Archive for October, 2011
Tax Saving Tips on Domestic Business Trips
Posted by Kim Perkins on October 27th, 2011
If you go on a business trip within the United States you know that you can deduct some of your expenses. The question is how much. First, let’s cover just the transportation expenses. This is the cost of travel to and from your business destination. It includes travel to your departure airport, airfare, baggage fees, tips, cab fare, etc. All costs for travel fit into this category. The bottom line is this: all of your domestic transportation costs are 100% deductible if your primary purpose is business! But beware, if your primary purpose is pleasure, i.e. a vacation, then none of your travel expenses are deductible; after all, you’re going on vacation.
The IRS does not specify how to determine if the primary reason for domestic travel is business, but let’s be logical: you should be able to claim business as your primary purpose whenever business days exceed any personal days. Any expenses incurred over a weekend or a holiday are also deductible if they fall between days designated for business and it is unreasonable or impractical for you to return home.
Once at your business destination, your out-of-pocket expenses are fully deductible with the exception of meals, which are subject to a 50% disallowance rule. Out- of-pocket expenses include lodging, tips, transportation (cabs, buses, car rental), seminar and convention fees.
Be sure that you document and accumulate proof that you did attend to business while on your business trip. This only serves to protect your interests (money) should the IRS question your expenses. Log your meetings in your day planner, collect your CEU’s from your seminars, keep your notes and programs from your convention.
By the way, expenses for personal days while on a business trip are not deductible!
Remember, your success is our business, and…
We want to be… At The Core!
Tax Tips for 2012
Posted by Kim Perkins on October 24th, 2011
Thanks to the extension of the 2001 and 2003 tax cuts, the current federal tax environment remains favorable to the individual and the small business owner. Now is a great time to take advantage of the low tax rates because we can’t predict what the future tax rates will be. Here are two tax planning ideas to consider during the fourth and final fiscal quarter of 2011:
1). Leverage your standard deduction by bunching certain deduction items and claiming them every other year. Claim the standard deduction during the intervening years. Examples of deductible items which can be bunched every other year to lower your federal income taxes include charitable contributions, state income taxes, and personal property taxes.
2). If you expect to be in a lower tax bracket in 2012 it may pay to defer taxable income from this year into the next. How to do that? If you’re a cash basis taxpayer, send out client/customer invoices late in the year. That way, you won’t receive payment until early 2012.
These and other tax planning maneuvers are often overlooked by the tax preparation software sold to the general public. Green Apple Resources works with the client to review their tax liability. Our goal is to defer the clients tax liability for as long as possible allowing the client to invest that money or pay down debt.
If you have any questions regarding your current tax profile or your past tax profile, please contact us…
