The Business Owner's Guide To Travel And Tax Deductions
It's common knowledge that travel directly related to business, such as attending conferences, traveling to acquire new business or investment property, board meetings, etc. First, how does the IRS define business travel? There are four main rules that apply in order to claim tax deductions for business travel: 1.
These are all eligible tax deductions on business days but not on personal days. It's important to note that eligible deductions are for business days only, not personal days.
In order to make tax deductions, the majority of your days on the trip need to be business days. Third, how to determine a legal 'business day' To count a trip day as a business day, it must meet one of the categories in the following list: 1.
Spend more than half of normal business hours in the pursuit of business. If an owner must be at a particular place for a specific and bona fide business purpose, this counts as a business day.
Business travel days are those spent traveling in a reasonably direct route to the business destination. You can travel to exotic locations using the 7-day travel rule The 7-day travel rule allows a 100 percent deduction of transportation costs to a business destination even if only one day was spent working and the rest of the time on the beach.
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