Jackson Hewitt(R) Weekly 'Tax Time Tip': Business Expenses May Add Up To Valuable Tax Deductions
By: Jackson Hewitt Tax Service | 0 Shares 51 Reads
PARSIPPANY, N.J. // PRNewswire-FirstCall // -- Many taxpayers could hold onto more of their hard-earned dollars by simply taking advantage of all the tax deductions that are available to them. One often overlooked area is business expenses – whether employed or self-employed. In this week's "Tax Time Tip," Jackson Hewitt Tax Service® reminds taxpayers of several work-related expenses that may be deductible on their annual tax returns.
This Week's Tip: Whether driving a personal vehicle for work or paying for new business or client dinners, taxpayers need to ensure they are recording expenses properly and not missing out on key tax deductions they may be eligible to receive on their tax returns. "Many taxpayers are simply unaware that they can often claim deductions for a wide range of job-related expenses," said Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. "Un-reimbursed business expenses you incur for your employer, and many expenses you incur if you are self-employed, can be claimed on your income tax return, providing an opportunity for a larger tax refund or lowering the tax amount you may owe. Awareness of what you can and can't deduct and proper record keeping are critical."
Claiming business expenses on your tax return this year? Here are several key tax tips you need to know:
Claiming Personal Vehicle Usage for Business: If you used your vehicle for business purposes, there are two ways to deduct expenses.
You may choose the standard mileage rate and deduct 55 cents per mile for your un-reimbursed mileage. The calculation of the standard mileage rate takes into account typical expense for maintenance, gas, oil, depreciation and other expenses.
Or, you may be able to deduct the full expenses of your vehicle including, depreciation, gas, oil, insurance, tires, licenses and repairs. You must keep records of all expenses throughout the year, both personal and business, in addition to your mileage records to determine the allowed deduction.
"It is mandatory that you keep a written record of your total mileage and business mileage for either method," Steber added. "The cost of commuting between your home and your work is not deductible."
Travel Expenses: If you conducted business away from your primary residence, and those travel costs were not reimbursed by your employer, you may be able to deduct items such as transportation, lodging, laundry, dry cleaning and telephone expenses on your tax return. Generally, meals are only 50% deductible; however, for certain individuals in the transportation industry, such as interstate truck drivers or airline pilots, the deductible amount increases to 80%. Out-of-town convention expenses can also be deducted, if unreimbursed.
Entertainment: If you incurred entertaining costs for business reasons, you may be able to deduct 50% of the amount. The expense must be considered ordinary or necessary to your profession. A record of the business purpose and a receipt are necessary documents to keep.
Job-Related Expenses: Office supplies, postage, business cards and long distance phone charges incurred for your job, but not reimbursed, are deductible. Other expenses that may be deducted include union dues, professional insurance and professional licensing fees.
Education Expenses: You may be able to deduct work-related education expenses on your income tax return or exclude your employer-provided educational assistance benefits from your income. Qualifying work-related education must either be training required by your employer or the law to keep your present salary, status or job; or, it must be education that maintains or improves skills you need in your present work. However, qualifying work-related education must pertain to your current business and cannot include the minimum education or initial licensing for your job. Costs that were part of a course of study in a brand-new field or trade cannot be deducted.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX), with more than 6,300 franchised and company-owned offices throughout the United States, is an industry leader providing full service individual federal and state income tax return preparation. Most offices are independently owned and operated. In addition, an online tax preparation product, Jackson Hewitt® Online, is available at www.jacksonhewittonline.com. The company is based in Parsippany, New Jersey. To locate the Jackson Hewitt Tax Service® office nearest to you, call 1-800-234-1040.
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