Board Converting News, June 13, 2022

Tax Deductions (CONT’D FROM PAGE 26)

tandem, then use whichever number is higher. This can be really handy in high per diem cities.” The per diem option is often overlooked by business travelers. “Many people will deliberately keep their meal expenses low, because they are on a budget,” says Caw- ley. “But then they forget that they have a right under the IRS code to take the higher per diem rate. As a result they end up not getting their higher deduction.”

One more thing: Once you have your records in hand, hang onto them. “The IRS can go back three years when auditing your returns,” says Flemming. “If they find any- thing they can go even further back than that. So we rec- ommend keeping documentation for seven years, which is as far back as the IRS can go.” When it comes to state law, Flemming cautions, the rules can be more onerous. Montana, for example, can go back 10 years. “Find out what the rules are in your own state, because each one is different.” Bonus tip: “Consider charging all of your business ex- penses on a dedicated credit card,” says Cawley. “Then you’ll have a permanent record of where you went and how much you spent.” And that credit card’s statements will provide an easily accessible journal of your business activities. Per Diem Rates Does collecting meal receipts—digital or otherwise— seem like a hassle? Ask your accountant if you are eligible to utilize “per diem” rates—daily cash amounts that are set by the government. “Each year the IRS comes out with a per diem rate for each geographic area,” says Cawley. “The rule is that you can either deduct your actual expenses in terms of meals and incidentals or just use the per diem rate, based on how many days you are there. You should track both in

One more thing: Are you planning to use your personal car to travel to the show? If so, you face another decision: Whether to use the standard mileage rate or keep track of your actual expenses. The decision will lie in how good a record keeper you are and how much hassle you want to put up with. Sometimes the standard deduction is the

easier option. Personal Time

What if you spend some vacation or personal time during your trip? How does that affect the deductibility of


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