If you are self employed, or even an employee, and have the option of deducting travel and entertainment expenses, you need to learn all about the expenses that qualify and those that don't.
This option is a nice concession that should be utilized in full by those fortunate enough to have it.
Because it would take more than a page, many more than one page as a matter of fact, to cover both of these topics, we will discuss only travel expenses. Understanding what qualifies as a deductible travel expense is important not only for the traveler himself but also for the accounting student who may one day be called on to advise a traveling business man. Below we will discuss the less obvious expenses that qualify:
1. Lets say you work two different jobs in the same city. After working a full shift at one place of employment, you have to travel across the town to go to your part time shift. If you travel directly from one work place to the next, you can deduct the expense incurred to get you from point A to point B. You cannot deduct this expense if you first go home before going to your next job.
2. Lets say you currently work for company A but hate your job. As a result you begin looking for alternative employment. Company B, who is housed 3 states away, agrees to interview you. You are permitted to deduct the travel costs associated with commuting from company A to company B.
3. Lets say you live in a city with a robust taxi system. Your job requires you to take a cab from one business to another. You can deduct the cab fees.
4. Lets say that you are an employee of company A and company A offers incentives for you to go back to school and take courses that are related to your job. Three nights a week you have to travel 15 miles to the local community college. The costs associated with this travel are deductible so long as the course meets the requirements for deductible courses.
5. Lets say your employer wants you to attend a convention in his place that is 100 miles away from home. You may deduct the costs associated with the travel so long as they meet the rules for this type of circumstance.
6. Lets say you are sick and need to leave work to go to the hospital. Under certain circumstances you may deduct the expenses associated with getting there.
These are a few of the many different expenses that qualify as deductible for tax computation. If you do a significant amount of travel or if wining and dining clients is a frequent occurrence in the normal course of business, it would be wise to go to your local bookstore and purchase a book that enumerates the many deductible expenses.
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