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Tax Strategies for Business Owners

by Guest Writter
Anis Blémur, Owner & Manager, AB Consulting & Accounting Services

Being a business owner you know that traveling comes along with the job. With these tips and tricks it will ensure that every business trip is a tax-deductible vacation. First, make all your business appointments before you leave for your trip. Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible. Wrong. You must have at least one business appointment before you leave in order to establish the “prior set business purpose” required by the IRS.

Make Sure your Trip is All “Business Travel.” In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day’s work and you need to sleep or rest to meet the demands of your work while away from home deduct all of your on-the-road -expenses for each day you’re away. For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Lets say you spend three days meeting with potential distributors. If you spend $50 a day for food, you can deduct 50% of this amount, or $25. Not only are your on-the-road expenses deductible from your trip, but also all laundry, shoe shines, manicures, and dry-cleaning costs for clothes worn on the trip. Thus, your first dry cleaning bill that you incur when you get home will be fully deductible. Make sure that you keep the dry cleaning receipt and have your clothing dry cleaned within a day or two of getting home. Sandwich weekends between business days. If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend. Make the majority of your trip days business days. The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.

 

About the Author

Anis Blémur currently owns and manages AB Consulting & Accounting Services , which specializes inaccounting services, real estate services, consulting and tax savings strategies for businesses and individuals.

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