Deducting

Travel And
Entertainment
The Ultimate Guide

by FitSmallBusiness.com
You can:

“Write Off”

all your business travel and
entertainment expenses.
You can:

“Write Off”

all your business travel and
entertainment expenses.
But there are certain rules involved with obta...
“Ordinary AND
Necessary”
“Ordinary AND
Necessary”
Two basic words about travel and
entertainment deductions.
Ordinary expense

Is one that is common and
accepted in your industry.
Necessary expense
Is one that is helpful and appropriate for
your trade or business.
Necessary expense
Is one that is helpful and appropriate for
your trade or business.
Generally, you also must show that
en...
What Can you
Deduct?
Transportation
Airline, train or bus tickets,
as long as they were not
paid for using frequent
traveler miles or a similar...
Transportation
You can deduct trips
between the airport or
station and your hotel, and
between the hotel and
temporary wor...
Baggage and Shipping

Any baggage, samples, or materials sent between
your regular place of business and temporary work
lo...
LODGING AND
MEALS
LODGING is deductible,
as long as it is necessary for you to
sleep or rest to perform your
duties.
LODGING is deductible,
as long as it is necessary for you to
sleep or rest to perform your
duties.

For example, if you ne...
MEALS Money spent
for food, beverages, taxes and

tips. They cannot be, in the words
of the IRS:

“lavish or extravagant.”
“lavish or
extravagant”

This determination is made based
on the facts and circumstances.
“lavish or
extravagant”

This determination is made based
on the facts and circumstances.

A good rule of thumb is that if...
For

MEAL Expenses cost,
You can use either the actual

or standard meal allowance.
For

MEALS Expenses cost,
You can use either the actual

or standard meal allowance.

The standard meal allowance for most...
For

MEALS Expenses cost,
You can use either the actual

or standard meal allowance.
For

MEALS Expenses cost,
You can use either the actual

or standard meal allowance.

The standard meal allowance for most...
For

MEALS Expenses cost,
You can use either the actual

or standard meal allowance.

The standard meal allowance for most...
For

LodgingasExpenses no
Use actual expenses, there is

standard allowance available.
For

LodgingasExpenses no
Use actual expenses, there is

standard allowance available.

However, if you wish to combine me...
Entertainment
In order to deduct

entertainment Expenses,

You must show that the main purpose of
the expense was to conduct business, t...
The entertainment

must be necessary and ordinary,
and it must meet the

“directly related”
and “associated” tests.
“directly related”
Means that the entertainment takes place in a clear
business setting, and the main purpose is to conduc...
“associated”

Means that the entertainment is associated with
business, and takes place directly before or after a
substan...
NO double dipping
is allowed And if you deduct the cost of meals

as a meal expense, you cannot deduct it again
as enterta...
Travel
Deductions
For Your Employees
Travel
Deductions

Employees are reimbursed
for business related travel on
either an accountable
plan, or no
accountable p...
Under an

accountable Plan

Your employees account for expenses through receipts
and documentation within 60 days.
Under an

accountable Plan

Your employees account for expenses through receipts
and documentation within 60 days.

You mu...
Under a

Non-accountable Plan
The employer reports the reimbursements as wages on
Form W-2. Any combined payment of wages ...
And Finally...
To learn how to
simplify the process of
running your business
visit us at....
www.FitsmallBusiness.com
Thanks for watching
www.FitsmallBusiness.com
Thanks for watching

Click here to tweet this
presentation.
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Deducting Travel And Entertainment Expenses – The Ultimate Guide

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In today's presentation we are going to guide you on how to deduct Travel and Entertainment Expenses for your business. So lets get started.

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Deducting Travel And Entertainment Expenses – The Ultimate Guide

  1. 1. Deducting Travel And Entertainment The Ultimate Guide by FitSmallBusiness.com
  2. 2. You can: “Write Off” all your business travel and entertainment expenses.
  3. 3. You can: “Write Off” all your business travel and entertainment expenses. But there are certain rules involved with obtaining a deduction for these expenses, and then the amount you can deduct is often reduced by half.
  4. 4. “Ordinary AND Necessary”
  5. 5. “Ordinary AND Necessary” Two basic words about travel and entertainment deductions.
  6. 6. Ordinary expense Is one that is common and accepted in your industry.
  7. 7. Necessary expense Is one that is helpful and appropriate for your trade or business.
  8. 8. Necessary expense Is one that is helpful and appropriate for your trade or business. Generally, you also must show that entertainment expenses (including meals) are directly related to, or associated with conducting trade or business.
  9. 9. What Can you Deduct?
  10. 10. Transportation Airline, train or bus tickets, as long as they were not paid for using frequent traveler miles or a similar program.
  11. 11. Transportation You can deduct trips between the airport or station and your hotel, and between the hotel and temporary work location.
  12. 12. Baggage and Shipping Any baggage, samples, or materials sent between your regular place of business and temporary work location are deductible.
  13. 13. LODGING AND MEALS
  14. 14. LODGING is deductible, as long as it is necessary for you to sleep or rest to perform your duties.
  15. 15. LODGING is deductible, as long as it is necessary for you to sleep or rest to perform your duties. For example, if you needed to drive 8 hours to a meeting, the lodging would be necessary.
  16. 16. MEALS Money spent for food, beverages, taxes and tips. They cannot be, in the words of the IRS: “lavish or extravagant.”
  17. 17. “lavish or extravagant” This determination is made based on the facts and circumstances.
  18. 18. “lavish or extravagant” This determination is made based on the facts and circumstances. A good rule of thumb is that if you would feel uncomfortable defending the expense in an audit then it is probably lavish and extravagant.
  19. 19. For MEAL Expenses cost, You can use either the actual or standard meal allowance.
  20. 20. For MEALS Expenses cost, You can use either the actual or standard meal allowance. The standard meal allowance for most locales in the US was $46 in 2012, and includes meals and incidental expenses such as tips given to porters, baggage carriers, and hotel staff.
  21. 21. For MEALS Expenses cost, You can use either the actual or standard meal allowance.
  22. 22. For MEALS Expenses cost, You can use either the actual or standard meal allowance. The standard meal allowance for most locales in the US was $46 in 2012, and includes meals and incidental expenses such as tips given to porters, baggage carriers, and hotel staff.
  23. 23. For MEALS Expenses cost, You can use either the actual or standard meal allowance. The standard meal allowance for most locales in the US was $46 in 2012, and includes meals and incidental expenses such as tips given to porters, baggage carriers, and hotel staff. More Information on per diem rates is available here.
  24. 24. For LodgingasExpenses no Use actual expenses, there is standard allowance available.
  25. 25. For LodgingasExpenses no Use actual expenses, there is standard allowance available. However, if you wish to combine meals and lodging, there is a federal per diem rate. The rates differ according to locale and US rates can be found in IRS Publication 1542.
  26. 26. Entertainment
  27. 27. In order to deduct entertainment Expenses, You must show that the main purpose of the expense was to conduct business, that business was conducted during that period, or future business was expected as a result of the meeting.
  28. 28. The entertainment must be necessary and ordinary, and it must meet the “directly related” and “associated” tests.
  29. 29. “directly related” Means that the entertainment takes place in a clear business setting, and the main purpose is to conduct business.
  30. 30. “associated” Means that the entertainment is associated with business, and takes place directly before or after a substantial business discussion.
  31. 31. NO double dipping is allowed And if you deduct the cost of meals as a meal expense, you cannot deduct it again as entertainment.
  32. 32. Travel Deductions For Your Employees
  33. 33. Travel Deductions Employees are reimbursed for business related travel on either an accountable plan, or no accountable plan.
  34. 34. Under an accountable Plan Your employees account for expenses through receipts and documentation within 60 days.
  35. 35. Under an accountable Plan Your employees account for expenses through receipts and documentation within 60 days. You must reimburse them within 120 days after the expenses were paid or incurred, which constitutes a “reasonable period of time” to the IRS.
  36. 36. Under a Non-accountable Plan The employer reports the reimbursements as wages on Form W-2. Any combined payment of wages and reimbursement must be specified.
  37. 37. And Finally...
  38. 38. To learn how to simplify the process of running your business visit us at....
  39. 39. www.FitsmallBusiness.com Thanks for watching
  40. 40. www.FitsmallBusiness.com Thanks for watching Click here to tweet this presentation.
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