Unreimbursed Employee Business Expenses

In order to support the deduction of your employee business expenses, you must:

Keep a log of the date, destination & mileage, purpose, and client for each business trip
Keep copies of receipts for parking, tolls and transportation (air, train, bus and taxi)
Keep copies of receipts for business meals and entertainment
Keep copies of receipts for all miscellaneous business expenses

Travel, Meals & Entertainment Expenses

Travel, meals, and entertainment expenses draw close attention from the IRS under examination. Entertainment expenses must be ordinary and necessary, and common practice for the type of industry. The following information may be required:

Dates and duration of business discussions that took place
Nature of the business conducted
The business benefit derived or expected to be derived
Identification of the person(s) entertained
Whether the site of the meeting was vacation oriented

Required rules to deduct meals & entertainment

Amount of the expense
Time and place of event or use
Business purpose
Business Relationship

Business Use of a Vehicle

Keep adequate records (receipts) for business use of a vehicle. Under audit, substantiating business use of a vehicle requires keeping a log of:

Dates of business trips (when)
Client (who)
Destinations - location and miles (where)
Purpose of the trips (why)
Odometer readings
Parking, tolls, etc.

Remember: Employee business expenses meet all of the following requirements: Ordinary, necessary, reasonable, actually incurred and directly related to your position.

* You can print out a worksheet from our website that will help you keep track by clicking here.