Convenient Deductions
Can I deduct my car's gas and maintenance costs as an expense?
Deducting car expenses can be a little bit tricky. Generally, you can either take a standard mileage rate, which for 27 is 48.5 cents, or you can take the business use portion of your actual expenses. And the actual expenses include gas, maintenance, repairs, car payments, interest on the car loan, or lease payments. And we generally suggest that people figure it both ways and take the larger of the two deductions.
Can I deduct meal and entertainment expenses?
If you incur meal and entertainment expenses to further your business, you can generally write off up to 50 percent of the meals and entertainment. It used to be 100 percent, but a few years ago, the rate for meal and entertainment expenses was changed to 50 percent. If you're an employer and you have meetings with your employees for your convenience because your employees are too busy during the day or you can't find another time to meet, there are provisions for you to write off 100 percent of those particular meal and entertainment expenses.
What qualifies as an entertainment expense?
Courage section 274 is very specific about what qualifies as an entertainment expense. It has to have a direct connection to your business. So a meeting with a vendor who supplies wood to your woodworking shop would certainly qualify as a legitimate entertainment expense. A meal with a spouse to deduct one's business might not. So when in doubt, check with a professional to see if it does qualify. One thing that comes to mind specifically are country club dues. Generally, those are not deductable. Perhaps cases can be made for the cost of a meal at one's club, but not the dues themselves. Likewise, sporting events can be tricky in terms of whether or not they are deductable, but when in doubt always check with a tax professional.
Can I deduct travel as an expense?
You can generally deduct travel as an expense if the travel has a direct connection to your business. If you're meeting with a vendor or a potentional client or an existing client you generally can deduct the travel. We suggest that our clients maintain copies of their airline vouchers or train vouchers, hotel vouchers. Keeping a log of who you met with and what you discussed is also useful in that respect. If your meeting with your potential client or vendor is relatively close, you may be able to deduct mileage to and from the meeting. Where you're not allowed to deduct commuting mileage to your everyday place of business like your office, you can actually deduct a commuting expense associated with visiting a vendor or a client. So even though the office you're visiting may be a mile or two away, you may still be able to deduct mileage, either at the standard rate or at a percentage of the actual travel expenses.
