To meet these three requirements, you must maintain an "account book, diary, log, statement of expense, trip sheets or similar record" and "documentary evidence, such as receipts, paid bills or similar evidence." To do so, you must keep "adequate records" to determine: (1) the amount of the expense (2) the time and place it was incurred and (3) the business purpose of the expense. Under the IRS regulations, you have to "substantiate" your travel expenses. Unfortunately, those rules are stricter for travel and entertainment expenses than they are for any other kinds of business expenses. Therefore, you have to rely on the rules for travel-expense deductions for all businesses. Those regulations have no special category for travel advisors. What counts are the IRS regulations governing travel-expense deductions. ![]() Shouldn't those travel expenses be deductible?Ī: In my opinion, they should be deductible for the reason that you cite, but my opinion does not count for anything. Those expenses enable me to better advise clients, and my reputation and income are thus enhanced. After all, I travel to learn about destinations and travel suppliers, such as airlines and resorts. That struck fear into me because, like everyone else I know who sells travel, I deduct my travel expenses against my travel business income. Q: A colleague who owns a small, home-based travel agency told me that the IRS is challenging all the travel expenses claimed on his tax return.
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