The Tax Cuts and Jobs Act recently passed has a significant impact on Meals and Entertainment and how you need to track these expenses.  I highly recommend a program such as Hubdocs to track your receipts and automate the process.  The following are required tracking by the IRS:

  • You must track the costs for each separate expense and mileage for car business use, including total miles for the year; date of each expense and dates you left/returned for each trip; destination, area, location of place (name/address), and business purpose.
  • For entertainment, the name and address of the vendor, nature of the business discussion/activity, duration, identities of the persons who participated, relationship of each person (occupations, titles, etc.) and you must prove that you or your employee(s) were present if the entertainment was a business meal.

Traveling Away from Home

  • Required to be away from the general area of your tax home longer than an ordinary’s day’s work, and
  • You need to sleep/rest to while away from your tax home.  Napping in your car does not meet this requirement.
  • Tax home is your regular place of business and includes the entire city or general area of your main work location or where you regularly live if you do not have a regular/main place of business.
  • If you do not have a regular tax home (no steady location), you cannot deduct travel expenses since wherever you work is your tax home.