Substantiating Travel, Meals & Entertainment Deductions

Documentation is critical to substantiating business expenses. The documentation should contain (1) amount of each separate expense; (2) date and place; (3) Business purpose/benefit gained or expected to be gained; (4) business relationship to the taxpayer of the persons present.

Written receipts are required for all lodging expenses as well as travel and entertainment expenses exceeding $25. Credit card statements do not qualify as a written receipt.

Fraud Prevention Tip - Require employees to submit original receipts for reimbursement. If the employer accepts a copy of the receipt, the company becomes vulnerable to reimbursing the employee multiple times for the same expense.

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