• Here's a handy summary of popular tax deductions. Check with us to see which deductions apply to your situation.
Two methods are used to calculate automobile expenses for business use:
• Actual Expenses: Depreciation, licenses, repairs, gas, oil, tires, insurance, tolls, parking fees, lease fees, rental fees.
• Standard Mileage Rate: 50ยข per mile (2010). Certain expenses such as tolls and parking fees are deductible using the standard mileage rate or under actual expenses.
To substantiate auto deductions, a log should be kept to show where, why and whom you visited each day, as well as the number of miles driven.
Maximum Depreciation on
Automobiles, Trucks and Vans
| Placed In Service 2007 | Placed In Service 2006 | |||
| Standard | Trucks/Vans | Standard | Trucks/Vans | |
| 1st year (regular) | $3,060*** | $3,260 | $2,960 | $3,260 |
| 2nd year | $4,900 | $5,200 | $4,800 | $5,200 |
| 3rd year | $2,850 | $3,050 | $2,850 | $3,150 |
| 4th year + | $1,775 | $1,875 | $1,775 | $1,875 |
* Vehicles defined as having GVW under 6,000 lbs. Automobiles use unloaded GVW; trucks use loaded. Vehicles heavier than 6,000 lbs. are not subject to these limits.
** Refers only to trucks, vans or SUVs built on a truck chassis.
*** Note: This amount jumps to $11,060 in 2008 as a result of the Economic Stimulus Act of 2008.
Business Trips, Conventions, Meetings
Within the USA
| 0% Deductible | 50% Deductible | 100% Deductible |
| Lavish or extravagant expenses | Meals and entertainment (75 percent deductible for transport workers, subject to Department of Transportation hours-of-service limitations.) | Hotel, transportation expenses |
| Luxury water travel (cost in excess of twice the federal per diem rate, subject to certain exceptions) | Tips for meals and entertainment | Cleaning and laundry |
| Business luncheons at clubs | Cost of meeting rooms | |
| Registration fees | ||
| Tips (other than for meals and entertainment) |
Proper documentation includes records of who, what, where, how much, and business relationships. Receipt required for expenses $75 or more.
| 0% Deductible | 50% Deductible | 100% Deductible |
| Business gifts in excess of $25 per person per year | Restaurant meals - requires a member of your business to be present | Cost of travel to entertainment events |
| Lavish or extravagant expenses | Night clubs, social events, sporting events, theater, sporting trips, etc. | Entertainment and meal expenses billed to customer, if record provided to customer |
| Cost of entertainment facilities | Food at any of the above events | Holiday cards and decorations |
| Facility operating costs | Tips for meals and entertainment (Note: All entertainment requires active business discussion before, during or after the entertainment event.) | Food provided to the general public (in nature of advertising) |
| Skyboxes - cost in excess of regular non-luxury box seat | Business gifts costing less than $25 per person per year |
| 0% Deductible | 50% Deductible | 100% Deductible |
| Meals provided in employer sponsored eating facility (if 50 percent or fewer employees meet the convenience-of-employer test) | Meals and entertainment included in employee's compensation | |
| Meals and entertainment included in Form 1099 for non-employees | ||
| Recreational expenses for non highly compensated employees | ||
| Employee holiday parties, annual picnic, sports teams and expenses | ||
| Cash gifts to employees required to be included in compensation | ||
| Non-cash gifts to employees - value in excess of $25 - required to be included in compensation (exception for employee award programs) | ||
| Meals provided in employer sponsored eating facility (if more than 50 percent of employees meet the convenience-of-employer test) |
