Business Tax Deductions: How To Deduct Expenses Without Keeping Receipts

Business Tax Deductions: How To Deduct Expenses Without Keeping Receipts

No receiving, no deduction, right? Much conversation, all right. The mantra of small business bookkeeping has been relentlessly burdensome for decades: " No Receiving, No Deduction. "

My own tax clients are quick to brood over me of this basic recordkeeping rule. Over the years I ' ve heard this alive with times: " But I don ' t have any receipts. I guess I can ' t take the deduction, right? "

What ' s my response to the " No Acceptance, No Deduction " lament? " Not so fast! Wherever there ' s a tax rule, there ' s an exception to the rule. "

In certain situations, taking deductions without a receipt is actually sanctioned by the IRS. Here are three legal exceptions to the " No Obtaining, No Deduction " rule.

EXCEPTION #1: Vehicle Assessment You are allowed to deduct your vehicle expenses to the extent that you used your vehicle for business. If you drove your car 100 % for business, then 100 % of your vehicle expenses are deductible.

And you have two options for signal those vehicle expenses: 1 ) The Actual Charge Technique 2 ) The Usage Method

Our focus here is on Option #2 - - over with the Custom New wrinkle your vehicle amount is cleverly the number of business miles times the endorsed IRS hang-up degree.

For 2009, this ratio is 55 cents per mile. In 2009, if you drove your vehicle 10, 000 miles for business, you can report a deduction of $5, 500 - - without having to keep any receipts for gasoline, oil changes, repairs and maintenance, insurance, etc.

You do have to document your business practice via a written log of some sort, but this is regularly much easier than saving all those receipts for actual vehicle expenses.

EXCEPTION #2: Meals While Pilgrimage When caravan out - of - town on an overnight business trip, you can deduct the actual charge of your meals ( by keeping the getting ), or you can rely on the little known " Per Diem Rule " ( which requires no getting ).

The Per Diem Custom gives you a daily meal allowance for each day of the trip, depending on what part of the country you visit. For example, the per diem meal percentage for Birmingham, AL is $44; for San Francisco, it ' s $64 ( as of 9 / 30 / 08 ).

To find the per diem amounts for every state, go to: http: / / www. irs. gov / publications / p1542 / ar02. html

EXCEPTION #3: The $75 Dollar Rule Here ' s other easy way to avoid the hassle of saving receipts - - this one involves your business meal and spree expenses. Swear by it or not, the IRS does not have need a acceptance when your business meal or orgy equivalent is less than $75 per equivalent.

Sound too good to be true? Well, there is a " take ", of march: you reposing must maintain a enter of the alongside five facts agnate to the deductible conjuncture:

1 ) WHO did you eat with or carry? i. e. the names of the people and the quality of their business relationship to you

2 ) WHEN did the entertainment happen? i. e. the date

3 ) WHERE did the entertainment occur? i. e. the name of the restaurant or other venue

4 ) WHY did you meet? i. e. a description of the business purpose of the meal or event

5 ) HOW MUCH did you spend? i. e. the dollar amount

You should enter these five facts in a log. Your daily appointment book or day - digital watch is the perfect zone to jot this down in less than a minute. Having met the IRS investigation requirements, you can then propel away the receiving. In the ceremony of an fresh look, you ' ll be covered.

Two final comments: Exception #2 applies to overnight travel situations, regardless of whether you eat your meals alone or with business associates. Exception #3 applies to meals and entertainment expenses incurred when you are with someone with whom you have an existing or approaching business relationship, regardless of whether you are in town or in overnight travel class.

Reduce Your Medical Expenses With A Health Savings Account

Reduce Your Medical Expenses With A Health Savings Account

Health Savings Accounts or HSAs are a new healthcare financing option introduced in 2004 that allows consumers to set up tax - deferred investment accounts susceptive to their health insurance policy and to use these tax - deferred funds to pay for incurred medical expenses. In essence, after setting up and funding an HSA in accord with Federal and state regulations, you will be able to pay for many health - related expenses using pre - tax money. For most people, this is equivalent to getting a 15 % to 40 % discount on licensed medical expenses! Consumers will discern even further savings by purchasing health insurance with a high deductible level - - a quality necessary to qualify for an HSA. In most cases, the benefits available subservient the HSA will counteract the risk of that higher deductible level.
Let ' s peek at how an HSA is normally plain to better note how this financial instrument works. An individual or family needs health insurance coverage, but must manage their overall expenses for healthcare. They choose a policy with a high deductible level ( required for an HSA ) in order to reduce their observation premium. But, they are careful to select a plan that offers an attached HSA with the policy. Each tax year, this individual or family contributes funds into their HSA as follows ( 2006 rates ): singles - $2700; families - $5450; and persons over 55 - an supplementary $700 per person. The actual contribution amount is claimed as a deduction against gross income on their tax return, reducing the amount of taxable income by an equal amount, even if they do not itemize deductions. The money in the HSA receives tax treatment congruous to an IRA, and the investment produce of the money is not taxable while it remains within the account. At any time, money in the HSA can be withdrawn as needed to pay medical expenses without ever paying taxes or penalties. Finally, upon a person coming the age of 65, HSA money can be simple or jaded for any purpose without due process or taxes.
Another stirring advantage of an HSA is the downreaching ostentatiousness of medical expenses exact valid for the use of HSA pre - tax skin. Here is just a ideal of the types of services that can be paid for with HSA ( pre - tax ) money:
Dental - All expenses for regular exams, Osculation - rays, cleanings, crowns, orthodontics, periodontics, dental supplies ( toothpaste, floss ) and prepaid dental plans.
Vision - All expenses for eye examinations, glasses, empiricism lenses, prescription sunglasses, and vision supplies ( eyeglass cleanser, eye drops and evidence lens solution ).
Doctors - All expenses for office visits, labs, Sugar - rays, medical supplies for asthma or diabetes, maternity, hospitalization, urgent care or emergency care.
Mental Healthcare - All expenses for psychiatrists, psychologists, therapists and counseling.
Alternative medicine - All expenses associated with naturopathic, chiropractic, acupuncture, homeopathy, ayurvedic medicine, and herbal medicine, all of which are not normally covered by health insurance.
For people seeking a way to lock on good healthcare coverage for themselves or their families at a impartial price, the HSA is a costly tool in their arsenal. With the benefits offered through an HSA, they can choose an insurance policy with a high deductible, thereby dramatically reducing their statement premium. When they take a portion of their weekly premium savings and boodle their HSA, they will instanter have access to discounted, pre - tax funds to pay for a wide variety of out - of - pocket medical expenses. And, if medical expenses remain low, the HSA savings will remain in the account for future years and for investment rise over time, much equaling a acknowledged IRA.

Tap An Hsa To Cover Post - retirement Medical Expenses

Tap An Hsa To Cover Post - retirement Medical Expenses

Tap an HSA to Cover Post - Retirement Medical Expenses

As U. S. health care costs outlast to climb to unprecedented heights, Health Savings Accounts ( HSAs ) are growing increasingly popular throughout the nation. Created beneath the Medicare Modernization Act of 2003, HSAs acquiesce consumers to use tax - free savings to cover medical costs while giving them more control over their health care coverage.

Attractive features
HSAs offer many helpful advantages. For one, HSA account holders can choose their own doctors and even shop around for the best deal on medical services. Plus, HSAs offer some expensive tax shot. Contributions to an HSA plan are tax deductible, and there are no taxes on HSA investment evolution or withdrawals, so long as the money goes towards licensed medical expenses.
Additionally, unlike Flexible Spending Accounts that have a use it or lose it clutch, funds in an HSA roll over from one year to the next. This allows HSA owners to accumulate a sizable pool of money over the years which can be successive penniless after retirement.

Powerful enough for post - retirement?
While HSAs are powerful plans, the jury is still out on whether these accounts can finances all of a persons post - retirement health care expenses. Most consumers dont comprehend just how much money theyll need to cover health care expenses after retirement.
Although Medicare helps pay for many senior health care costs, these contributions dont come close to baldachin all of a retirees medical expenses. Most seniors end up paying an exorbitant amount of money out of their own pockets.
As a matter of detail, a recent Taste Investments study shows that a couple subservient today at the age of 65 would need $225, 000 to pay for expansive health care expenses during their retirement. That figure doesnt even bear long - term care expenses. Not to mention that this amount will progress to rise along with inflationso future retirees will have to pay even more.
Considering these numbers, its doubtful that an HSA can bucks your entire post - retirement health - care tab. However, with some clever planning, you can certainly cover a big portion of your after retirement medical expenses with an HSA.
Here are a few tips for maximizing the potentiality of your HSA:
Start puerile: The younger you are when you start contributing to an HSA, the better off youll be in post - retirement years.
Dont use HSA funds until after retirement: While you may be tempted to withdraw funds from your HSA to cover current medical expenses, try to find else way to pay for these costs. If you concession these funds in your HSA, youll accumulate importance and investment returnswhich means youll have more money to cover health care costs in your older years when you need it most.
Wait until youre 65: Once you turn 65, you can use HSA funds for non - health care expenses as well without paying a honesty. These withdrawals are neatly taxed as income, much alike funds taken from a 401 ( k ).
While these accounts certainly offer many benefits, an HSA may or may not make sense for you. You may want to talk with a financial professional to bias if an HSA could help you loot post - retirement medical expenses.


What ' s Up Doc - Accord the Best Doctor for You and Your Health Insurance
When you sign up for new health insurance coverage, its quite important to select the best primary doctor for you and your health plan. Not only do you want to select a competent, experienced doctor who will indulge you with exceptional medical care, but you also need to make certain that he or skirt will afford health care services as requisite underneath your insurance policy.
Although you may be tempted to plainly choose the doctor with the office coterminous to your work or home, you should not take this judgment lightly. Choosing the best doctor requires a great deal of research. Take the time to speculation into your probable doctors credentials and find out how well they work with your discriminative type of insurance plan. After all, your irrefutable and financial health could depend on it.

Different plans, different doctors
If your health insurance plan is an HMO or PPO, youll wearisome be infant in your choice of doctors. These plans typically fit out a list of network approved doctors from which you can choose your primary physician.
However, you can regularly choose someone outside of your health plans network at an further cost. If you hypocrisy find a usable doctor within your network, it may be worth the extended amount to do this.

Pinpointing the best doc
Here are a few steps you can take to find the most relevant doctor for your unique healthcare wants and needs:
Get recommendations: Ask friends, family members and coworkers if they can recommend a doctor. If people you know and certitude have been happy with a doctors care, the odds are that youll be upbeat too.
Consider bit out of network: Even if a friend recommends a doctor who is outside of your health insurance network, you should add that doctor to the list of approved doctors you are considering. Check into all of these doctorsit may be worth the higher price tag to use an out - of - network doctor if no one within the network suits your needs.
Research credentials: Once you have a list of implied doctors, call each doctors office and pump about their education, training and experience. You may also want to ask about specific qualities that you are seeking in a doctor. For example, if you promote a woman as opposed to a man, a doctor of a certain age or religion or even a doctor who attended a certain type of school, you should ask all of these questions.
Check with medical associations: You may also consider resolution more information about possible doctors from the American Board of Medical Specialties ( ABMS ) or The American Medical Association ( AMA ). These associations offer masterly information about doctors throughout the country. Visit the ABMS website at www. abms. org and the AMS website at www. ama - assn. org / aps. amahg.
Find out if theyre board certified: Although doctors are not required to be board certified, this is important to some patients. Doctors have to complete further years of training in a specialty and pass an exam in order to be board certified. You can call the ABMS at 1 - 800 - 776 - 2378 or visit their website at www. abms. org learn more about board certification.
Learn about complaints: You may also want to contact your state department of insurance to find out if any complaints have been filed against your undeveloped doctor.
Meet face - to - face: Once you have narrowed down your list of doctors, you should set up an introductory appointment with each of them. Although some assistance charge a small emolument for these types of visits, its well worth it. This will concede you to get a fondle for the doctors personality and ask him or her questions first - hand.