How To Get the IRS to Pay for Your Travel Expenses
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Is there a way to make the IRS pay for a portion of your travel expenses? Most business owners know you can take tax deductions for business-related travel expenses. But what does that really mean?
Today we are going to cover tax-deductible expenses, commonly called write-offs. It is important to understand what it means to have a tax deduction. It is also critical to understand how a tax deduction benefits you.
Note: This particular deduction only applies to business owners or the self-employed.
Income Tax Basics
If you have a business bringing in profits, you are paying taxes. Most likely, you are paying income tax and possibly corporate or self-employment tax.
Let’s say a person brings in just under $100,000. The federal income tax rate is 22% of their net income. Keep in mind that those who make more have a higher tax rate. On top of income tax, they also pay self-employment tax or a combined social security tax at 15.3% of their net income.
That means that just in federal taxes, they are paying approximately 37.5% of their income. Additionally, depending on the state the person lives in, they will be paying state taxes too. For this example, we will say the person lives in Illinois. In Illinois, the income tax rate is 5%.
That means that between federal and state taxes, that person is paying 42% of their income toward taxes. That breaks down to $42,000 per every $100,000 in profit.
Tax Deductible Travel
Now let’s say this person needs to travel for both business and personal reasons. To get a full deduction, the primary purpose of the travel must be “an ordinary and necessary” business purpose.
This particular trip is going to cost $3,000. Having ensured that the trip’s purpose was primarily business, the person now gets to write off 100% of that $3,000.
Of course, the $3,000 was still spent. The trip might have been nice, but the $3,000 is gone. The real benefit of the deduction is that now the person has avoided the 42.5% tax. In this example, the trip only cost $1,775, not the full $3,000!
That is how deductions work, and that is how you can get the IRS to cover part of your travel.
****************
To see the full blog article, click here: https://www.stopirsproblem.com/tax-attorney-il-blog/how-to-get-the-irs-to-pay-for-your-travel-expenses/
****************
#IRS #TaxDebt #TaxAdvisor #taxlawyer #taxlawoffices
Видео How To Get the IRS to Pay for Your Travel Expenses канала IRS Insiders with J. Anton
(312)-212-1000
Get Free Strategy Session - https://www.stopirsproblem.com/strategy-sessions/
💚💚SUBSCRIBE HERE💚💚
https://www.youtube.com/channel/UCTMBgEEum7mipVplLjgaOLQ
Do not miss this VALUABLE INFORMATION.
**************
Is there a way to make the IRS pay for a portion of your travel expenses? Most business owners know you can take tax deductions for business-related travel expenses. But what does that really mean?
Today we are going to cover tax-deductible expenses, commonly called write-offs. It is important to understand what it means to have a tax deduction. It is also critical to understand how a tax deduction benefits you.
Note: This particular deduction only applies to business owners or the self-employed.
Income Tax Basics
If you have a business bringing in profits, you are paying taxes. Most likely, you are paying income tax and possibly corporate or self-employment tax.
Let’s say a person brings in just under $100,000. The federal income tax rate is 22% of their net income. Keep in mind that those who make more have a higher tax rate. On top of income tax, they also pay self-employment tax or a combined social security tax at 15.3% of their net income.
That means that just in federal taxes, they are paying approximately 37.5% of their income. Additionally, depending on the state the person lives in, they will be paying state taxes too. For this example, we will say the person lives in Illinois. In Illinois, the income tax rate is 5%.
That means that between federal and state taxes, that person is paying 42% of their income toward taxes. That breaks down to $42,000 per every $100,000 in profit.
Tax Deductible Travel
Now let’s say this person needs to travel for both business and personal reasons. To get a full deduction, the primary purpose of the travel must be “an ordinary and necessary” business purpose.
This particular trip is going to cost $3,000. Having ensured that the trip’s purpose was primarily business, the person now gets to write off 100% of that $3,000.
Of course, the $3,000 was still spent. The trip might have been nice, but the $3,000 is gone. The real benefit of the deduction is that now the person has avoided the 42.5% tax. In this example, the trip only cost $1,775, not the full $3,000!
That is how deductions work, and that is how you can get the IRS to cover part of your travel.
****************
To see the full blog article, click here: https://www.stopirsproblem.com/tax-attorney-il-blog/how-to-get-the-irs-to-pay-for-your-travel-expenses/
****************
#IRS #TaxDebt #TaxAdvisor #taxlawyer #taxlawoffices
Видео How To Get the IRS to Pay for Your Travel Expenses канала IRS Insiders with J. Anton
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13 сентября 2022 г. 20:50:17
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