Chapter 9 Transportation Travel Moving Expense (deduction FOR) Education Entertainment Other ……. Home Office

Company Employees Business Expenses Deductible Unreimbursed EE expenses can be deducted as Misc. Expense

Transportation (local) Unreimbursed employment related travel Not away from “tax home” Commuting not deductible What about commuting from 1 st job to 2 nd job?? Travel to job sites / other offices (in the community) Computation Mileage – 44.5 cents per mile (versus actual) Depreciation – for basis purposes (17 cents)

Travel – (broader concept, away from home) Transportation plus meals, lodging & expenses while away from home overnight. Temporary versus Indefinite ( < 1 year) Conventions – must be “business” related Education – continuing ed Business / Pleasure – trip must be “primarily for business. if not, transportation not deductible. Meals and lodging are allocated between personal and business. transportation expenses must be allocated unless: trip is 7 days or less, or personal percentage < 25%. Domestic Foreign

Moving Expense (For AGI) Moving expenses are deductible in conjunction with a new job Distance Test – move > 50 miles more …… compare distance from old residence to old job and old residence to new job. Time Test – 39 weeks out of 78 weeks or if Self Employed, 78 weeks out of the next 2 years. Breakdown of Moving Expenses: »Cost to move household effects »Travel – 18 cents per mile and lodging »Meals – not deductible

Education Deductible as ordinary and necessary business expense to maintain and improve skills required by employer or by law Not Deductible if courses are to meet minimum standards qualifies for a new trade of business Qualified Tuition Deduction $4,000 deduction in FOR AGI AGI limit - $65K single and $130K joint

Meals and Entertainment 50% Reduction for meals and entertainment. Must be business discussion. Club Dues – not deductible but specific expenses related to the (golf) club may. Tickets – limited to face value (less 50%) Skybox – use the most expensive seats in the stadium (less 50%). Business Gifts – limited to $25 per year per donee.

Other Expense Office in the Home Exclusively used for business on a regular basis –as a principal place of business, or –a place used by customers, clients, or patients Home office expense cannot exceed gross income less all other business expenses (Translation: home office expenses are fully deductible unless the home office deduction creates a loss ………. If so, deduction is limited to income but unused loss can be carried forward.