If you have a home business that requires you to travel, either by plane, car, or train, then you have additional tax deductions you may qualify for. This includes but is not limited to the cost of airfare, meals, dry-cleaning, and hotel/motel expenses. This article will cover the rules and requirements so you can claim these deductions on your 2006 tax return.
For business travel that takes you away from home overnight or for several months (but still within the United States), the major expenses that can be claimed are as follows:
The cost of traveling to the new location including the standard mileage deduction for your car, airfare, or train tickets.
The cost of activities while you're there, including renting a car, taxis, meals, hotels, and mileage if driving your car.
Keep in mind that to claim 100% of these deductions, the primary purpose of your travel must be for business. For example: if you travel to Orlando, Florida to attend a convention in your area of business, then you can deduct all of the expenses during the days the convention is open. After the convention is over and you decide to extend your stay for a few more days, then expenses incurred during those extended days would not be covered. If your spouse is with you the entire time, you cannot write of their expenses unless they are an employee of the business and as a good business reason for being there. However, sharing a room and rental car if they are with you would have the same deduction amount as if you were alone regardless of their business status. In other words, you would split the cost of the room and rental car in half.
If the primary purpose of the visit is for a vacation to Orlando, the you cannot write off the transportation costs, such as the airfare of traveling to Orlando. However, once you are there, you can still write off the amounts of traveling around Orlando for business. Keep careful records of your business expenses when mixing business with pleasure. The tax savings can be significant. *Note that travel outside of the United States have different rules.
Always keep detailed records of your business travel expenses. The IRS takes these deductions seriously. This means keep all receipts for meals and entertainment, which are mandatory for expenses over $75. It also would be helpful to keep a journal or business log of activities, describing the business activity conducted. In the log, include the date, name and address of the restaurant or entertainment place, including the type of entertainment. Also identify people entertained and the business reason for their presence.
If you didn't keep records up to this point, the IRS offers a standard allowance between $30 and $50 a day, depending on where the business travel is. See IRS publication #463 for a complete list.
Home Business Tax Savings
If you are tired of paying taxes but still struggling to make ends meet while the government spends money on crazy programs that you can perceive zero value in, then stop paying taxes! Okay, so you probably shouldn't just stop paying taxes. Tax evasion is something the U.S. Government takes pretty seriously. But there are tax laws that were written to help you keep more of your money working for your family. The number one way to do that is by starting a home business.
But you don't have time. You don't have investment capital. You ... just don't know what you don't know. Tax advantages of operating a home business can save your family thousands of dollars every year EVEN IF YOUR HOME BUSINESS DOESN'T MAKE ANY PROFIT right away. There are thousands of excellent home business options to choose from that cost little or nothing to start. Need inspiration? Enter "network marketing business ventures" in a Google search. If you have a child, own a car, use a phone, go to the bathroom, have a computer, and so on, there is money to be made.
HIRE YOUR CHILDREN: Give your children a legitimate job in your business. They can do research, print fliers, sort mail, or whatever other age appropriate task you can give them. You can put your child on your payroll TAX FREE to both you and your child. You merely have to limit their income to something close to $5,000 annually. The catch is that you really have to pay them, but then it will be their responsibility to buy trendy shoes, purchase special food treats, pay for transportation, school tuition, and ballet, et cetera. We're not suggesting they begin paying for their normal care, but many extra's they want in life can become their own responsibility.
NEVER GO ON ANOTHER VACATION: Every time you get more than 75 miles from home, you could legally be on a business trip. Make sure you do business though. If you have invested in a network marketing business, surely, there must be some people at Disney World or Universal Studios who would love to know about this unique business opportunity.
STOP RUNNING ERRANDS IN YOUR CAR FOR FREE: If you need to go to the store, do something business-related and write off the business mileage. Maybe you are running low on toilet paper for your business office or maybe you need to pick up a few more leads from the bulletin board at the local grocery store.
GIVE UP YOUR PERSONAL CELL PHONE: It is now your business phone, so make sure to use it when doing business. There may be some catches with this deduction like, do you have a personal phone number at home?
5) TURN YOUR GUEST ROOM INTO A BUSINESS CENTER: Now that you have an office at home, make sure you have got gas, electricity, lawn service, a supply of coffee, and someone to pay a rental payment to.
This is just the tip of iceberg. The advantages of a small business are too numerous to mention in this short article. There is a network marketing company or other opportunity with a product or service that you would love to let other people know about that is waiting for the opportunity to change your life. Go find it, and then tell Uncle Sam that he's not getting quite as big of a Christmas gift this year.
Both Robert Rogers & Terry A. Sacia are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Robert Rogers has sinced written about articles on various topics from Green Tea, Video Games and Auto Insurance. Robert Rogers is a writer in the Washington DC area. For more information on visit. Robert Rogers's top article generates over 5400 views. to your Favourites.
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