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2008 Amended Tax Return

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2008 Amended Tax Return

2008 amended tax return Publication 517 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. 2008 amended tax return Tax questions. 2008 amended tax return Useful Items - You may want to see: What's New SE tax rate. 2008 amended tax return  For 2013 and 2014, the Old Age, Survivors, and Disability Insurance (OASDI) portion of the SE tax is 12. 2008 amended tax return 4%. 2008 amended tax return The Medicare (HI) portion of the SE tax remains 2. 2008 amended tax return 9%. 2008 amended tax return As a result, the SE tax rate returns to 15. 2008 amended tax return 3%. 2008 amended tax return For more information, see the Instructions for Schedule SE (Form 1040). 2008 amended tax return Earnings subject to social security. 2008 amended tax return  For 2013, the maximum wages and self-employment income subject to social security tax increases from $110,100 to $113,700. 2008 amended tax return For 2014, the maximum wages and self-employment income subject to social security tax is $117,000. 2008 amended tax return Additional Medicare Tax. 2008 amended tax return  Beginning in 2013, a 0. 2008 amended tax return 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 for any other filing status. 2008 amended tax return For more information, see Form 8959, Additional Medicare Tax, and its separate instructions. 2008 amended tax return Modified AGI limit for traditional IRA contributions increased. 2008 amended tax return  For 2013, you may be able to take an IRA deduction if you were covered by a retirement plan at work and your modified AGI is: Less than $115,000 if married filing jointly or qualifying widow(er), Less than $69,000 if single or head of household, or Less than $10,000 if married filing separately. 2008 amended tax return If you file a joint return and either you or your spouse was not covered by a retirement plan at work, you may be able to take an IRA deduction if your modified AGI is less than $188,000. 2008 amended tax return Modified AGI limit for Roth IRA contributions increased. 2008 amended tax return  For 2013, you may be able to contribute to your Roth IRA if your modified AGI is: Less than $188,000 if married filing jointly or qualifying widow(er), Less than $127,000 if single, head of household, or married filing separately and you did not live with your spouse at any time during the year, or Less than $10,000 if married filing separately and you lived with your spouse at any time during the year. 2008 amended tax return Earned income credit (EIC). 2008 amended tax return  For 2013, the maximum amount of income you can earn and still claim the EIC has increased. 2008 amended tax return You may be able to take the EIC if you earned less than $46,227 ($51,567 for married filing jointly) and you have three or more qualifying children; $43,038 ($48,378 for married filing jointly) and you have two qualifying children; $37,870 ($43,210 for married filing jointly) and you have one qualifying child; and $14,340 ($19,680 for married filing jointly) and you do not have any qualifying children. 2008 amended tax return Reminders Future developments. 2008 amended tax return . 2008 amended tax return   For the latest information about developments related to Publication 517, such as legislation enacted after it was published, go to www. 2008 amended tax return irs. 2008 amended tax return gov/pub517. 2008 amended tax return Photographs of missing children. 2008 amended tax return  The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children. 2008 amended tax return Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2008 amended tax return You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 2008 amended tax return Introduction Three federal taxes are paid on wages and self-employment income—income tax, social security tax, and Medicare tax. 2008 amended tax return Social security and Medicare taxes are collected under one of two systems. 2008 amended tax return Under the Self-Employment Contributions Act (SECA), the self-employed person pays all the taxes. 2008 amended tax return Under the Federal Insurance Contributions Act (FICA), the employee and the employer each pay half of the social security and Medicare taxes. 2008 amended tax return No earnings are subject to both systems. 2008 amended tax return Table 1. 2008 amended tax return Are Your Ministerial Earnings* Covered Under FICA or SECA? Find the class to which you belong in the left column and read across the table to find if you are covered under FICA or SECA. 2008 amended tax return Do not rely on this table alone. 2008 amended tax return Also read the discussion for the class in the following pages. 2008 amended tax return Class Covered under FICA? Covered under SECA? Minister NO. 2008 amended tax return Your ministerial earnings are exempt. 2008 amended tax return YES, if you do not have an approved exemption from the IRS. 2008 amended tax return   NO, if you have an approved exemption. 2008 amended tax return Member of a religious order who has not taken a vow of poverty NO. 2008 amended tax return Your ministerial earnings are exempt. 2008 amended tax return YES, if you do not have an approved exemption from the IRS. 2008 amended tax return   NO, if you have an approved exemption. 2008 amended tax return Member of a religious order who has taken a vow of poverty YES, if: Your order elected FICA coverage for its members, or You worked outside the order and the work was not required by, or done on behalf of, the order. 2008 amended tax return   NO, if neither of the above applies. 2008 amended tax return NO. 2008 amended tax return Your ministerial earnings are exempt. 2008 amended tax return Christian Science practitioner or reader NO. 2008 amended tax return Your ministerial earnings are exempt. 2008 amended tax return YES, if you do not have an approved exemption from the IRS. 2008 amended tax return   NO, if you have an approved exemption. 2008 amended tax return Religious worker (church employee) YES, if your employer did not elect to exclude you. 2008 amended tax return    NO, if your employer elected to exclude you. 2008 amended tax return YES, if your employer elected to exclude you from FICA. 2008 amended tax return   NO, if you are covered under FICA. 2008 amended tax return Member of a recognized religious sect YES, if you are an employee and do not have an approved exemption from the IRS. 2008 amended tax return    NO, if you have an approved exemption. 2008 amended tax return YES, if you are self-employed and do not have an approved exemption from the IRS. 2008 amended tax return   NO, if you have an approved exemption. 2008 amended tax return * Ministerial earnings are the self-employment earnings that result from ministerial services, defined and discussed later. 2008 amended tax return In addition, all wages and self-employment income that are subject to Medicare tax are subject to a 0. 2008 amended tax return 9% Additional Medicare Tax if they are paid in excess of the applicable threshold for an individual's filing status. 2008 amended tax return Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 for any other filing status. 2008 amended tax return Medicare wages and self-employment income are combined to determine if income exceeds the threshold. 2008 amended tax return A self-employment loss is not considered for purposes of this tax. 2008 amended tax return RRTA compensation is separately compared to the threshold. 2008 amended tax return There is no employer match for Additional Medicare Tax. 2008 amended tax return For more information, see Form 8959, Additional Medicare Tax, and its separate instructions. 2008 amended tax return This publication contains information for the following classes of taxpayers. 2008 amended tax return Ministers. 2008 amended tax return Members of a religious order. 2008 amended tax return Christian Science practitioners and readers. 2008 amended tax return Religious workers (church employees). 2008 amended tax return Members of a recognized religious sect. 2008 amended tax return Note. 2008 amended tax return Unless otherwise noted, in this publication references to members of the clergy include ministers, members of a religious order (but not members of a recognized religious sect), and Christian Science practitioners and readers. 2008 amended tax return This publication covers the following topics about the collection of social security and Medicare taxes from members of the clergy, religious workers, and members of a recognized religious sect. 2008 amended tax return Which earnings are taxed under FICA and which under SECA. 2008 amended tax return See Table 1 above. 2008 amended tax return How a member of the clergy can apply for an exemption from self-employment tax. 2008 amended tax return How a member of a recognized religious sect can apply for an exemption from both self-employment tax and FICA taxes. 2008 amended tax return How a member of the clergy or religious worker figures net earnings from self-employment. 2008 amended tax return This publication also covers certain income tax rules of interest to ministers and members of a religious order. 2008 amended tax return A Comprehensive Example shows filled-in forms for a minister who has income taxed under SECA, other income taxed under FICA, and income tax reporting of items specific to a minister. 2008 amended tax return In the back of Publication 517 is a set of worksheets that you can use to figure the amount of your taxable ministerial income and allowable deductions. 2008 amended tax return You will find these worksheets right after the Comprehensive Example . 2008 amended tax return Note. 2008 amended tax return In this publication, the term “church” is generally used in its generic sense and not in reference to any particular religion. 2008 amended tax return Comments and suggestions. 2008 amended tax return   We welcome your comments about this publication and your suggestions for future editions. 2008 amended tax return   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2008 amended tax return NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2008 amended tax return Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2008 amended tax return   You can send your comments from www. 2008 amended tax return irs. 2008 amended tax return gov/formspubs/. 2008 amended tax return Click on “More Information” and then on “Give us feedback”. 2008 amended tax return   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 2008 amended tax return Ordering forms and publications. 2008 amended tax return   Visit www. 2008 amended tax return irs. 2008 amended tax return gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 2008 amended tax return Internal Revenue Service 1201 N. 2008 amended tax return Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 2008 amended tax return   If you have a tax question, check the information available on IRS. 2008 amended tax return gov or call 1-800-829-1040. 2008 amended tax return We cannot answer tax questions sent to either of the above addresses. 2008 amended tax return Useful Items - You may want to see: Publication 54 Tax Guide for U. 2008 amended tax return S. 2008 amended tax return Citizens and Resident Aliens Abroad 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 535 Business Expenses 590 Individual Retirement Arrangements (IRAs) 596 Earned Income Credit (EIC) Form (and Instructions) SS-8 Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding SS-16 Certificate of Election of Coverage Under the Federal Insurance Contributions Act Schedule C (Form 1040) Profit or Loss From Business (Sole Proprietorship) Schedule C-EZ (Form 1040) Net Profit From Business (Sole Proprietorship) Schedule SE (Form 1040) Self-Employment Tax 1040-ES Estimated Tax for Individuals 1040X Amended U. 2008 amended tax return S. 2008 amended tax return Individual Income Tax Return 4029 Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits 4361 Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners 8274 Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption From Employer Social Security and Medicare Taxes 8959 Additional Medicare Tax Ordering publications and forms. 2008 amended tax return   See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. 2008 amended tax return Prev  Up  Next   Home   More Online Publications
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The 2008 Amended Tax Return

2008 amended tax return 26. 2008 amended tax return   Car Expenses and Other Employee Business Expenses Table of Contents What's New Introduction Useful Items - You may want to see: Travel ExpensesTraveling Away From Home Tax Home Temporary Assignment or Job What Travel Expenses Are Deductible? Travel in the United States Travel Outside the United States Conventions Entertainment Expenses50% Limit What Entertainment Expenses Are Deductible? What Entertainment Expenses Are Not Deductible? Gift Expenses Transportation ExpensesArmed Forces reservists. 2008 amended tax return Parking fees. 2008 amended tax return Advertising display on car. 2008 amended tax return Car pools. 2008 amended tax return Hauling tools or instruments. 2008 amended tax return Union members' trips from a union hall. 2008 amended tax return Car Expenses RecordkeepingHow To Prove Expenses How Long To Keep Records and Receipts How To ReportGifts. 2008 amended tax return Statutory employees. 2008 amended tax return Reimbursements Completing Forms 2106 and 2106-EZ Special Rules What's New Standard mileage rate. 2008 amended tax return  For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. 2008 amended tax return Car expenses and use of the standard mileage rate are explained under Transportation Expenses , later. 2008 amended tax return Depreciation limits on cars, trucks, and vans. 2008 amended tax return  For 2013, the first-year limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars remains at $11,160 ($3,160 if you elect not to claim the special depreciation allowance). 2008 amended tax return For trucks and vans the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). 2008 amended tax return For more information, see Depreciation limits in Publication 463. 2008 amended tax return Introduction You may be able to deduct the ordinary and necessary business-related expenses you have for: Travel, Entertainment, Gifts, or Transportation. 2008 amended tax return An ordinary expense is one that is common and accepted in your trade or business. 2008 amended tax return A necessary expense is one that is helpful and appropriate for your business. 2008 amended tax return An expense does not have to be required to be considered necessary. 2008 amended tax return This chapter explains the following. 2008 amended tax return What expenses are deductible. 2008 amended tax return How to report your expenses on your return. 2008 amended tax return What records you need to prove your expenses. 2008 amended tax return How to treat any expense reimbursements you may receive. 2008 amended tax return Who does not need to use this chapter. 2008 amended tax return   If you are an employee, you will not need to read this chapter if all of the following are true. 2008 amended tax return You fully accounted to your employer for your work-related expenses. 2008 amended tax return You received full reimbursement for your expenses. 2008 amended tax return Your employer required you to return any excess reimbursement and you did so. 2008 amended tax return There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement. 2008 amended tax return If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. 2008 amended tax return See Reimbursements , later, if you would like more information on reimbursements and accounting to your employer. 2008 amended tax return    If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2. 2008 amended tax return Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business Schedule C-EZ (Form 1040) Net Profit From Business Schedule F (Form 1040) Profit or Loss From Farming Form 2106 Employee Business Expenses Form 2106-EZ Unreimbursed Employee Business Expenses Travel Expenses If you temporarily travel away from your tax home, you can use this section to determine if you have deductible travel expenses. 2008 amended tax return This section discusses: Traveling away from home, Tax home, Temporary assignment or job, and What travel expenses are deductible. 2008 amended tax return It also discusses the standard meal allowance, rules for travel inside and outside the United States, and deductible convention expenses. 2008 amended tax return Travel expenses defined. 2008 amended tax return   For tax purposes, travel expenses are the ordinary and necessary expenses (defined earlier) of traveling away from home for your business, profession, or job. 2008 amended tax return   You will find examples of deductible travel expenses in Table 26-1 . 2008 amended tax return Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. 2008 amended tax return This rest requirement is not satisfied by merely napping in your car. 2008 amended tax return You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. 2008 amended tax return Example 1. 2008 amended tax return You are a railroad conductor. 2008 amended tax return You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. 2008 amended tax return During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. 2008 amended tax return You are considered to be away from home. 2008 amended tax return Example 2. 2008 amended tax return You are a truck driver. 2008 amended tax return You leave your terminal and return to it later the same day. 2008 amended tax return You get an hour off at your turnaround point to eat. 2008 amended tax return Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. 2008 amended tax return Members of the Armed Forces. 2008 amended tax return   If you are a member of the U. 2008 amended tax return S. 2008 amended tax return Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. 2008 amended tax return You cannot deduct your expenses for meals and lodging. 2008 amended tax return You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. 2008 amended tax return If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. 2008 amended tax return    A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home aboard ship for travel expense purposes. 2008 amended tax return Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. 2008 amended tax return Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. 2008 amended tax return It includes the entire city or general area in which your business or work is located. 2008 amended tax return If you have more than one regular place of business, your tax home is your main place of business. 2008 amended tax return See Main place of business or work , later. 2008 amended tax return If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. 2008 amended tax return See No main place of business or work , later. 2008 amended tax return If you do not have a regular or a main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. 2008 amended tax return As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. 2008 amended tax return Main place of business or work. 2008 amended tax return   If you have more than one place of business or work, consider the following when determining which one is your main place of business or work. 2008 amended tax return The total time you ordinarily spend in each place. 2008 amended tax return The level of your business activity in each place. 2008 amended tax return Whether your income from each place is significant or insignificant. 2008 amended tax return Example. 2008 amended tax return You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. 2008 amended tax return You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. 2008 amended tax return Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. 2008 amended tax return No main place of business or work. 2008 amended tax return   You may have a tax home even if you do not have a regular or main place of business or work. 2008 amended tax return Your tax home may be the home where you regularly live. 2008 amended tax return Factors used to determine tax home. 2008 amended tax return   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. 2008 amended tax return You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. 2008 amended tax return You have living expenses at your main home that you duplicate because your business requires you to be away from that home. 2008 amended tax return You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. 2008 amended tax return   If you satisfy all three factors, your tax home is the home where you regularly live. 2008 amended tax return If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. 2008 amended tax return If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. 2008 amended tax return Example. 2008 amended tax return You are single and live in Boston in an apartment you rent. 2008 amended tax return You have worked for your employer in Boston for a number of years. 2008 amended tax return Your employer enrolls you in a 12-month executive training program. 2008 amended tax return You do not expect to return to work in Boston after you complete your training. 2008 amended tax return During your training, you do not do any work in Boston. 2008 amended tax return Instead, you receive classroom and on-the-job training throughout the United States. 2008 amended tax return You keep your apartment in Boston and return to it frequently. 2008 amended tax return You use your apartment to conduct your personal business. 2008 amended tax return You also keep up your community contacts in Boston. 2008 amended tax return When you complete your training, you are transferred to Los Angeles. 2008 amended tax return You do not satisfy factor (1) because you did not work in Boston. 2008 amended tax return You satisfy factor (2) because you had duplicate living expenses. 2008 amended tax return You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. 2008 amended tax return Therefore, you have a tax home in Boston. 2008 amended tax return Tax home different from family home. 2008 amended tax return   If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. 2008 amended tax return You also cannot deduct the cost of meals and lodging while at your tax home. 2008 amended tax return See Example 1 . 2008 amended tax return   If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. 2008 amended tax return See Example 2 . 2008 amended tax return Example 1. 2008 amended tax return You are a truck driver and you and your family live in Tucson. 2008 amended tax return You are employed by a trucking firm that has its terminal in Phoenix. 2008 amended tax return At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. 2008 amended tax return You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. 2008 amended tax return This is because Phoenix is your tax home. 2008 amended tax return Example 2. 2008 amended tax return Your family home is in Pittsburgh, where you work 12 weeks a year. 2008 amended tax return The rest of the year you work for the same employer in Baltimore. 2008 amended tax return In Baltimore, you eat in restaurants and sleep in a rooming house. 2008 amended tax return Your salary is the same whether you are in Pittsburgh or Baltimore. 2008 amended tax return Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. 2008 amended tax return You cannot deduct any expenses you have for meals and lodging there. 2008 amended tax return However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. 2008 amended tax return You can deduct the cost of your round trip between Baltimore and Pittsburgh. 2008 amended tax return You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. 2008 amended tax return Temporary Assignment or Job You may regularly work at your tax home and also work at another location. 2008 amended tax return It may not be practical to return to your tax home from this other location at the end of each work day. 2008 amended tax return Temporary assignment vs. 2008 amended tax return indefinite assignment. 2008 amended tax return   If your assignment or job away from your main place of work is temporary, your tax home does not change. 2008 amended tax return You are considered to be away from home for the whole period you are away from your main place of work. 2008 amended tax return You can deduct your travel expenses if they otherwise qualify for deduction. 2008 amended tax return Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. 2008 amended tax return   However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. 2008 amended tax return An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. 2008 amended tax return   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. 2008 amended tax return You may be able to deduct the cost of relocating to your new tax home as a moving expense. 2008 amended tax return See Publication 521 for more information. 2008 amended tax return Exception for federal crime investigations or prosecutions. 2008 amended tax return   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. 2008 amended tax return This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year, provided you meet the other requirements for deductibility. 2008 amended tax return   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate or prosecute, or provide support services for the investigation or prosecution of a federal crime. 2008 amended tax return Determining temporary or indefinite. 2008 amended tax return   You must determine whether your assignment is temporary or indefinite when you start work. 2008 amended tax return If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. 2008 amended tax return An assignment or job that is initially temporary may become indefinite due to changed circumstances. 2008 amended tax return A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. 2008 amended tax return Going home on days off. 2008 amended tax return   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. 2008 amended tax return You cannot deduct the cost of your meals and lodging there. 2008 amended tax return However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. 2008 amended tax return You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. 2008 amended tax return   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. 2008 amended tax return In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. 2008 amended tax return Probationary work period. 2008 amended tax return   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. 2008 amended tax return You cannot deduct any of your expenses for meals and lodging during the probationary period. 2008 amended tax return What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. 2008 amended tax return You can deduct ordinary and necessary expenses you have when you travel away from home on business. 2008 amended tax return The type of expense you can deduct depends on the facts and your circumstances. 2008 amended tax return Table 26-1 summarizes travel expenses you may be able to deduct. 2008 amended tax return You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. 2008 amended tax return When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. 2008 amended tax return You can use a log, diary, notebook, or any other written record to keep track of your expenses. 2008 amended tax return The types of expenses you need to record, along with supporting documentation, are described in Table 26-2 , later. 2008 amended tax return Separating costs. 2008 amended tax return   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. 2008 amended tax return You must have a reasonable basis for making this allocation. 2008 amended tax return For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. 2008 amended tax return Travel expenses for another individual. 2008 amended tax return   If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. 2008 amended tax return Employee. 2008 amended tax return   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. 2008 amended tax return Business associate. 2008 amended tax return   If a business associate travels with you and meets the conditions in (2) and (3) above, you can deduct the travel expenses you have for that person. 2008 amended tax return A business associate is someone with whom you could reasonably expect to engage or deal in the active conduct of your business. 2008 amended tax return A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. 2008 amended tax return Bona fide business purpose. 2008 amended tax return   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. 2008 amended tax return Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. 2008 amended tax return Example. 2008 amended tax return Jerry drives to Chicago on business and takes his wife, Linda, with him. 2008 amended tax return Linda is not Jerry's employee. 2008 amended tax return Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. 2008 amended tax return The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. 2008 amended tax return Her expenses are not deductible. 2008 amended tax return Jerry pays $199 a day for a double room. 2008 amended tax return A single room costs $149 a day. 2008 amended tax return He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. 2008 amended tax return If he uses public transportation, he can deduct only his fare. 2008 amended tax return Table 26-1. 2008 amended tax return Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. 2008 amended tax return IF you have expenses for. 2008 amended tax return . 2008 amended tax return . 2008 amended tax return THEN you can deduct the cost of. 2008 amended tax return . 2008 amended tax return . 2008 amended tax return transportation travel by airplane, train, bus, or car between your home and your business destination. 2008 amended tax return If you were provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. 2008 amended tax return If you travel by ship, see Luxury Water Travel and Cruise ships (under Conventions) in Publication 463 for additional rules and limits. 2008 amended tax return taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. 2008 amended tax return baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. 2008 amended tax return car operating and maintaining your car when traveling away from home on business. 2008 amended tax return You can deduct actual expenses or the standard mileage rate as well as business-related tolls and parking. 2008 amended tax return If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. 2008 amended tax return lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. 2008 amended tax return Meals include amounts spent for food, beverages, taxes, and related tips. 2008 amended tax return See Meals and Incidental Expenses for additional rules and limits. 2008 amended tax return cleaning dry cleaning and laundry. 2008 amended tax return telephone business calls while on your business trip. 2008 amended tax return This includes business communication by fax machine or other communication devices. 2008 amended tax return tips tips you pay for any expenses in this chart. 2008 amended tax return other other similar ordinary and necessary expenses related to your business travel. 2008 amended tax return These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. 2008 amended tax return Meals and Incidental Expenses You can deduct the cost of meals in either of the following situations. 2008 amended tax return It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. 2008 amended tax return The meal is business-related entertainment. 2008 amended tax return Business-related entertainment is discussed under Entertainment Expenses , later. 2008 amended tax return The following discussion deals only with meals (and incidental expenses) that are not business-related entertainment. 2008 amended tax return Lavish or extravagant. 2008 amended tax return   You cannot deduct expenses for meals that are lavish or extravagant. 2008 amended tax return An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. 2008 amended tax return Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. 2008 amended tax return 50% limit on meals. 2008 amended tax return   You can figure your meal expenses using either of the following methods. 2008 amended tax return Actual cost. 2008 amended tax return The standard meal allowance. 2008 amended tax return Both of these methods are explained below. 2008 amended tax return But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. 2008 amended tax return   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. 2008 amended tax return If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. 2008 amended tax return The 50% limit is explained later under Entertainment Expenses . 2008 amended tax return Accountable and nonaccountable plans are discussed later under Reimbursements . 2008 amended tax return Actual cost. 2008 amended tax return   You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. 2008 amended tax return If you use this method, you must keep records of your actual cost. 2008 amended tax return Standard meal allowance. 2008 amended tax return   Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. 2008 amended tax return It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. 2008 amended tax return The set amount varies depending on where and when you travel. 2008 amended tax return In this chapter, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . 2008 amended tax return If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. 2008 amended tax return See Recordkeeping , later. 2008 amended tax return Incidental expenses. 2008 amended tax return   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. 2008 amended tax return Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. 2008 amended tax return Incidental expenses only method. 2008 amended tax return   You can use an optional method (instead of actual cost) for deducting incidental expenses only. 2008 amended tax return The amount of the deduction is $5 a day. 2008 amended tax return You can use this method only if you did not pay or incur any meal expenses. 2008 amended tax return You cannot use this method on any day that you use the standard meal allowance. 2008 amended tax return    Federal employees should refer to the Federal Travel Regulations at  www. 2008 amended tax return gsa. 2008 amended tax return gov. 2008 amended tax return Find “What GSA Offers” and click on “Regulations: FMR, FTR, & FAR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. 2008 amended tax return 50% limit may apply. 2008 amended tax return   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. 2008 amended tax return If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. 2008 amended tax return The 50% limit is explained later under Entertainment Expenses . 2008 amended tax return Accountable and nonaccountable plans are discussed later under Reimbursements . 2008 amended tax return There is no optional standard lodging amount similar to the standard meal allowance. 2008 amended tax return Your allowable lodging expense deduction is your actual cost. 2008 amended tax return Who can use the standard meal allowance. 2008 amended tax return   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. 2008 amended tax return   Use of the standard meal allowance for other travel. 2008 amended tax return    You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. 2008 amended tax return You can also use it to figure your meal expenses when you travel for qualifying educational purposes. 2008 amended tax return You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. 2008 amended tax return Amount of standard meal allowance. 2008 amended tax return   The standard meal allowance is the federal M&IE rate. 2008 amended tax return For travel in 2013, the daily rate for most small localities in the United States is $46. 2008 amended tax return   Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. 2008 amended tax return You can find this information (organized by state) on the Internet at www. 2008 amended tax return gsa. 2008 amended tax return gov. 2008 amended tax return Click on “Per Diem Rates,” then select “2013” for the period January 1, 2013 – September 30, 2013, and select “2014” for the period October 1, 2013 – December 31, 2013. 2008 amended tax return However, you can apply the rates in effect before October 1, 2013, for expenses of all travel within the United States for 2013 instead of the updated rates. 2008 amended tax return You must consistently use either the rates for the first 9 months for all of 2013 or the updated rates for the period of October 1, 2013, through December 31, 2013. 2008 amended tax return   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. 2008 amended tax return If you work in the transportation industry, however, see Special rate for transportation workers , later. 2008 amended tax return Standard meal allowance for areas outside the continental United States. 2008 amended tax return    The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. 2008 amended tax return The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. 2008 amended tax return S. 2008 amended tax return Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. 2008 amended tax return The Department of State establishes per diem rates for all other foreign areas. 2008 amended tax return    You can access per diem rates for non-foreign areas outside the continental United States at: www. 2008 amended tax return defensetravel. 2008 amended tax return dod. 2008 amended tax return mil/site/perdiemCalc. 2008 amended tax return cfm. 2008 amended tax return You can access all other foreign per diem rates at www. 2008 amended tax return state. 2008 amended tax return gov/travel/. 2008 amended tax return Click on “Travel Per Diem Allowances for Foreign Areas” under “Foreign Per Diem Rates,” to obtain the latest foreign per diem rates. 2008 amended tax return Special rate for transportation workers. 2008 amended tax return   You can use a special standard meal allowance if you work in the transportation industry. 2008 amended tax return You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. 2008 amended tax return If this applies to you, you can claim a standard daily meal allowance of $59 ($65 for travel outside the continental United States). 2008 amended tax return   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. 2008 amended tax return If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. 2008 amended tax return Travel for days you depart and return. 2008 amended tax return   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). 2008 amended tax return You can do so by one of two methods. 2008 amended tax return Method 1: You can claim 3/4 of the standard meal allowance. 2008 amended tax return Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. 2008 amended tax return Example. 2008 amended tax return Jen is employed in New Orleans as a convention planner. 2008 amended tax return In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. 2008 amended tax return She left her home in New Orleans at 10 a. 2008 amended tax return m. 2008 amended tax return on Wednesday and arrived in Washington, DC, at 5:30 p. 2008 amended tax return m. 2008 amended tax return After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. 2008 amended tax return m. 2008 amended tax return Jen's employer gave her a flat amount to cover her expenses and included it with her wages. 2008 amended tax return Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. 2008 amended tax return Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. 2008 amended tax return For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. 2008 amended tax return Travel in the United States The following discussion applies to travel in the United States. 2008 amended tax return For this purpose, the United States includes only the 50 states and the District of Columbia. 2008 amended tax return The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. 2008 amended tax return See Part of Trip Outside the United States , later. 2008 amended tax return Trip Primarily for Business You can deduct all your travel expenses if your trip was entirely business related. 2008 amended tax return If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. 2008 amended tax return These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. 2008 amended tax return Example. 2008 amended tax return You work in Atlanta and take a business trip to New Orleans in May. 2008 amended tax return On your way home, you stop in Mobile to visit your parents. 2008 amended tax return You spend $1,996 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. 2008 amended tax return If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,696. 2008 amended tax return You can deduct $1,696 for your trip, including the cost of round-trip transportation to and from New Orleans. 2008 amended tax return The deduction for your meals is subject to the 50% limit on meals mentioned earlier. 2008 amended tax return Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. 2008 amended tax return However, you can deduct any expenses you have while at your destination that are directly related to your business. 2008 amended tax return A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. 2008 amended tax return The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. 2008 amended tax return Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later under Travel Outside the United States for that part of the trip. 2008 amended tax return For the part of your trip that is inside the United States, use the rules for travel in the United States. 2008 amended tax return Travel outside the United States does not include travel from one point in the United States to another point in the United States. 2008 amended tax return The following discussion can help you determine whether your trip was entirely within the United States. 2008 amended tax return Public transportation. 2008 amended tax return   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. 2008 amended tax return Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . 2008 amended tax return Example. 2008 amended tax return You fly from New York to Puerto Rico with a scheduled stop in Miami. 2008 amended tax return You return to New York nonstop. 2008 amended tax return The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. 2008 amended tax return Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. 2008 amended tax return Private car. 2008 amended tax return   Travel by private car in the United States is travel between points in the United States, even when you are on your way to a destination outside the United States. 2008 amended tax return Example. 2008 amended tax return You travel by car from Denver to Mexico City and return. 2008 amended tax return Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. 2008 amended tax return The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. 2008 amended tax return Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. 2008 amended tax return For this purpose, the United States includes only the 50 states and the District of Columbia. 2008 amended tax return How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. 2008 amended tax return See chapter 1 of Publication 463 for information on luxury water travel. 2008 amended tax return Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. 2008 amended tax return Travel entirely for business. 2008 amended tax return   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. 2008 amended tax return Travel considered entirely for business. 2008 amended tax return   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. 2008 amended tax return Exception 1 - No substantial control. 2008 amended tax return   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. 2008 amended tax return The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. 2008 amended tax return   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, Are not related to your employer, and Are not a managing executive. 2008 amended tax return    “Related to your employer” is defined later in this chapter under Per Diem and Car Allowances . 2008 amended tax return   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. 2008 amended tax return    A self-employed person generally has substantial control over arranging business trips. 2008 amended tax return Exception 2 - Outside United States no more than a week. 2008 amended tax return   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. 2008 amended tax return One week means 7 consecutive days. 2008 amended tax return In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. 2008 amended tax return Exception 3 - Less than 25% of time on personal activities. 2008 amended tax return   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. 2008 amended tax return For this purpose, count both the day your trip began and the day it ended. 2008 amended tax return Exception 4 - Vacation not a major consideration. 2008 amended tax return   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. 2008 amended tax return Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on nonbusiness activities, you generally cannot deduct all of your travel expenses. 2008 amended tax return You can only deduct the business portion of your cost of getting to and from your destination. 2008 amended tax return You must allocate the costs between your business and nonbusiness activities to determine your deductible amount. 2008 amended tax return These travel allocation rules are discussed in chapter 1 of Publication 463. 2008 amended tax return You do not have to allocate your travel expense deduction if you meet one of the four exceptions listed earlier under Travel considered entirely for business. 2008 amended tax return In those cases, you can deduct the total cost of getting to and from your destination. 2008 amended tax return Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. 2008 amended tax return If you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. 2008 amended tax return Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. 2008 amended tax return You cannot deduct the travel expenses for your family. 2008 amended tax return If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. 2008 amended tax return Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. 2008 amended tax return You can deduct your travel expenses only if your attendance is connected to your own trade or business. 2008 amended tax return Convention agenda. 2008 amended tax return   The convention agenda or program generally shows the purpose of the convention. 2008 amended tax return You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. 2008 amended tax return The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. 2008 amended tax return Conventions held outside the North American area. 2008 amended tax return    See chapter 1 of Publication 463 for information on conventions held outside the North American area. 2008 amended tax return Entertainment Expenses You may be able to deduct business-related entertainment expenses you have for entertaining a client, customer, or employee. 2008 amended tax return You can deduct entertainment expenses only if they are both ordinary and necessary (defined earlier in the Introduction ) and meet one of the following tests. 2008 amended tax return Directly-related test. 2008 amended tax return Associated test. 2008 amended tax return Both of these tests are explained in chapter 2 of Publication 463. 2008 amended tax return The amount you can deduct for entertainment expenses may be limited. 2008 amended tax return Generally, you can deduct only 50% of your unreimbursed entertainment expenses. 2008 amended tax return This limit is discussed next. 2008 amended tax return 50% Limit In general, you can deduct only 50% of your business-related meal and entertainment expenses. 2008 amended tax return (If you are subject to the Department of Transportation's “hours of service” limits, you can deduct 80% of your business-related meal and entertainment expenses. 2008 amended tax return See Individuals subject to “hours of service” limits , later. 2008 amended tax return ) The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed. 2008 amended tax return Figure 26-A summarizes the general rules explained in this section. 2008 amended tax return The 50% limit applies to business meals or entertainment expenses you have while: Traveling away from home (whether eating alone or with others) on business, Entertaining customers at your place of business, a restaurant, or other location, or Attending a business convention or reception, business meeting, or business luncheon at a club. 2008 amended tax return Included expenses. 2008 amended tax return   Expenses subject to the 50% limit include: Taxes and tips relating to a business meal or entertainment activity, Cover charges for admission to a nightclub, Rent paid for a room in which you hold a dinner or cocktail party, and Amounts paid for parking at a sports arena. 2008 amended tax return However, the cost of transportation to and from a business meal or a business-related entertainment activity is not subject to the 50% limit. 2008 amended tax return Application of 50% limit. 2008 amended tax return   The 50% limit on meal and entertainment expenses applies if the expense is otherwise deductible and is not covered by one of the exceptions discussed later in this section. 2008 amended tax return   The 50% limit also applies to certain meal and entertainment expenses that are not business related. 2008 amended tax return It applies to meal and entertainment expenses incurred for the production of income, including rental or royalty income. 2008 amended tax return It also applies to the cost of meals included in deductible educational expenses. 2008 amended tax return When to apply the 50% limit. 2008 amended tax return   You apply the 50% limit after determining the amount that would otherwise qualify for a deduction. 2008 amended tax return You first have to determine the amount of meal and entertainment expenses that would be deductible under the other rules discussed in this chapter. 2008 amended tax return Example 1. 2008 amended tax return You spend $200 for a business-related meal. 2008 amended tax return If $110 of that amount is not allowable because it is lavish and extravagant, the remaining $90 is subject to the 50% limit. 2008 amended tax return Your deduction cannot be more than $45 (. 2008 amended tax return 50 × $90). 2008 amended tax return Example 2. 2008 amended tax return You purchase two tickets to a concert and give them to a client. 2008 amended tax return You purchased the tickets through a ticket agent. 2008 amended tax return You paid $200 for the two tickets, which had a face value of $80 each ($160 total). 2008 amended tax return Your deduction cannot be more than $80 (. 2008 amended tax return 50 × $160). 2008 amended tax return Exceptions to the 50% Limit Generally, business-related meal and entertainment expenses are subject to the 50% limit. 2008 amended tax return Figure 26-A can help you determine if the 50% limit applies to you. 2008 amended tax return Your meal or entertainment expense is not subject to the 50% limit if the expense meets one of the following exceptions. 2008 amended tax return Employee's reimbursed expenses. 2008 amended tax return   If you are an employee, you are not subject to the 50% limit on expenses for which your employer reimburses you under an accountable plan. 2008 amended tax return Accountable plans are discussed later under Reimbursements . 2008 amended tax return Individuals subject to “hours of service” limits. 2008 amended tax return   You can deduct a higher percentage of your meal expenses while traveling away from your tax home if the meals take place during or incident to any period subject to the Department of Transportation's “hours of service” limits. 2008 amended tax return The percentage is 80%. 2008 amended tax return   Individuals subject to the Department of Transportation's “hours of service” limits include the following persons. 2008 amended tax return Certain air transportation workers (such as pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations. 2008 amended tax return Interstate truck operators and bus drivers who are under Department of Transportation regulations. 2008 amended tax return Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who are under Federal Railroad Administration regulations. 2008 amended tax return Certain merchant mariners who are under Coast Guard regulations. 2008 amended tax return Other exceptions. 2008 amended tax return   There are also exceptions for the self-employed, advertising expenses, selling meals or entertainment, and charitable sports events. 2008 amended tax return These are discussed in Publication 463. 2008 amended tax return Figure 26-A. 2008 amended tax return Does the 50% Limit Apply to Your Expenses? There are exceptions to these rules. 2008 amended tax return See Exceptions to the 50% Limit . 2008 amended tax return Please click here for the text description of the image. 2008 amended tax return Entertainment expenses: 50% limit What Entertainment Expenses Are Deductible? This section explains different types of entertainment expenses you may be able to deduct. 2008 amended tax return Entertainment. 2008 amended tax return    Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. 2008 amended tax return Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; at sporting events; or on hunting, fishing, vacation, and similar trips. 2008 amended tax return A meal as a form of entertainment. 2008 amended tax return   Entertainment includes the cost of a meal you provide to a customer or client, whether the meal is a part of other entertainment or by itself. 2008 amended tax return A meal expense includes the cost of food, beverages, taxes, and tips for the meal. 2008 amended tax return To deduct an entertainment-related meal, you or your employee must be present when the food or beverages are provided. 2008 amended tax return You cannot claim the cost of your meal both as an entertainment expense and as a travel expense. 2008 amended tax return Separating costs. 2008 amended tax return   If you have one expense that includes the costs of entertainment and other services (such as lodging or transportation), you must allocate that expense between the cost of entertainment and the cost of other services. 2008 amended tax return You must have a reasonable basis for making this allocation. 2008 amended tax return For example, you must allocate your expenses if a hotel includes entertainment in its lounge on the same bill with your room charge. 2008 amended tax return Taking turns paying for meals or entertainment. 2008 amended tax return   If a group of business acquaintances take turns picking up each others' meal or entertainment checks without regard to whether any business purposes are served, no member of the group can deduct any part of the expense. 2008 amended tax return Lavish or extravagant expenses. 2008 amended tax return   You cannot deduct expenses for entertainment that are lavish or extravagant. 2008 amended tax return An expense is not considered lavish or extravagant if it is reasonable considering the facts and circumstances. 2008 amended tax return Expenses will not be disallowed just because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. 2008 amended tax return Trade association meetings. 2008 amended tax return    You can deduct entertainment expenses that are directly related to, and necessary for, attending business meetings or conventions of certain exempt organizations if the expenses of your attendance are related to your active trade or business. 2008 amended tax return These organizations include business leagues, chambers of commerce, real estate boards, trade associations, and professional associations. 2008 amended tax return Entertainment tickets. 2008 amended tax return   Generally, you cannot deduct more than the face value of an entertainment ticket, even if you paid a higher price. 2008 amended tax return For example, you cannot deduct service fees you pay to ticket agencies or brokers or any amount over the face value of the tickets you pay to scalpers. 2008 amended tax return What Entertainment Expenses Are Not Deductible? This section explains different types of entertainment expenses you generally may not be able to deduct. 2008 amended tax return Club dues and membership fees. 2008 amended tax return   You cannot deduct dues (including initiation fees) for membership in any club organized for: Business, Pleasure, Recreation, or Other social purpose. 2008 amended tax return This rule applies to any membership organization if one of its principal purposes is either: To conduct entertainment activities for members or their guests, or To provide members or their guests with access to entertainment facilities. 2008 amended tax return   The purposes and activities of a club, not its name, will determine whether or not you can deduct the dues. 2008 amended tax return You cannot deduct dues paid to: Country clubs, Golf and athletic clubs, Airline clubs, Hotel clubs, and Clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. 2008 amended tax return Entertainment facilities. 2008 amended tax return   Generally, you cannot deduct any expense for the use of an entertainment facility. 2008 amended tax return This includes expenses for depreciation and operating costs such as rent, utilities, maintenance, and protection. 2008 amended tax return   An entertainment facility is any property you own, rent, or use for entertainment. 2008 amended tax return Examples include a yacht, hunting lodge, fishing camp, swimming pool, tennis court, bowling alley, car, airplane, apartment, hotel suite, or home in a vacation resort. 2008 amended tax return Out-of-pocket expenses. 2008 amended tax return   You can deduct out-of-pocket expenses, such as for food and beverages, catering, gas, and fishing bait, that you provided during entertainment at a facility. 2008 amended tax return These are not expenses for the use of an entertainment facility. 2008 amended tax return However, these expenses are subject to the directly-related and associated tests and to the 50% Limit discussed earlier. 2008 amended tax return Additional information. 2008 amended tax return   For more information on entertainment expenses, including discussions of the directly-related and associated tests, see chapter 2 of Publication 463. 2008 amended tax return Gift Expenses If you give gifts in the course of your trade or business, you can deduct all or part of the cost. 2008 amended tax return This section explains the limits and rules for deducting the costs of gifts. 2008 amended tax return $25 limit. 2008 amended tax return   You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year. 2008 amended tax return A gift to a company that is intended for the eventual personal use or benefit of a particular person or a limited class of people will be considered an indirect gift to that particular person or to the individuals within that class of people who receive the gift. 2008 amended tax return   If you give a gift to a member of a customer's family, the gift is generally considered to be an indirect gift to the customer. 2008 amended tax return This rule does not apply if you have a bona fide, independent business connection with that family member and the gift is not intended for the customer's eventual use or benefit. 2008 amended tax return   If you and your spouse both give gifts, both of you are treated as one taxpayer. 2008 amended tax return It does not matter whether you have separate businesses, are separately employed, or whether each of you has an independent connection with the recipient. 2008 amended tax return If a partnership gives gifts, the partnership and the partners are treated as one taxpayer. 2008 amended tax return Incidental costs. 2008 amended tax return   Incidental costs, such as engraving on jewelry, or packaging, insuring, and mailing, are generally not included in determining the cost of a gift for purposes of the $25 limit. 2008 amended tax return   A cost is incidental only if it does not add substantial value to the gift. 2008 amended tax return For example, the cost of customary gift wrapping is an incidental cost. 2008 amended tax return However, the purchase of an ornamental basket for packaging fruit is not an incidental cost if the value of the basket is substantial compared to the value of the fruit. 2008 amended tax return Exceptions. 2008 amended tax return   The following items are not considered gifts for purposes of the $25 limit. 2008 amended tax return An item that costs $4 or less and: Has your name clearly and permanently imprinted on the gift, and Is one of a number of identical items you widely distribute. 2008 amended tax return Examples include pens, desk sets, and plastic bags and cases. 2008 amended tax return Signs, display racks, or other promotional material to be used on the business premises of the recipient. 2008 amended tax return Gift or entertainment. 2008 amended tax return   Any item that might be considered either a gift or entertainment generally will be considered entertainment. 2008 amended tax return However, if you give a customer packaged food or beverages you intend the customer to use at a later date, treat it as a gift. 2008 amended tax return    If you give a customer tickets to a theater performance or sporting event and you do not go with the customer to the performance or event, you have a choice. 2008 amended tax return You can treat the cost of the tickets as either a gift expense or an entertainment expense, whichever is to your advantage. 2008 amended tax return    If you go with the customer to the event, you must treat the cost of the tickets as an entertainment expense. 2008 amended tax return You cannot choose, in this case, to treat the cost of the tickets as a gift expense. 2008 amended tax return Transportation Expenses This section discusses expenses you can deduct for business transportation when you are not traveling away from home as defined earlier under Travel Expenses . 2008 amended tax return These expenses include the cost of transportation by air, rail, bus, taxi, etc. 2008 amended tax return , and the cost of driving and maintaining your car. 2008 amended tax return Transportation expenses include the ordinary and necessary costs of all of the following. 2008 amended tax return Getting from one workplace to another in the course of your business or profession when you are traveling within the area of your tax home. 2008 amended tax return (Tax home is defined earlier under Travel Expenses . 2008 amended tax return ) Visiting clients or customers. 2008 amended tax return Going to a business meeting away from your regular workplace. 2008 amended tax return Getting from your home to a temporary workplace when you have one or more regular places of work. 2008 amended tax return These temporary workplaces can be either within the area of your tax home or outside that area. 2008 amended tax return Transportation expenses do not include expenses you have while traveling away from home overnight. 2008 amended tax return Those expenses are travel expenses, discussed earlier. 2008 amended tax return However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction. 2008 amended tax return See Car Expenses , later. 2008 amended tax return Illustration of transportation expenses. 2008 amended tax return    Figure 26-B illustrates the rules for when you can deduct transportation expenses when you have a regular or main job away from your home. 2008 amended tax return You may want to refer to it when deciding whether you can deduct your transportation expenses. 2008 amended tax return Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses. 2008 amended tax return However, there are many exceptions for deducting transportation expenses, like whether your work location is temporary (inside or outside the metropolitan area), traveling for same trade or business, or if you have a home office. 2008 amended tax return Temporary work location. 2008 amended tax return   If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance. 2008 amended tax return   If your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary unless there are facts and circumstances that would indicate otherwise. 2008 amended tax return   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. 2008 amended tax return   If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. 2008 amended tax return It will not be treated as temporary after the date you determine it will last more than 1 year. 2008 amended tax return   If the temporary work location is beyond the general area of your regular place of work and you stay overnight, you are traveling away from home. 2008 amended tax return You may have deductible travel expenses as discussed earlier in this chapter. 2008 amended tax return No regular place of work. 2008 amended tax return   If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. 2008 amended tax return   Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. 2008 amended tax return   You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. 2008 amended tax return These are nondeductible commuting expenses. 2008 amended tax return Two places of work. 2008 amended tax return   If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. 2008 amended tax return However, if for some personal reason you do not go directly from one location to the other, you cannot deduct more than the amount it would have cost you to go directly from the first location to the second. 2008 amended tax return   Transportation expenses you have in going between home and a part-time job on a day off from your main job are commuting expenses. 2008 amended tax return You cannot deduct them. 2008 amended tax return Armed Forces reservists. 2008 amended tax return   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. 2008 amended tax return You can deduct the expense of getting from one workplace to the other as just discussed under Two places of work , earlier. 2008 amended tax return   You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. 2008 amended tax return In this case, your transportation generally is a nondeductible commuting expense. 2008 amended tax return However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. 2008 amended tax return   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. 2008 amended tax return   If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. 2008 amended tax return These expenses are discussed earlier under Travel Expenses . 2008 amended tax return   If you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you may be able to deduct some of your reserve-related travel costs as an adjustment to income rather than as an itemized deduction. 2008 amended tax return See Armed Forces reservists traveling more than 100 miles from home under Special Rules, later. 2008 amended tax return Commuting expenses. 2008 amended tax return   You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. 2008 amended tax return These costs are personal commuting expenses. 2008 amended tax return You cannot deduct commuting expenses no matter how far your home is from your regular place of work. 2008 amended tax return You cannot deduct commuting expenses even if you work during the commuting trip. 2008 amended tax return Example. 2008 amended tax return You sometimes use your cell phone to make business calls while commuting to and from work. 2008 amended tax return Sometimes business associates ride with you to and from work, and you have a business discussion in the car. 2008 amended tax return These activities do not change the trip from personal to business. 2008 amended tax return You cannot deduct your commuting expenses. 2008 amended tax return Parking fees. 2008 amended tax return   Fees you pay to park your car at your place of business are nondeductible commuting expenses. 2008 amended tax return You can, however, deduct business-related parking fees when visiting a customer or client. 2008 amended tax return Advertising display on car. 2008 amended tax return   Putting display material that advertises your business on your car does not change the use of your car from personal use to business use. 2008 amended tax return If you use this car for commuting or other personal uses, you still cannot deduct your expenses for those uses. 2008 amended tax return Car pools. 2008 amended tax return   You cannot deduct the cost of using your car in a nonprofit car pool. 2008 amended tax return Do not include payments you receive from the passengers in your income. 2008 amended tax return These payments are considered reimbursements of your expenses. 2008 amended tax return However, if you operate a car pool for a profit, you must include payments from passengers in your income. 2008 amended tax return You can then deduct your car expenses (using the rules in this chapter). 2008 amended tax return Hauling tools or instruments. 2008 amended tax return   Hauling tools or instruments in your car while commuting to and from work does not make your car expenses deductible. 2008 amended tax return However, you can deduct any additional costs you have for hauling tools or instruments (such as for renting a trailer you tow with your car). 2008 amended tax return Union members' trips from a union hall. 2008 amended tax return   If you get your work assignments at a union hall and then go to your place of work, the costs of getting from the union hall to your place of work are nondeductible commuting expenses. 2008 amended tax return Although you need the union to get your work assignments, you are employed where you work, not where the union hall is located. 2008 amended tax return Office in the home. 2008 amended tax return   If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. 2008 amended tax return (See chapter 28 for information on determining if your home office qualifies as a principal place of business. 2008 amended tax return ) Figure 26-B. 2008 amended tax return When Are Transportation Expenses Deductible? Most employees and self-employed persons can use this chart. 2008 amended tax return (Do not use this chart if your home is your principal place of business. 2008 amended tax return See Office in the home . 2008 amended tax return ) Please click here for the text description of the image. 2008 amended tax return Figure 26-B. 2008 amended tax return Local Transportation Examples of deductible transportation. 2008 amended tax return   The following examples show when you can deduct transportation expenses based on the location of your work and your home. 2008 amended tax return Example 1. 2008 amended tax return You regularly work in an office in the city where you live. 2008 amended tax return Your employer sends you to a 1-week training session at a different office in the same city. 2008 amended tax return You travel directly from your home to the training location and return each day. 2008 amended tax return You can deduct the cost of your daily round-trip transportation between your home and the training location. 2008 amended tax return Example 2. 2008 amended tax return Your principal place of business is in your home. 2008 amended tax return You can deduct the cost of round-trip transportation between your qualifying home office and your client's or customer's place of business. 2008 amended tax return Example 3. 2008 amended tax return You have no regular office, and you do not have an office in your home. 2008 amended tax return In this case, the location of your first business contact inside the metropolitan area is considered your office. 2008 amended tax return Transportation expenses between your home and this first contact are nondeductible commuting expenses. 2008 amended tax return Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. 2008 amended tax return While you cannot deduct the costs of these first and last trips, you can deduct the costs of going from one client or customer to another. 2008 amended tax return With no regular or home office, the costs of travel between two or more business contacts in a metropolitan area are deductible while the costs of travel between the home to (and from) business contacts are not deductible. 2008 amended tax return Car Expenses If you use your car for business purposes, you may be able to deduct car expenses. 2008 amended tax return You generally can use one of the two following methods to figure your deductible expenses. 2008 amended tax return Standard mileage rate. 2008 amended tax return Actual car expenses. 2008 amended tax return If you use actual car expenses to figure your deduction for a car you lease, there are rules that affect the amount of your lease payments you can deduct. 2008 amended tax return See Leasing a car under Actual Car Expenses, later. 2008 amended tax return In this chapter, “car” includes a van, pickup, or panel truck. 2008 amended tax return Rural mail carriers. 2008 amended tax return   If you are a rural mail carrier, you may be able to treat the amount of qualified reimbursement you received as the amount of your allowable expense. 2008 amended tax return Because the qualified reimbursement is treated as paid under an accountable plan, your employer should not include the amount of reimbursement in your income. 2008 amended tax return   If your vehicle expenses are more than the amount of your reimbursement, you can deduct the unreimbursed expenses as an itemized deduction on Schedule A (Form 1040). 2008 amended tax return You must complete Form 2106 and attach it to your Form 1040. 2008 amended tax return   A “qualified reimbursement” is the reimbursement you receive that meets both of the following conditions. 2008 amended tax return It is given as an equipment maintenance allowance (EMA) to employees of the U. 2008 amended tax return S. 2008 amended tax return Postal Service. 2008 amended tax return It is at the rate contained in the 1991 collective bargaining agreement. 2008 amended tax return Any later agreement cannot increase the qualified reimbursement amount by more than the rate of inflation. 2008 amended tax return See your employer for information on your reimbursement. 2008 amended tax return If you are a rural mail carrier and received a qualified reimbursement, you cannot use the standard mileage rate. 2008 amended tax return Standard Mileage Rate You may be able to use the standard mileage rate to figure the deductible costs of operating your car for business purposes. 2008 amended tax return For 2013, the standard mileage rate for business use is 56½ cents per mile. 2008 amended tax return If you use the standard mileage rate for a year, you cannot deduct your actual car expenses for that year, but see Parking fees and tolls, later. 2008 amended tax return You generally can use the standard mileage rate whether or not you are reimbursed and whether or not any reimbursement is more or less than the amount figured using the standard mileage rate. 2008 amended tax return See Reimbursements under How To Report, later. 2008 amended tax return Choosing the standard mileage rate. 2008 amended tax return   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. 2008 amended tax return Then in later years, you can choose to use either the standard mileage rate or actual expenses. 2008 amended tax return   If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. 2008 amended tax return   You must make the choice to use the standard mileage rate by the due date (including extensions) of your return. 2008 amended tax return You cannot revoke the choice. 2008 amended tax return However, in a later year, you can switch from the standard mileage rate to the actual expenses method. 2008 amended tax return If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation. 2008 amended tax return Example. 2008 amended tax return Larry is an employee who occasionally uses his own car for business purposes. 2008 amended tax return He purchased the car in 2011, but he did not claim any unreimburse