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Deducting Travel And Entertainment Expenses – The Ultimate Guide
 

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.

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 Deducting Travel And Entertainment Expenses – The Ultimate Guide Presentation Transcript

    • 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 obtaining a deduction for these expenses, and then the amount you can deduct is often reduced by half.
    • “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 entertainment expenses (including meals) are directly related to, or associated with conducting trade or business.
    • 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 program.
    • Transportation You can deduct trips between the airport or station and your hotel, and between the hotel and temporary work location.
    • Baggage and Shipping Any baggage, samples, or materials sent between your regular place of business and temporary work location are deductible.
    • 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 needed to drive 8 hours to a meeting, the lodging would be necessary.
    • 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 you would feel uncomfortable defending the expense in an audit then it is probably lavish and extravagant.
    • 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 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.
    • 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 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.
    • 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.
    • 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 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.
    • Entertainment
    • 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.
    • 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 conduct business.
    • “associated” Means that the entertainment is associated with business, and takes place directly before or after a substantial business discussion.
    • NO double dipping is allowed And if you deduct the cost of meals as a meal expense, you cannot deduct it again as entertainment.
    • Travel Deductions For Your Employees
    • Travel Deductions Employees are reimbursed for business related travel on either an accountable plan, or no accountable plan.
    • 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 must reimburse them within 120 days after the expenses were paid or incurred, which constitutes a “reasonable period of time” to the IRS.
    • 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.
    • And Finally...
    • To learn how to simplify the process of running your business visit us at....
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