Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Tax Information for
Small Businesses
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
CONSTRUCTION
Travel & Entertainment
IRC Sections 162 & 274
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Categories of Travel & Entertainment
• Local Transportation
• Out-of-Town Travel
• Meals and Entertainment Expenses
• Gifts
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Business Trips
• Getting from one workplace to another
• Visiting clients or customers
• Going to a business meeting
• Getting from your home to a temporary
workplace when you have one or more
regular places of work
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Standard Mileage Rate
• Multiply business miles by a predetermined
rate per mile
• Includes costs for depreciation, garage rent,
gas, insurance, lease payments, licenses, oil,
registration fees, repairs, and tires
• Does not include parking fees, tolls, and car
loan interest
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Standard Mileage Rate Not Allowed
• When car is used for hire (taxi)
• When operating five or more vehicles simultaneously
• When depreciation or Section 179 was taken in a
prior year
• Claimed actual costs on a leased car after 1997
• Claimed actual costs for the auto in any prior year
(leased or not)
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Actual Vehicle Costs
• Multiply the business usage percentage
against the total of depreciation, garage rent,
gas, insurance, lease payments, licenses, oil,
registration fees, repairs, and tires.
Internal Revenue Service
Small Business and Self-Employed
Taxpayer Education and Communication
Commuting
• Transportation cost