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Itemizing Business Entertainment Expenses
 Another interesting way to save on your taxes, that can be fun as
well as rewarding to you and your business, is to deduct
entertainment expenses. Entertainment expenses are great
deductions to add to your taxes and can save you money, however
there are some important guidelines to consider when including
them on your return.
In order to qualify, business must be discussed before, during, or
after any meal deducted. The surroundings must be conducive to
business discussion. For instance, a small or quiet restaurant
would be an ideal location for a business dinner. Be careful of
locations that include ongoing floor shows or other distracting
events that inhibit business discussions. Prime distractions are
theater locations, ski trips, golf courses, sports events, and
hunting trips.
Starting in 1994, the IRS allows up to a 50% deduction on
entertainment expenses. Good documentation of these expenses is
required in order for the IRS to consider these deductions.
Remember that the business meal must be arranged with the purpose
of conducting specific business. Bon appetite!
Important Business Automobile Deductions
An automobile is quite an expense, especially for those of you who
own more than one. For the first half of 2008 (January through
June), the mileage reimbursements rates are 50.5 cents per
business mile, 14 cents per charitable mile, and 19 cents per
moving/medical mile. For the second half of 2008 (July through
December), the mileage reimbursements rates are 58.5 cents per
business mile, 14 cents per charitable mile, and 27 cents per
moving/medical mile.
Another common way to increase deductions is to include both cars
(if you own more than one car) in your deductions. This is
possible since the business miles driven determine business use.
To figure business use, divide the business miles driven by the
total miles driven. You can do this for each car driven for the
business and can bring significant deductions.
This is simply a wonderful way to save, but remember: in order to
be effective, a consistent mileage log should be kept. Consider
meeting with a professional to determine the most efficient way of
tracking mileage and other costs. Happy driving!
Increase Your Bottom Line When You Work At Home
The home office deduction is quite possibly one of the most
difficult deductions ever to come around the block. Yet, there are
so many tax advantages it becomes worth the navigational
trouble…Here are a few common tips for home office deductions that
can make tax season significantly less traumatic for those of you
with a home office.
Try prominently displaying your home phone number and address on
business cards, have business guests sign a guest log book when
they visit your office, deduct long-distance phone charges, keep a
time and work activity log, retain receipts and paid invoices.
Keeping these receipts makes it so much easier to determine
percentages of deductions later on in the year.
Under the 2008 Economic Stimulus package, the new tax laws allow
you to immediately expense, rather than depreciate over time, up
to $250,000 worth of qualified business property that you purchase
during the year. The key is “purchase” ...it can be new or used.
All home office depreciable equipment meets the qualification.
Also, if you purchase more than $250,000 in equipment, you can
expense the first $250,000 then depreciate the rest.
Make sure that before you start deducting all of these items on
your return, that you have qualified for the Home Office
Deduction. You should consider meeting with a tax professional for
further Home Office Deduction advice.
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