Tax Deductions for Your Corporate Transportation Travel Expenses
The end of tax season is coming up fast, and that means getting all the business expenses tallied up and ready for deduction. Have you considered adding your transportation services to the list? Some of these services do qualify for deduction, including our Maui corporate transportation services, if you used us for business travel. Some people still think of Maui in terms of corporate retreats only, but more and more business-related events are being held on the Valley Isle. For example, the upcoming Maui Energy Conference is bringing industry experts from all over the world to address Hawaii’s energy future. As you can imagine, these events make our lives very busy! Unfortunately, some folks don’t know all the ins and outs of deducting travel expenses, which can make a substantial difference, whether you’re in charge of a large corporation or a small business.
As we stated, deducting Maui corporate transportation starts with the requirement that you used those services for business reasons (which is true anywhere you go). That umbrella may be wider than you expected. So what does, and doesn’t, apply as business-related travel expenses? Some are straightforward, while others require specific circumstances.
For example, you can’t deduct travel expenses if they’re just for you to go out and do something fun, like spending a night out on the town. However, if you’re entertaining clients, then yes, you can deduct the transportation expense. Here are some examples for applicable business-related deductions.
Tax-Deductible Maui Transportation Services:
- Transportation to and from conventions
- Travel to and from the airports
- Travel between airports and hotels
- Trips between hotels and business-related destinations
- Tips provided to transportation services
- Temporary work assignment trips
- Entertainment trips, if the trip involves at least one client
How extravagant can you get with these expenses? Limousine services require special conditions as well. You could engage our Maui limousine bus and deduct the cost, but you must be traveling with clients to or from a conference or some other work-related event. If the limo is being used while entertaining your client(s), then your will most likely need to put it down under a different category: entertainment deduction. The difference is substantial, because you can only deduct 50% of your entertainment expenses, while you can deduct 100% of your travel expenses.
Since we listed the situations where your transportation deductions apply, we will also talk about situations that you want to avoid, so you don’t have trouble with the IRS. Fortunately, there aren’t many of these to look out for.
- Travel expenses within your “tax home” (the city or area of your main office)
- Travel expenses with no receipt to account for it
- Any travel expenses that have been reimbursed by your employer
Once the year is over, and you’ve collected all receipts and various other records of your travel expenses, the next step is to get started with your filing process. That means itemizing the expenses for the IRS, so each can be checked and verified if necessary. This is one of those times when good record-keeping really pays off.
What about bringing family members on my business trip? What can I deduct then? If your family member is a shareholder or employee of the same business, the above guidelines apply to both of you. If not, you will need to handle things differently. Let’s say you bring your spouse with you on a business trip. If you were to rent a car during your trip, you could deduct that expense because you needed that car regardless of whether or not your spouse was in it with you. You will only be able to deduct your plane ticket, however, not your spouse’s. Hotels increase the charge based on the number of people in the room, so you could find out their single-rate and only deduct that. You would not be able to deduct the remainder. Again, this applies to business-related travel, not vacationing. If you spend five days that are business-related and add one day of fun at the end, you would simply deduct the expenses of the first five days, but not the last day.
Not sure where to start itemizing? We can point you in the right direction. Use Form 2106 or Form 2106-EZ to calculate all of your deductions. Once you’ve done that, you will need to put your calculations into Form 1040. This form includes different schedules for different types of employment, but don’t be daunted. This is very simple. If you’re an employee, you will want to fill out Schedule A (refer to line 40). If you are self-employed, fill out Schedule C (refer to line 12). For more information right from the source, you can visit the IRS Business Travel Expense page. This will help you figure out the other kinds of expenses you can deduct as well.
If you need Maui transportation services, contact us and we’ll collaborate on the best options for your specific needs. Why book with us? Not all transportation services are fully certified for commercial transportation. We are. Not all services provide all custom bookings. We do. Not all have a CEO/Owner who personally evaluates the manifest of each and every client. We do. Not all transportation services give you rates that include the taxes and fees, so there are no surprises at the end. We provide you with an all-inclusive quote right up front. If you need our assistance, you’ll find our contact information at the bottom of the page. Mahalo!