Tax Tips: Deducting travel and entertainment expenses

Meals, entertainment, and travel expenses might be tax deductible for small business owners and some employees. Let's start with small business owners. If you spend money on meals, entertainment, or travel during the course of your business, you can take a deduction on your Schedule C or business tax return as long as you meet certain requirements. An employee may be able to deduct their expenses as an "unreimbursed employee expense" if they spent the money, met all the tax requirements, and were not reimbursed by their employer for the expenses.

The requirements for business owners sand employees: First, there must be a bona fide business purpose to the deduction. That means you might be entertaining a potential client, or you're traveling to a business meeting, or you had to stay in a hotel during a business trip. You also must keep records of the expense, including receipts and information about the business purpose of the expense. Travel expenses are fully deductible, but meals and entertainment expenses are only 50% deductible on your tax returns.

Taxpayers can get in trouble when they get too aggressive or claim items that are outside the IRS rules. Taking yourself to lunch one day isn't a deductible meal, unless you are traveling for business. Going on a personal vacation, and taking a business file along to look at doesn't turn it into a business trip. The IRS is on the lookout for taxpayers cheating on these items, because they have long been abused by business people. Make sure you have all your records in order, and that you aren't deducting items which don't qualify.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Are Contributions to School District Programs Tax Deductible?

The IRS allows you to claim a deduction for the donations you make to qualified organizations. These organizations include more than just charities and will include any school district program that does not operate for profit and is solely supported by state and local governments.

Read More

Brought to you by TurboTax.com

What is Form 1099-NEC?

The IRS has reintroduced Form 1099-NEC as the new way to report self-employment income instead of Form 1099-MISC as traditionally had been used. This was done to help clarify the separate filing deadlines on Form 1099-MISC and the new 1099-NEC form will be used starting with the 2020 tax year.

Read More

Brought to you by TurboTax.com

Do I Qualify for Earned Income Credit While on Unemployment?

Receiving unemployment benefits doesn't mean you're automatically ineligible for the Earned Income Credit, but there are other requirements you'll also need to satisfy to claim the EIC.

Read More

Brought to you by TurboTax.com

Guide to Short-term vs Long-term Capital Gains Taxes (Brokerage Accounts, etc.)

Not all capital gains are treated equally. The tax rate can vary dramatically between short-term and long-term gains. Generating gains in a retirement account, such as a 401(k) plan or an IRA, can also affect your tax rate.

Read More

Brought to you by TurboTax.com
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.