As a small business owner, you may occasionally need to take a business trip or send your employees on one. While you shouldn’t travel frivolously, you also shouldn’t hesitate to travel in cases where it may benefit your business. This includes conferences and conventions, meeting with prospective clients, attending out-of-town training sessions or networking events, and similar types of activities. As you plan these trips, keep the following tips in mind.
Strategies for Saving
If you travel relatively infrequently, use travel websites such as Travelocity or Flight Centre to help you find deals. If you travel on a regular basis, join a loyalty rewards program for frequent travelers. For example, instead of taking a different airline each time you fly, take the same airline and reap frequent flyer miles. Similarly, always try to stay at the same hotel chain and use its loyalty rewards program. This approach saves you time – you don’t have to look for new airlines or accommodations for each trip. In some cases, you may spend more on each individual journey than you would have if you took the time to find a great deal. However, the overall savings you earn through the rewards programs helps to smooth out the difference. Also explore other strategies for saving money, such as shopping for meals at local grocery stores instead of eating in restaurants or having employees share hotel rooms instead of having their own rooms.
The Canada Revenue Agency allows you to claim a business deduction for the cost of business-related travel. In particular, you may write off 100% of public transportation fares and hotel accommodations, but you may only write off 50% of the cost of food or entertainment. Similarly, if you pay for your employees to travel, you may deduct the same expenses on your tax return. In addition, if you travel to a convention, you may write off the convention fees up to twice per year. If you require your employees to travel and cover their own expenses, they may write off these expenses on their personal income tax returns using Form T777. However, you must fill out a Form T2200 stating that you require your employee to incur these costs as part of their jobs.
To make these claims on your tax return, you need to have records and receipts of your expenses. Whether you are travelling on your own or sending your employees out into the world, consider utilizing an expense-tracking app. Depending on the app you select, you may be able to take a picture of receipts, track mileage with GPS, upload receipts, or perform other functions that make it easy to organize your travel expenses. Choose an app with the features that meet your specific needs. For example, if you want employees to pitch travel ideas and submit purchase order requests, you need an app that can facilitate that. Similarly, if you want to track travel spending, look for an app that can generate those types of reports.