Business Tip: Claiming Travel Expenses

Business TipOver the weekend, I bumped into a gentleman I had met a few months earlier at a market. Like me, he makes and sells his own soap. We talked about business, and the tax man soon came up.

Obviously no one likes the tax man whether you’re making lots of money, no money, claiming everything and being honest or hiding things and being a crook. That’s just the way things go. For most of us, taxes mean piles of paperwork that is not always comprehensible.

Still, we plough on and learn what it takes to please the tax man.

In this conversation we discussed gas, travel expenses and how to claim them in a manner acceptable to the tax man. The gentleman asked me if I knew I had to keep a log of the travel miles on the vehicle used in a business. Because if there is no log, travel expenses in that vehicle can’t be claimed: No log = No claim.

In the tax man’s eyes, you could have flown with your wings to markets and other places with your product on your back. Or you could have walked with 50 pounds of soap on your shoulders. Or you might have some kind, generous person drive you everywhere for free.

Coming Soon: "Throw Away Kitten" by Candy McMudd. A story about two children who work together to save kittens.
Coming Soon: “Throw Away Kitten” by Candy McMudd. A story about two children who work together to save abandoned kittens.

To prove you used the vehicle for business-related travel, you must keep a log and record the odometer readings with each trip. The date must also be included. A brief note of destination can also be included for clarity. One of these pocket books can be picked up for a few dollars (which you can claim).

I knew this was the rule for claiming travel expenses when owning a business only because I had taken a business course. He didn’t learn this lesson until this year—during an audit—after a few years in business. This meant he had to un-claim the travel expenses for previous years.

So get a log book, keep your gas, repair and other maintenance receipts and claim the correct percentage on your taxes.

Better yet, if you are or planning to run a self-publishing business, take a course in basic business. Consider it an investment.

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3 thoughts on “Business Tip: Claiming Travel Expenses

  1. How how I know the tax man. Since I began self publishing (two years ago) I’ve been claiming expenses as a write off against my profits that are less than write offs. Well I have recently been informed I’m being audited. I’m drowning in receipts and paperwork that all support my claims. But nonetheless, it’s a pain in the #$#@ doing all this work for non profit. 🙂

    • Oh my, audited. It’s like the dreaded activity everyone fears. Well, not fears, but dislikes because, as you’ve mentioned, the drowning in receipts and paperwork.

      What I dislike the most are those receipts that fade over time or the ones where the ink vanishes. No receipt means no claim. This year I’m photocopying all store receipts because I fear that if I ever need to refer to them, the ink will have vanished.

      I’ve heard from several people who operate small businesses out of their home who are being audited. It must be the year to impose on individuals whose income is piddly compared to huge corporations. It always amazes me that the government would spend thousands of dollars and resources to find out if the ten-dollar meal an entrepreneur who makes $5,000 from their home business claimed was really worthy of claiming.

      Good luck with the audit. I hope it over quick and painlessly.

      • Wow Di, you hit the nail on the head! They have nothing better to do than investigate the small potatoes while the corporate sharks get away.
        And great idea about photocopying. That’s what I actually spent the last 2 DAYS doing! My accountant suggested I do that in case receipts get lost in the mail. Sheesh, it’s sucking up my revision time. 😦

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