Self-employed travel expenses

[Randall4]

I am self-employed. Just before leaving for some personal travel, I received a request to do some consulting which would take place during my personal travel period. Thus, during my travel. I needed to take several days from my personal travel time to prepare for this consulting. Can I deduct those preparation days in addition to the days where I performed the actual consulting (lodging and per diem)?

[AmyC · Accepted solution]

Imagine you are an employer, sending an employee to do this job. How much time would you pay him to be gone for the job? What expenses would you reimburse? How many days would you pay an employee to do that? Think of your self as the employer, who happens to be the employee. The IRS looks as you as the employer if you are audited. As long as your records are solid and you feel good about your proof, go for what a normal business would allow.

Small Business and Self-Employed Tax Center - complete guide

•  About Schedule C (Form 1040), Profit or Loss from Business ...    
• Publication 535, Business Expenses
• Publication 583, Starting a Business and Keeping Records
• Self-Employment Taxes
• Form 1040-ES, Estimated Tax for Individuals
• Deducting Expenses
• Recordkeeping
• Hobby or a Business. 

[Woodworker1218]

I am helping my son with his taxes and he gets W2s and W9s.  He gets reimbursed for expenses but they are included as part of his income.  I have shown the expenses in my turbo tax deluxe but it does not seem to provide any benefit for the amount of taxes owed is the same with expenses included or not.  Do I need to use a different Turbo tax product or what?

[VolvoGirl]

@Woodworker1218   Are you using the Online version or the Desktop program?  And he gets a 1099Misc right?  Not a W9.

For Online......

That is self employment income.

You can enter Self Employment Income into Online Deluxe or Premier but if you have any expenses you will have to upgrade to the Self Employed version.

How to enter income from Self Employment

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

[Woodworker1218]

I am using desktop version  not on line.  Do I still need to use Self Employment version?

[Woodworker1218]

Yes  he gets a 1099 MISC

[VolvoGirl]

All the Desktop programs have the same forms. You just get more help and guidance in the higher versions.  In the Desktop program the Self Employed version is called Home & Business.  

[Woodworker1218]

Is that why in the Deluxe version it does not do anything with the expenses I enter?  It has a place where I can put them in but it has no affect on what he owes.  I would think it would make a significant impact.  

[VolvoGirl]

You can enter expenses in the Deluxe Desktop program.  Business expenses will reduce your net profit on schedule C which will lower your taxable income. But even though you are reducing the regular income tax on your total AGI, you will still owe Self Employment tax on a net profit of $400 or more on schedule C.

Some expenses, such as home office or section 179 depreciation can only be used to reduce your schedule C taxable income to zero, and not to create a loss. Excess deductions for these carry over to the next year. And you have to answer yes to both questions about exclusive and regular use, not just one. The area of your home office must be used regularly and exclusively for business to deduct it.

Switch to Forms, click Forms in the upper right or left,  and open schedule C and see what is showing.  

Or you checked the box on 32b saying Some Investment is Not at Risk. If you don't know what it means then probably All your Investment is at Risk (check Box 32a). It means you are using your own money for the business. If you have money not at risk you can not take a loss on schedule C.

[Woodworker1218]

I will try that and see if that will address my issue.  It will be a few days before I can do it though.  Thanks for the help