Thursday, July 14, 2011

New Business Mileage Rates

IRS has announced an increase in the optional mileage rates for the final six months of 2011.
Business rate is now 55.5 per mile;
23.5 for medical;
14 for charitable.
This is due to the higher gas prices - thank you IRS.

Wednesday, July 13, 2011

Business Meals and Entertainment Expenses

To deduct these expenses, the IRS indicates the taxpayer must establish that the expense was "ordinary and necessary" in carrying on the trade or business.
To substantiate the expense, the following information is necessary (1) The amount and description of each expense (2) the time and place (3) the business purpose of the activity and any business benefit (4) the nature of the business discussion (5)the business relationship to the person.

WOW - who is doing that?

I believe that the requirements would be met by retaining your receipt (1 and 2)and on the back write the purpose and benefit and the nature of the discussion and the business relationship (3,4,&5).
Attach these receipts to an expense report or a statement which should substantiate the expense.

Thanks Julie.