Los Angeles, CA (ArticleCity via ArticleCity.com) October 25, 2006 -- Kevin Wessell, renowned asset protection and estate planning expert said today that business travelers should be aware of a legal and proper program for a US tax deduction that allows them to travel on business, perhaps spend some leisure time on their trip, and deduct 100% of the transportation costs for the trip. Wessell heads LA area-based Companies Incorporated that provides corporation formation in all 50 US states, asset protection, offshore trusts accounts and estate planning. Information on Mr. Wessell and CI’s suite of services for businesspersons can be accessed via their web site at http://www.companiesinc.com.
Deducting Business Trips
Wessell points out: “As you probably know, when taking a vacation is the main purpose for traveling, the IRS does not allow you to deduct your transportation expenses. Whereas, if the main reason for the trip is a business purpose, the IRS says you can deduct 100% of your transportation cost for travel within the US. Therefore, the aim is to be sure that the main purpose of the trip is business. There is no law against having a bit of fun while on your business trip. Do things right and you can deduct 100% of your transportation expenses.”
He went on to point out, “Here is one provision that is quite controversial but has passed the IRS muster: If you do business on Wednesday through Friday and stay Saturday and Sunday, are the last two days tax deductible? The answer is quite straightforward - it depends. If the purpose of staying the weekend is to have a couple of vacation days, it probably is not. However, if the purpose is to save money on airfare because a Saturday night stay lowers the plane fare more than the costs of staying an extra night or two, it likely is.”
Deducting Business Trips
Wessell points out: “As you probably know, when taking a vacation is the main purpose for traveling, the IRS does not allow you to deduct your transportation expenses. Whereas, if the main reason for the trip is a business purpose, the IRS says you can deduct 100% of your transportation cost for travel within the US. Therefore, the aim is to be sure that the main purpose of the trip is business. There is no law against having a bit of fun while on your business trip. Do things right and you can deduct 100% of your transportation expenses.”
He went on to point out, “Here is one provision that is quite controversial but has passed the IRS muster: If you do business on Wednesday through Friday and stay Saturday and Sunday, are the last two days tax deductible? The answer is quite straightforward - it depends. If the purpose of staying the weekend is to have a couple of vacation days, it probably is not. However, if the purpose is to save money on airfare because a Saturday night stay lowers the plane fare more than the costs of staying an extra night or two, it likely is.”
It’s essential to figure out exactly what is required to deduct travel without raising red flags. If an audit reveals you have crossed the line, not only will you not be allowed your deductions, but you will also be required to pay interest on the amounts owed plus pay a penalty of 5%. Moreover, if the IRS determines that you have purposefully broken the rules, the penalty can be as high as 50%, according to Wessell.
He added, “Prior to writing off your business trip, be sure your deductions are legitimate. The size of your deductions is reliant upon the purpose of your trip. The IRS classifies travel as either entirely business, primarily for business or primarily for personal reasons.”
Wessell said in conclusion, “The most audited business type is the sole proprietorship or partnership - more specifically, the Schedule “C” (self employment form). The least audited type of business is a corporation. So, having the corporation pay for a business trip is less likely to be taken to task than taking the same deduction through the previously mentioned business types. As an employee, you can deduct un-reimbursed travel expenses if you need to do business away from home. Transportation costs, lodging, laundry, telephone and Internet expenses are some of the available deductions. Usually, meals are 50% deductible too.”
About Companies Incorporated
Established in 1977, privately-held Companies Incorporated serves both large and small businesses throughout the USA and in some foreign locales with incorporating services, establishing LLCs (limited liability companies) to creating offshore companies aimed at protecting assets to legally reducing annual taxes. CI also provides services to establish S corporations and non-profit organizations as well. CI holds national seminars on its various services, most recently to a sell-out gathering of professionals in a prestigious Las Vegas hotel.
He added, “Prior to writing off your business trip, be sure your deductions are legitimate. The size of your deductions is reliant upon the purpose of your trip. The IRS classifies travel as either entirely business, primarily for business or primarily for personal reasons.”
Wessell said in conclusion, “The most audited business type is the sole proprietorship or partnership - more specifically, the Schedule “C” (self employment form). The least audited type of business is a corporation. So, having the corporation pay for a business trip is less likely to be taken to task than taking the same deduction through the previously mentioned business types. As an employee, you can deduct un-reimbursed travel expenses if you need to do business away from home. Transportation costs, lodging, laundry, telephone and Internet expenses are some of the available deductions. Usually, meals are 50% deductible too.”
About Companies Incorporated
Established in 1977, privately-held Companies Incorporated serves both large and small businesses throughout the USA and in some foreign locales with incorporating services, establishing LLCs (limited liability companies) to creating offshore companies aimed at protecting assets to legally reducing annual taxes. CI also provides services to establish S corporations and non-profit organizations as well. CI holds national seminars on its various services, most recently to a sell-out gathering of professionals in a prestigious Las Vegas hotel.
by: Kevin Wessell