Transportation

1
Chapter 9

• Transportation
• Travel
• Moving Expense (deduction FOR)
• Education
• Entertainment
• Other . Home Office

2
Company
Business Expenses Deductible
Unreimbursed EE expenses can be deducted as Misc.
Expense
Employees
3
Transportation (local)

• Unreimbursed employment related travel
• Not away from tax home

• Commuting not deductible
• What about commuting from 1st job to 2nd 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)

4
Travel (broader concept, away from home)

• Transportation plus meals, lodging expenses
  while away from home overnight.
• Temporary versus Indefinite (

• 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
  

Domestic
Foreign
5
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 miles _at_ 18 cents per mile and lodging
• Meals not deductible

6
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 2006 -- FOR AGI
• AGI limit - 65K single and 130K joint

7
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.

8
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.