First, the bad news: As we explained previously, tax reform wiped out 50 percent business-entertainment deductions. Which means you can no longer write off “directly related or associated” business-entertainment expenses. In other words, you can wave good-bye to deductible business meals, ballgames, etc., with clients and prospects. Now, for the good news: All is not … [Read more...]
How to Survive an Entertainment-Deduction Audit
It’s a fact… You don’t need a receipt for an entertainment expense that’s under $75. But don’t think the IRS is asleep at the switch. They know that a lot of folks deduct many under-$75 meals, etc., that aren’t legit. What’s more, they can smell fishy entertainment deductions a mile away and, in an audit, make your life miserable if you’re not careful. Want to learn … [Read more...]
Avoid business-mileage “metropolitan area” hassles (Part 2)
In a recent issue of the Tax Reduction Letter, we explained how to keep IRS “temporary work location” rules from destroying your business mileage deductions. In this new issue of the Tax Reduction Letter we’ll demystify the IRS’s complicated “metropolitan area” rules that also impact your business mileage deductions. Leave it to the IRS and the courts to make business … [Read more...]
Don’t Risk Losing your Home-Office Deduction!
Qualifying for a home-office deduction can actually be quite easy. All you have to do is: Use the office exclusively for your business Completely avoid personal use of the office But what happens if you want to run a second business from your home office, or share the office with your spouse? That’s where things get complicated! If you want to avoid losing … [Read more...]
Are Your Rental Properties a “business” or investment” for tax purposes? Big difference.
If you own rental properties, you don’t want the IRS to classify them as an “investment.” Nope. You want those properties to qualify as a “trade” or “business.” Why? Because if your properties are treated as such, and reported on Schedule E, you can enjoy from some major tax breaks. You’ll get the whole story when you read my article titled Tax Tips: Are Your Rental … [Read more...]