Expenses and Deductions on Schedule C: Travel, Meals & Entertainment

Expenses and Deductions on Schedule C: Travel, Meals & Entertainment


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Many business owners rely on visiting clients, attending conferences and being on the road for a wide variety of reasons, to keep sales and operations of their businesses moving. For many small business owners, travel, meals and entertainment expenses are the lifeblood of the business. While on the road, owners and their employees incur a […]




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Many business owners rely on visiting clients, attending conferences and being on the road for a wide variety of reasons, to keep sales and operations of their businesses moving. For many small business owners, travel, meals and entertainment expenses are the lifeblood of the business.

While on the road, owners and their employees incur a variety of expenses for air fare, auto rentals, hotels, meals, taxis, parking, tips and many other expenses that are ordinary, necessary incidents of traveling away from home on business.

Here is a quick look at two of the most common issues that arise when considering the travel and entertainment expenses you are entitled to deduct:

Travel: Travel expenses are tax deductible for the ordinary costs associated with travel for business purposes when the person or employee is traveling away from his or her tax home.

The tax home is defined as your regular place of business or post for your duties. Rather than being identified as a residence or even an office – your tax home is the entire metropolitan area where you normally conduct your primary work or maintain your office.

Meals: Meals are deductible expenses provided they are necessary for travel away from on business, or they are business related entertainment. The deduction is generally limited to 50% of the cost of the meal. There are two methods of calculating the deduction for meals – actual costs, or the standard meal allowance.

However, if you are a self-employed person, the 50% limit will not apply if (1) you incur these expenses as an independent contractor; (2) your customer or client reimburses of provides an allowance for meals in connection with your services, and (3) you provide a record of your expenses to the customer or client.

There are many more issues to be considered when accounting for travel and entertainment expenses as a tax deduction. Use TurboTax Online to claim all to the tax deductions you are entitled to.

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