Perth instead of spending more time campaigning in Dunkley, calling the opposition leader’s decision “a bad call” and suggested he should have “brushed” the party to campaign more in the crucial byelection.

“Peter Dutton spent more time on the aeroplane than he did at the party, which sounds like a waste of time to me,” Fordham said.

Labor’s Jodie Belyea won the byelection against Liberal challenger Nathan Conroy by a 53-47 margin.

The Independent Parliamentary Expenses Authority (IPEA), the government body which manages parliamentarians’ work expenses, released information under FoI on Thursday to show Dutton’s office claimed flights between Melbourne and Perth on the day of – and the day after – Rinehart’s party. All were classified as having been claimed by “personal staff”, rather than Dutton himself. Guardian Australia understands that any claim for Dutton himself would have been recorded and classified differently on the documents.

IPEA records show staff from Dutton’s office claimed a Melbourne to Perth flight on 29 February, the day of the party, costing $2,221.63. The same day, staff also claimed a Perth to Melbourne air fare, at $2,680.80.

The following day, 1 March, was another staff claim for a Perth to Melbourne air fare at $1,028.93.

In total, the three air fare claims between Melbourne and Perth came in at $5,931.36.

Guardian Australia contacted Dutton’s office for clarification on the claims. A spokesperson responded that the opposition leader travelled with one staff member and his security detail, which they said was appropriate and within travel rules.

Dutton is typically accompanied in public by a security detail, as are other senior politicians like prime minister Anthony Albanese and deputy PM Richard Marles.

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Dutton’s spokesperson also referred back to his remarks in March, at the time of the initial reporting on his Perth trip.

“The air fares were at my expense, there was no accommodation. I flew back on the redeye so that I could be back into Melbourne at 4.30 the next morning,” Dutton said at the time.

“My security detail operates exactly the same as the governor general and the prime minister.”

The lavish celebration for Rinehart, according to her company’s websites, included “a horse show backed by the fantastic Aussie music, The Man from Snowy River, with riders … carrying large Australian and company flags”.

The Perth lord mayor, Basil Zempilas, told 6PR radio he attended the event, calling the horseback show “an incredible sight”, and saying the pop star Guy Sebastian had sung the national anthem.

Last year Dutton was flown to another Rinehart party at Hancock Prospecting’s Pilbara mine by another billionaire rich-lister , where he praised the mining magnate and her family as “pioneers” who had “given so much to this country”.

• Peter Dutton
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A deduction reduces the amount of a taxpayer's income that's subject to tax, generally reducing the amount of tax the individual may have to pay. Most taxpayers now qualify for the standard deduction, but there are some important details involving itemized deductions that people should keep in mind.

Standard deduction

The standard deduction is a specific dollar amount that reduces the amount of taxable income. The standard deduction consists of the sum of the basic standard deduction and any additional standard deduction amounts for age and/or blindness.

In general, the IRS adjusts the standard deduction each year for inflation. It varies by filing status, whether the taxpayer is 65 or older and/or blind and whether another taxpayer can claim them as a dependent.

Taxpayers cannot take the standard deduction if they itemize their deductions. Taxpayers can refer to Topic no. 501, Should I itemize?  for more information.

Itemized deductions

Some taxpayers choose to itemize their deductions if their allowable itemized deductions total is greater than their standard deduction. Other taxpayers must itemize deductions because they aren't entitled to use the standard deduction.

Taxpayers who must itemize deductions include:

• A married individual filing as married filing separately whose spouse itemizes deductions.
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Schedule A (Form 1040) for itemized deductions

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Taxpayers can review the instructions for Schedule A (Form 1040), Itemized Deductions, to calculate their itemized deductions, such as certain medical and dental expenses, and amounts paid for certain taxes, interest, contributions and other expenses. Taxpayers may also deduct certain casualty and theft losses on Schedule A.

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The Interactive Tax Assistant (ITA) provides answers to tax law questions based on a taxpayer's individual circumstances. It can help a taxpayer determine the answer to common questions, such as if they:

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The ITA can help taxpayers with these deduction-related questions:

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• How do I claim my gambling winnings and/or losses?
• Can I deduct my medical and dental expenses?
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