Year-end ’08 tax strategy: Re-route your travel plans — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Year-end ’08 tax strategy: Re-route your travel plans

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Your company can deduct the travel expenses of its employees—including the owner—related to its business activities. Example: You might visit a client 500 miles away to pitch a business deal. In that case, you can write off the travel expenses such as air fare, lodging and 50% of your meal costs.

Strategy: Change the schedule of trips planned for early next year. If you take extra trips in December, you’ll increase your business travel deduction for 2008. Note: Any unreimbursed travel expenses of an employee can be deducted only as miscellaneous itemized expenses, subject to the usual 2%-of-AGI limit.

If you travel by car, you can write off the actual expenses—including depreciation subject to the “luxury car” limits—or claim the standard mileage deduction. Update: The standard mileage rate of 50.5 cents for 2008 has been raised to 58.5 cents for business driving during the last six months of the year.  

Tip: Use an “accountable plan” for travel expenses. As long as expenses as income are properly accounted for, employees don’t have to report expenses or reimbursements on their tax returns.

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