FinanceRegs.com » Extra day of ‘business’ travel: A hidden T&E trap?

Extra day of ‘business’ travel: A hidden T&E trap?

August 5, 2008 by Carol Katarsky
Posted in: Best practices, In this week's e-newsletter, Latest news & views, T&E

Lately, more biz travelers have started heading out a day earlier to snag cheaper airfares. Is that a problem for T&E processing? It’s cheaper in the long run, but what does it mean for your T&E processing and IRS compliance? If a traveler adds an extra day (usually airlines require a Saturday night stay for the cheapest rates) it’s OK for you to reimburse the employee’s lodging and meals for the “extra” day.

One catch: The cost of the extra expenses must be less than your company would’ve paid for the non-bargain airfare. In other words, if the cheaper day’s flight only saves you $100 and you’ll pay an average of $200 for hotel, meals, etc., the extra day’s expenses aren’t deductible for your company. (Not to mention, your employee isn’t really saving you any money.)

Another common question: If the employee flies out early and spends the day taking in the local sites and not doing any business at all, is it still a deductible business expense?

In this case, yes. Just be sure tickets to the distant city’s ballpark or art museum don’t make their way into the employee’s expense report — just meals and lodging are deductible business expenses.

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One Response to “Extra day of ‘business’ travel: A hidden T&E trap?”

  1. Mineo Hoshi Says:

    Thank you very much for valuable information. I would like to know how to print for Tax scheduling overall one. ? If you could share for me , I can share with my accounting personnel and HR dep.


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