Can you claim travel expenses when you run your business as an S corporation? There are a few things that you should keep in mind if you are considering doing this. You are an employee of your S corporation, and this entity is separate from you. Thus, you can acquire expenses and be reimbursed for them. So, how does this work? Here’s what you need to know.
Should you claim the expenses as employee business expenses?
Some people assume that they can simply claim their travel expenses as employee business expenses. In fact, this is not a good idea at all. These expenses aren’t deductible unless you seek reimbursement, and you also won’t benefit if you qualify for the alternative minimum tax. Thus, this isn’t the best way to approach claiming your travel expenses.
How can you be reimbursed for your travel expenses?
If you want to claim travel expenses, the best approach is simply to submit an expense report to the S corporation you work for. Not only will you be reimbursed, but the corporation will also deduct those costs. As a result, your travel expenses will be essentially tax-free. It’s important to make sure that you are being reimbursed for the total amount of your travel expenses, so that none of your reimbursed income will be taxable.
Are you looking for assistance in preparing your taxes this year? The Royce CPA Firm can provide you with the business services you need. If you have any questions about claiming the proper deductions on your taxes, we’ll be happy to answer them for you. If you’d like to schedule an appointment at our Tucson office, give us a call at (520) 321-4626 today.