STS Tax Talk

STS Tax Talk 1

Tim, who possesses his own business, made a decision he wished to have a two-week trip around the US. So he did — and could legally deduct every dime that he spent on his “vacation”. Here’s how he achieved it. 1. Make all of your business visits before you leave for your trip. A lot of people think that they can continue vacation and simply give away their business cards in order to make the trip deductible. You must have at least one business visit before you leave to be able to establish the “prior place business purpose” required by the IRS.

Keeping this at heart, before he still left for his trip, Tim creates visits with business colleagues in the many metropolitan areas that he planned to visit. Let’s say Tim is a producer of green office products looking to expand his business and send out more product. One possible way to determine business contacts–if he doesn’t already have them–is to put advertisements looking for distributors in newspapers in each location he plans to go to.

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He could then interview those who react when he gets to the business destination. Example: Tim wants to holiday in Hawaii. If he places several advertisements for marketers, or contacts a few of his online vendors to execute a presentation, then your IRS would accept his trip for business. To be able to deduct all of your on-the-road business expenses, you must be traveling on business. Example: Tim wished to visit a regional conference in Boston, which is only a one-hour drive from his home.

If he were to settle the hotel where the meeting will be kept (to avoid possible vehicle and traffic problems), his overnight stay qualifies as business travel in the eyes of the IRS. Tip: Remember: You don’t have to live far away to be on business travel. When you have a good reason for sleeping at your destination, you could live a couple of kilometers but still be on travel status away.

3. Ensure that you deduct all your on-the-road -expenses for each day you’re away. For each day you are on business travel, you can deduct 100% of lodging, tips, car renting, and 50% of your meal. Tim spends three times meeting with potential distributors. 75 per expense–except for lodging.

Tip: Hed, however, need to record these things in your diary. A good tax diary is vital to be able to audit-proof your information. Adequate records shall contain the amount, date, place, and business reason behind the expense. 22 on lodging will he need a receipt? The answer yes is.

You need receipts for many paid lodging. Tip: Not merely are your on-the-road expenditures deductible from your trip, but also all laundry, footwear shines, manicures, and dry-cleaning costs for clothes worn on the trip. Thus, your first dried out cleaning expenses that you incur when you go back home will be completely deductible.