MILLBURY, MA and NEWPORT, RI…
The approaching Memorial Day weekend has left many small business owners wondering how they can afford to go away for vacation this summer. If they choose to include some business, it’s possible to turn a five-day excursion to the Cape, a retreat to the mountains or some other trip into a tax deduction and vacation.
“Many small business owners are unclear as to what is business travel and what is not. A simple definition is that if a trip for business causes you to leave your place of business overnight, it’s a business trip and deductible,” said Paul Dion, CPA. “There are some parameters business trips must adhere to. Done correctly, an entire ‘business trip’ can be written off as a business expense.”
The IRS states that travel expenses are 100 percent 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. If the trip meets that definition, you can deduct 100 percent of lodging, tips, car rentals, and 50 percent of your food.
For example, let’s say a small business owner from Millbury spends two days meeting with prospects on the Cape. The first meeting is on Friday morning and the second meeting isn’t until Monday. According to IRS regulations, both days can be deducted as business expenses, even if after the meeting on Friday morning the small business owner spent the rest of the day at the beach.
“The beauty of this deduction is that not only are Friday and Monday deductible, but so are Saturday and Sunday,” said Dion.
Though the IRS does not require receipts for travel expenses under $75 per expense—with the exception of lodging—Dion advises keeping a tax diary of your expenses while you’re away. A good tax diary is essential in order to audit-proof your records. Adequate documentation includes amount, date, place of meeting, and business reason for the expense.
When planning an extended business trip, Dion advises consulting with your tax preparer or accountant.
Adds Dion, “Better yet, pay a visit in person. It’s tax-deductible.”
For more information, call Paul Dion CPA at (508) 853-3292 or visit www.pauldioncpa.com.
ABOUT PAUL DION, CPA
Beyond simple “bean counting”, Paul Dion, CPA and associates work side by side and speak in common English to help clients fully understand their tax situation and take proactive steps to pay the least amount of tax legally allowed while minimizing the risk of an audit. Clients save money and sleep well as night.
Business services include small business accounting, payroll, cash flow management, strategic business planning, new business formation, internet controls, QuickBooks, part-time CFO, bank financing, succession planning and non-profit organization direction.
For a free book, more information or a complimentary consultation, please visit www.PaulDionCPA.com or contact Paul Dion CPA, via Info@PaulDionCPA.com or (508) 853-3292. Offices are conveniently located at 22 West Street, #6, (Felter’s Mill), Millbury, MA 01527.
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