Start with the purpose and itinerary
Before you leave, write one paragraph: where, when, and why. Name the conference, client site or supplier. Save the agenda, registration confirmation, calendar entries and any invitation. These documents are the strongest evidence of business purpose, and they cost nothing if you save them as you go.
If the trip is longer than the business activity needs, note which days were business and which were personal.
Collect the cost documents
Airfare or train receipts, rental car agreements, hotel folios, parking, tolls and ride share receipts all belong in the file. For hotels, ask for an itemized final folio, which lists room, taxes and incidentals separately. A card statement line is not the same as an itemized bill.
Tips and small cash costs, such as baggage handling, should be written in a notebook or phone note on the day.
Mixed business and personal trips
When a vacation is attached to a work trip, the expenses must usually be split. Transportation to the business destination may be handled differently from lodging on personal days. Keep a day-by-day schedule showing what was business and what was not, and give it to your preparer.
Costs of a spouse or family member traveling along are generally personal unless there is a business reason. Raise it with the preparer rather than burying it.
Meals while traveling
Keep these separate from client meals in your books. Some tax methods allow a standard daily amount instead of receipts for traveling meals, but that is a choice to discuss with your preparer, because it affects what you need to keep. Do not combine meal methods inconsistently.
Foreign trips add currency conversions. Record the date and the rate used, and keep the card statement showing the actual charge in dollars.
Build a trip file
Create one folder per trip, containing the purpose note, agenda, receipts and a small summary table with totals by category. After the trip, enter the totals into the books under travel, meals and other proper categories. Reimbursements from clients should be recorded separately so the expense and the recovery both appear.
Employees who travel should submit reports the same way. A consistent template across the company helps everyone.
Common travel record mistakes
The usual errors are saving only the booking confirmation and not the final receipt, forgetting to record the business reason, combining personal and business days without a schedule, and recording the whole trip in one category called Travel. Splitting the total into transport, lodging and meals gives the preparer something to work with.
Another mistake is paying for a companion's costs with the business card and leaving them in the totals. Move those into a personal account straight away.
Worked example with numbers
A three-day trip: flight $420, hotel $540 for 3 nights, ground transport $85, meals $150, plus a note stating the purpose (client workshop on March 10-12) and the itinerary. If one day was personal, allocate that day's lodging and meals out. Keep each receipt and a one-page trip summary.
Mistakes that cost money
No stated purpose. Mixing personal days. Lost receipts. Meals with no explanation of who attended.
Check your work
Total the trip file and tie it to the card statement.
Common questions
Do I need to save boarding passes?
They help prove dates and destinations, though a booking confirmation also does. Keep whichever you have.
What if the client reimburses my travel?
Record the expense in travel and the reimbursement in the appropriate account. Ask your preparer how it should show on the return.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.