The IRS Audit Blog

Posts Tagged ‘money’

Question: Misc. Business Tax Questions… (Tax Home, Record Keeping)?

Can I deduct 50% of my meals if I’m in town if the dinner was a business dinner? I couldn’t find much on the IRS website. I’ve been told about a 50 mile rule before, but this isn’t ‘just eating’ its business related.

Also, this is what the IRS website says about records for expenses:

“Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should show the amount paid and that the amount was for a business expense. Documents for expenses include the following:

Canceled checks
Cash register tapes
Account statements
Credit card sales slips
Invoices
Petty cash slips for small cash payments”

Does “Account statements” mean my banking account/credit card statements? I lose all of my hotel receipts when I’m out of town, but I have a clear entry on my bank statement that has the name of the hotel and city.

Thanks!

Answer: Yes, you can deduct 50% of business Meals & Entertainment expense.

There are two tests that a business meal has to pass.

1) It must be “ordinary” and “necessary”
2) It must be either “directly related” to or “associated with” the business.

You probably won’t be able to write-off the $3,000 bottle of champaign at lunch… but a more reasonable lunch will probably pass muster. As long as it also passes the second rule, which is that you’ve gotta have a business reason for the lunch.

There’s a nice discussion of those concepts at the website below.

You do need good records. In addition to the receipts (a credit card statement would be ok for a receipt) it’s a good idea to have notes in your business planner, or some other place, that shows the business purpose of the meeting/meal that you are claiming. In the event of an audit, you’ll need to show the date, place, amount, business purpose of the expense, and the business relationship of the person(s) being entertained. The first three (date, place and amount) can be shown on your credit card statement. The last two will need to be recorded somewhere else.

I hope that helps.

IRS says Haiti relief donations can be claimed on 2009 tax return

People who give to charities providing eathquake relief in Haiti can claim these donations on their 2009 tax return, says the Internal Revenue Service.

Tax Tips: Record Keeping – November 2009

Question: question about h&r block emerald card, denied refund loan?

We had our taxes done on the 3rd, we paid the extra for the money to be there in 1-2 days and it’s still not there. I missed a call from H&R Block the other day, and they didn’t leave a message. I am assuming that we werent approved for the rufund anticipation loan. My question is the IRS website says that we should have our refund by April 22, will that money still go on the emerald card, or will we recieve a check?

Answer: Bostonian is correct. You will get your money in about 8 – 15 days from the time you filed, and it will still be deposited onto your Emerald Card. What happens when you have been denied the loan is that the bank waits for the IRS to release your refund before they take out the fees and give you the remainder.
As a side note, if you are expecting a “Rebate Check” it will come as a check in the mail, NOT a direct deposit to your Emerald Card. There has been some confusion about this.
If you have further questions, feel free to e-mail through the Y!A website. Hope I was helpful!

Data: Owe money Search delinquent Wisconsin taxpayers

The Post-Crescent has compiled databases on a variety of topics. Click on the headline to view several featured databases.

Tax Tips: Undelivered Refunds – November 2009 (ASL, Captions & Voice Over)