At this point in time, business travel is less common than it used to be. I have a hunch that it will never return to pre-pandemic levels, as employers found it easier and less expensive to accomplish this through Zoom. It’s still important to know the ins and outs. Today we will cover how to ask for reimbursement of travel expenses.
What are travel expenses?
Travel expenses occur when an employee travels for business purposes. A business trip can include conferences, business meetings, client meetings, training, job fairs, etc. One thing about travel expenses, is you need to be sure you’re getting the best jet card program. You want to get as many points or cash back rewards as possible.
Travel expenses include lodging, food, rental car, tips for servers and bellhops, etc. Most organizations that require employees to travel on a regular basis have policies in place.
If an employee is traveling for an extended period of time or is at a particular location for an extended stay, the business may also include reimbursement to pay for your family to visit.
When entertaining a client or a business partner, there are limits on entertainment expense reimbursement, so make sure you check your company’s guidelines so you don’t breach that threshold.
How do employees pay for travel expenses?
Company credit cards, personal credit/debit cards, cash, or allowances given by the employer.
How to ask for reimbursement of travel expenses
If the corporate policies are unclear about the process, write a letter first. Before you go on a trip or take a client out for lunch, request the payment of the expense, or at least ask for some information about what is covered, what isn’t, and what the limits are. Establishing communication upfront is very important.
Per diem, aka travel allowance or an expense account, is recognized by the IRS. Per their guidelines, your expense report is due to your employer (usually HR) within 60 days. The report should include dates, location(s), and receipts.
If you have any allowances or advancements that haven’t been used or can’t be justified as a business expense, then you must return that to your employer. If you don’t return it, that money can be classified as taxable income.
As I said in the opening, I don’t believe business travel will return to pre-pandemic levels, but it’s important to know what travel expenses are and how to ask for reimbursement of travel expenses.
Review your company’s business travel policy for more information, and if your company doesn’t have one, speak to them about what’s covered, what’s not covered, and any limitations.
**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com
My name is Jacob Sensiba and I am a Financial Advisor. My areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. Please feel free to contact me at: email@example.com