Tag Archives: tax filing


As with mileage, it is important to keep good records of all your meal or entertainment expenses throughout the year. In addition to the price of the meal (how much), the IRS wants to know the 4 W’s:

  • who you were with – names of your guests
  • why you met – reason for your meeting
  • where you were – restaurant or meeting place
  • when you were there – the date

Write these items on your receipts or keep a detailed log. Should the IRS decide to audit your company, they will throw out any meal expenses that do not comply.

Entertainment is the same and will often be connected to a meal.  Again, records with who, why, where, and when must be kept.

The same rules apply when travelling.  You can use the federal per diem rate for meals and/or lodging.  With the exception that self-employed individuals must use actual lodging receipts. Current per diem rates start at $111 for Lodging and $52 for Meals and incidentals, but vary depending on what city you are in. Check with your bookkeeper and/or accountant for specific rates.


Vacations are fun and usually for your personal pleasure.  However, sometimes you use part of your vacation to explore or expand your business opportunities.  If you do this, and keep good records, you will be able to write off at least part of your vacation.

To define your business part:

  1. Record where you go and why, the business reason.
  2. Record whom you meet with and where.  Get business cards and/or brochures.
  3. If you are attending a conference, keep your paperwork.  If the conference is the reason you are going and you spend an extra day or two, the entire trip may be deductible.
  4. If you take your spouse or family with you, you can only write off your portion of the trip unless they work in the business.

It is very important to show that you were working on your business so the more materials, addresses and names that you have the better.  Photos can be helpful as well; for example, if you are a realtor looking for houses to sell.

Discussing these issues with your tax consultant BEFORE your trip can help make compliance much easier than trying to go back and get the documentation later.

Sandra Vincent, The Bookkeeping Company

Four Credits That Can Pay You at Tax Time

You might be eligible for a valuable tax credit. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are even refundable, which means you might receive a refund rather than owe any taxes at all. Here are four popular tax credits you should consider before filing your 2010 Federal Income Tax Return:

1.       The Earned Income Tax Credit is a refundable credit for certain people who work and have earned income from wages, self-employment or farming. Income, age and the number of qualifying children determine the amount of the credit. EITC reduces the amount of tax you owe and may also give you a refund. For more information see IRS Publication 596, Earned Income Credit.

2.       The Child and Dependent Care Credit is for expenses paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent, to enable you to work or look for work. For more information, see IRS Publication 503, Child and Dependent Care Expenses.

3.       The Child Tax Credit is for people who have a qualifying child. The maximum amount of the credit is $1,000 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. For more information on the Child Tax Credit, see IRS Publication 972, Child Tax Credit.

4.       The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is designed to help low-to-moderate income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or workplace retirement plan, such as a 401(k) plan. The Saver’s Credit is available in addition to any other tax savings that apply. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs).

There are other credits available to eligible taxpayers. Since many qualifications and limitations apply to the various tax credits, taxpayers should carefully check their tax form instructions, the listed publications and additional information available at IRS.gov. IRS forms and publications are also available by calling 800-TAX-FORM (800-829-3676).

From: Special Report on Taxes – Fidelity Investments