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Can I expense vacation costs if I've conducted business?

  • expenses?
  • Can I expense vacation costs if I've conducted business?
  • What is included in the cost of goods sold
  • How do I maximize the deductions for my side gig?
  • Are there any tax benefits if I employ my family members?
  • Can I deduct business use of my phone and car?
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Employee Tax Expert

Can I expense vacation costs if I've conducted business?

1. Yes part of the vacation cost that is applicable to conducting business is deductible as a business expense given that trip satisfies following conditions:

  •  Your ususal place of business is your tax home, travel expenses for travel outside your tax home for two days or more related to busines
  •  The majority of the trip shoujld be related to your business, that is more than 50% of days should be spent conducting business. Then you can deduct the percentage that is for business purposes only
  •  The expenses should not be extravagant and should be ordinary and necessary in your line of business
  •  Document the details about the trip - Business purpse, clients met, how many days spent on busines and any other relevanty details.

2.Cost of goods sold, or COGS, is the total cost a business has paid out of pocket to sell a product or service. Cost of Good Sold can include the costs for :

  •  Purchasing items for resale, including shipping.
  •  Materials to make or manufacture products.
  •  Packaging such as boxes to ship orders.
  •  Costs for shipping and freight.
  •  Direct labor for making or manufacturing products or to provide services.
  •  Sales costs such as commissions paid to salespeople.

3. To maximize deductions for any business, keep copius records for every spenditure for business. 

To understand the expenses, you may be able to claim as a deduction, you'll need to first determine the difference between them

Ordinary expenses are those that are common and prevalant in your business

Necessary expenses are those that are required and adequate in your field of work

Common deductible expenses for a side gig worker are lsued below:

  • Business mileage of your car
  • Deus and subscriptions paid to business related organizations
  • Necessary tools and equipment
  • Tution for work related education
  • Home office tax deduction

4. Employing family members can be a useful strategy to reduce overall tax liability. If the family member is a bona fide employee, then the taxpayer can deduct the wages and benefits. The wages must be reasonable for the work performed. The business will need an EIN number to have employees on payroll. Additionally, there will be tax withholding requirements (social security, medicare and income tax) plus the employer taxes such as social security, medicare and unemployment taxes for federal and state and quarterly and annual payroll returns will need to be filed.

5. Business use of phone and car is a deductible bsuiness expense.

If you travel for business, even short distances within your own city, you may deduct the dollar value of business miles traveled on your tax return. Make sure to keep pertinent records of the miles driven for business 

  • the mileage for each business use
  • the total mileage for the year
  • the time (date will do), place (your destination), and business purpose of each trip
  • odometer readings at the start and end of the year

If you're self-employed and you use your cellphone for business, you can claim the business use of your phone as a tax deduction. If 30 percent of your time on the phone is spent on business, you could legitimately deduct 30 percent of your phone bill.

Tax Considerations for Gig Economy Workers with Multiple Jobs 

Top Tax Write-offs for the Self-Employed 

Can Cellphone Expenses Be Tax Deductible with a Business? Employing family members 



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