Business Entertainment Expenses

Closely related to meal expenses are business entertainment expenses.  Both are subject to a 50% reduction in the deductible amount. And, both are subject to the same substantiation requirements; that is, the taxpayer is required to have a receipt documenting the entertainment expense, the individuals entertained, the date and amount spent, and the business purpose[…]

Home Office Deduction

In tax year 2010 nearly 3.4 million taxpayers claimed deductions for the business use of a home, the familiar “home office deduction”.  Completing Form 8829 can be time-consuming and requires the taxpayer to keep copies of utility statements, insurance bills and the like to substantiate the expenses deducted.  In an effort to streamline tax compliance,[…]

Per Diem Rates for Travel Expenses

If you incur travel expenses, you may either keep your receipts for meals and lodging and other expenses, or you may use the per diem rate.  Per diem rates are updated on an annual basis and are available online at www.gsa.gov/perdiem.   The per diem method for lodging and meals & incidentals is permissible for employees[…]

More on Travel Expenses: Itinerant taxpayers

A taxpayer is an itinerant if he lacks both a principal place of business and a permanent residence.  As discussed in another post, a taxpayer’s “home” is considered to be located at his regular or principal place of business.  If he has no regular place of business due to the nature of his trade or[…]

Business Travel Expenses

In general, to qualify as a travel expense deduction, the purpose of the trip must be connected with a trade or business or be employment related AND the taxpayer must be away from his tax home overnight, or for a sufficient duration as to require sleep or rest, before returning home.  Determining the purpose of[…]

More on the American Taxpayer Relief Act

There are many provisions the American Taxpayer Relief Act (ATRA) extended.  Of particular note to folks who live in Texas and other states without a state income tax, the election to claim an itemized deduction for state sales tax in lieu of state income taxes was extended through 2013. Prior to passage of the new[…]

2012 Year End Tips for Small Businesses

Although we are not sure what Congress will do in 2013, here are a couple of tax saving suggestions small business owners would be wise to consider. Acquiring depreciable assets If you have been considering acquiring additional equipment, you should do so before year end.  The Section 179 expensing provision in 2012 allows taxpayers to[…]

More on Mileage

The IRS classifies all car usage into three categories:  business, commuting, and personal.  “Business  use” miles generally means travel between two business destinations.  Examples of trips that are deductible include: Travel from one client or customer to another Travel from your office to perform business tasks, like pick up the mail, make a deposit at[…]

Q & A: Telephone Expenses

Is the cost of a cell phone deductible?  It depends, which seems to be the answer to many  tax questions.  Let’s explore the rules.  As part of the Small Business Jobs Act of 2010, cellular telephones are no longer classified as “listed property” effective for tax years beginning after December 31, 2009.  What does that[…]