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Show Business Deduction Tax Rules Outlined I Knowing the proper reporting and recordkeeping requirements is essential for those taxpayers who claim business-related travel, transportation, entertainment en-tertainment and gift expenses, the Internal In-ternal Revenue Service said. The primary proof for these business expenses starts with keeping timely entries of what was spent in a log, diary, journal, appointment book, or similar record. These entries must also include the date and location of the business travel or entertainment, along with who was seen, and the business purpose for incurring the expense, the IRS said. A receipt or similar supporting support-ing evidence is required for all expenses ex-penses of $25 or more. According to IRS guidelines, all business expenses must be ordinary and necessary in the taxpayer's line of work to be deductible. Reasonable local lo-cal transportation expenses such as the cost of driving and maintaining an automobile while on business, excluding exclud-ing any commuting and personal mileage, mile-age, can be deducted. For a business-related trip outside the area of his or her main place of business, a taxpayer may deduct expenses ex-penses such as food and lodging, said the IRS. Allowable entertainment deductions de-ductions must either be directly related to, or associated with, the active pursuit pur-suit of the taxpayer's business. Business Busi-ness gifts that the taxpayer may deduct are generally limited to $25 for any one individual for the year. The burden of proof for all business expenses lies with the taxpayer, who must show that a bonafide business purpose exists. Complete information on deducting these business expenses can be found in the free IRS Publication 463, "Travel. Entertainment, and Gift Expenses." Ex-penses." It is available by writing or calling the IRS. or by using the order form found in the tax package. |
