Deductions for employee travel expenses are allowed if they are related to business activities. For instance, if you visit an out-of-state client, the cost of the travel—including air fare, lodging and 50% of your meals—is deductible.
Strategy: Accelerate business trips planned for January into December. This enables you to write off the travel expenses in 2009 instead of waiting until 2010. Note that unreimbursed employee travel expenses must be deducted as miscellaneous expenses on your personal return (subject to the 2%-of-AGI limit).
If you travel by car, you can deduct the actual expenses, including depreciation, or use the standard mileage deduction of 55 cents per mile (plus tolls and parking fees) for 2009. Depreciation deductions for business cars are limited by the “luxury car” rules.
As long as an adequate accounting is made, employees don’t have to report reimbursed travel expenses on their tax returns.
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