Pit & Quarry, February 2014

COUNTDOWN TO CONEXPO CON AGG 2014 These tax deductible expenses include the travel costs for getting to and from the show convention meeting or other business destination and any business related expenses while at the business destination Unfortunately if a spouse dependent or other individual accompanies an attendee on the trip that individuals travel expenses usually cannot be deducted A bona fide business purpose exists if a real business purpose for the individuals presence can be proven In general the travel expenses of someone accompanying an attendee are deductible if that person is an employee of the business has a bona fide business purpose for the trip and or would otherwise be allowed to deduct the travel expenses Deductions records and receipts The following expenses are usually tax deductible Conference or trade show registration fees Standard mileage for a vehicle driven to the meeting trade show or convention Air bus or train fare Lodging including tips 50 percent of meal expenses 50 percent of the cost of entertaining customers or clients Cash receipts often serve as a reminder for a deductible expense such as the taxi ride Other business expenses charged to a corporate credit card will be itemized on your credit card bill Keep receipts obtained from transportation and a detailed copy of the hotel bill is usually a necessity For the event itself a copy of charges as well as a copy of the convention schedule agenda can be used to prove it is relevant to the operation of the aggregates business The bottom line is that receipts for expenses of 75 or less are not required under our tax laws Thus if you take a taxi from your hotel to the site of a trade show or convention for a cost of 12 no receipt is required One exception As Tax deductible expenses include the travel costs for getting to and from the show mentioned a receipt for lodging of any amount even a budget motel is almost always needed in the event of a tax audit The tax rules do not place an overall dollar limit on the deduction for travel and entertainment expenses including convention or trade show attendance However meal and entertainment costs that are lavish and extravagant cannot be deducted Even worse the tax law does not define lavish and extravagant Thus its up to the aggregates producer or business and the almost mandatory tax advisor to decide whether costs are too much before deducting them An easier alternative Although receipts may not always be necessary every aggregates producer must substantiate the amount time place and business purpose of expenses paid or incurred when traveling away from home on business They have the option of keeping the actual records or using an IRS provided flat deduction or allowance The IRSs per diem allowance can be used to substantiate the amount of convention expenses for lodging meals and incidental expenses The advantage to using the IRSs socalled standard or per diem allowance is that records of actual expenses are not needed although records should be kept to prove the time place and business purpose of the travel For travel after Oct 1 2013 the maximum per diem allowance is 251 with a per diem allowance of 170 for lodging and 52 for meals and incidental expenses M IE The biggest disadvantage to the standard per diem allowances is they are not very generous Chances are that the actual expenses and therefore the deductions would be larger with a regular deduction Unfortunately if your employer is related to you or is an incorporated aggregates business in which you are more than a 10 percent principal the standard meal allowance cant be used Tax deductions on a diet Regardless of whether actual costs or the per diem method is used as a general rule only 50 percent of unreim 66 PIT QUARRY February 2014 www pitandquarry com ISTOCK COM BERTLMANN