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Free Taxact 2011

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Free Taxact 2011

Free taxact 2011 1. Free taxact 2011   Travel Table of Contents Traveling Away From HomeTax Home Tax Home Different From Family Home Temporary Assignment or Job What Travel Expenses Are Deductible?Employee. Free taxact 2011 Business associate. Free taxact 2011 Bona fide business purpose. Free taxact 2011 Meals Travel in the United States Travel Outside the United States Luxury Water Travel Conventions If you temporarily travel away from your tax home, you can use this chapter to determine if you have deductible travel expenses. Free taxact 2011 This chapter discusses: Traveling away from home, Temporary assignment or job, and What travel expenses are deductible. Free taxact 2011 It also discusses the standard meal allowance, rules for travel inside and outside the United States, luxury water travel, and deductible convention expenses. Free taxact 2011 Travel expenses defined. Free taxact 2011   For tax purposes, travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. Free taxact 2011   An ordinary expense is one that is common and accepted in your trade or business. Free taxact 2011 A necessary expense is one that is helpful and appropriate for your business. Free taxact 2011 An expense does not have to be required to be considered necessary. Free taxact 2011   You will find examples of deductible travel expenses in Table 1-1 , later. Free taxact 2011 Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. Free taxact 2011 This rest requirement is not satisfied by merely napping in your car. Free taxact 2011 You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. Free taxact 2011 Example 1. Free taxact 2011 You are a railroad conductor. Free taxact 2011 You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. Free taxact 2011 During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. Free taxact 2011 You are considered to be away from home. Free taxact 2011 Example 2. Free taxact 2011 You are a truck driver. Free taxact 2011 You leave your terminal and return to it later the same day. Free taxact 2011 You get an hour off at your turnaround point to eat. Free taxact 2011 Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. Free taxact 2011 Members of the Armed Forces. Free taxact 2011   If you are a member of the U. Free taxact 2011 S. Free taxact 2011 Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. Free taxact 2011 You cannot deduct your expenses for meals and lodging. Free taxact 2011 You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. Free taxact 2011 If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. Free taxact 2011   A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home (explained next) aboard the ship for travel expense purposes. Free taxact 2011 Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. Free taxact 2011 Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. Free taxact 2011 It includes the entire city or general area in which your business or work is located. Free taxact 2011 If you have more than one regular place of business, your tax home is your main place of business. Free taxact 2011 See Main place of business or work , later. Free taxact 2011 If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. Free taxact 2011 See No main place of business or work , later. Free taxact 2011 If you do not have a regular or main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. Free taxact 2011 As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. Free taxact 2011 Main place of business or work. Free taxact 2011   If you have more than one place of work, consider the following when determining which one is your main place of business or work. Free taxact 2011 The total time you ordinarily spend in each place. Free taxact 2011 The level of your business activity in each place. Free taxact 2011 Whether your income from each place is significant or insignificant. Free taxact 2011 Example. Free taxact 2011 You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. Free taxact 2011 You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Free taxact 2011 Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. Free taxact 2011 No main place of business or work. Free taxact 2011   You may have a tax home even if you do not have a regular or main place of work. Free taxact 2011 Your tax home may be the home where you regularly live. Free taxact 2011 Factors used to determine tax home. Free taxact 2011   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. Free taxact 2011 You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. Free taxact 2011 You have living expenses at your main home that you duplicate because your business requires you to be away from that home. Free taxact 2011 You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. Free taxact 2011   If you satisfy all three factors, your tax home is the home where you regularly live. Free taxact 2011 If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. Free taxact 2011 If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. Free taxact 2011 Example 1. Free taxact 2011 You are single and live in Boston in an apartment you rent. Free taxact 2011 You have worked for your employer in Boston for a number of years. Free taxact 2011 Your employer enrolls you in a 12-month executive training program. Free taxact 2011 You do not expect to return to work in Boston after you complete your training. Free taxact 2011 During your training, you do not do any work in Boston. Free taxact 2011 Instead, you receive classroom and on-the-job training throughout the United States. Free taxact 2011 You keep your apartment in Boston and return to it frequently. Free taxact 2011 You use your apartment to conduct your personal business. Free taxact 2011 You also keep up your community contacts in Boston. Free taxact 2011 When you complete your training, you are transferred to Los Angeles. Free taxact 2011 You do not satisfy factor (1) because you did not work in Boston. Free taxact 2011 You satisfy factor (2) because you had duplicate living expenses. Free taxact 2011 You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. Free taxact 2011 Therefore, you have a tax home in Boston. Free taxact 2011 Example 2. Free taxact 2011 You are an outside salesperson with a sales territory covering several states. Free taxact 2011 Your employer's main office is in Newark, but you do not conduct any business there. Free taxact 2011 Your work assignments are temporary, and you have no way of knowing where your future assignments will be located. Free taxact 2011 You have a room in your married sister's house in Dayton. Free taxact 2011 You stay there for one or two weekends a year, but you do no work in the area. Free taxact 2011 You do not pay your sister for the use of the room. Free taxact 2011 You do not satisfy any of the three factors listed earlier. Free taxact 2011 You are an itinerant and have no tax home. Free taxact 2011 Tax Home Different From Family Home If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. Free taxact 2011 You also cannot deduct the cost of meals and lodging while at your tax home. Free taxact 2011 See Example 1 , later. Free taxact 2011 If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. Free taxact 2011 See Example 2 , later. Free taxact 2011 Example 1. Free taxact 2011 You are a truck driver and you and your family live in Tucson. Free taxact 2011 You are employed by a trucking firm that has its terminal in Phoenix. Free taxact 2011 At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. Free taxact 2011 You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. Free taxact 2011 This is because Phoenix is your tax home. Free taxact 2011 Example 2. Free taxact 2011 Your family home is in Pittsburgh, where you work 12 weeks a year. Free taxact 2011 The rest of the year you work for the same employer in Baltimore. Free taxact 2011 In Baltimore, you eat in restaurants and sleep in a rooming house. Free taxact 2011 Your salary is the same whether you are in Pittsburgh or Baltimore. Free taxact 2011 Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. Free taxact 2011 You cannot deduct any expenses you have for meals and lodging there. Free taxact 2011 However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. Free taxact 2011 You can deduct the cost of your round trip between Baltimore and Pittsburgh. Free taxact 2011 You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. Free taxact 2011 Temporary Assignment or Job You may regularly work at your tax home and also work at another location. Free taxact 2011 It may not be practical to return to your tax home from this other location at the end of each work day. Free taxact 2011 Temporary assignment vs. Free taxact 2011 indefinite assignment. Free taxact 2011   If your assignment or job away from your main place of work is temporary, your tax home does not change. Free taxact 2011 You are considered to be away from home for the whole period you are away from your main place of work. Free taxact 2011 You can deduct your travel expenses if they otherwise qualify for deduction. Free taxact 2011 Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. Free taxact 2011    However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. Free taxact 2011 An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. Free taxact 2011   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. Free taxact 2011 You may be able to deduct the cost of relocating to your new tax home as a moving expense. Free taxact 2011 See Publication 521 for more information. Free taxact 2011 Exception for federal crime investigations or prosecutions. Free taxact 2011   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. Free taxact 2011 This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year provided you meet the other requirements for deductibility. Free taxact 2011   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Free taxact 2011 Determining temporary or indefinite. Free taxact 2011   You must determine whether your assignment is temporary or indefinite when you start work. Free taxact 2011 If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. Free taxact 2011 An assignment or job that is initially temporary may become indefinite due to changed circumstances. Free taxact 2011 A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. Free taxact 2011   The following examples illustrate whether an assignment or job is temporary or indefinite. Free taxact 2011 Example 1. Free taxact 2011 You are a construction worker. Free taxact 2011 You live and regularly work in Los Angeles. Free taxact 2011 You are a member of a trade union in Los Angeles that helps you get work in the Los Angeles area. Free taxact 2011 Your tax home is Los Angeles. Free taxact 2011 Because of a shortage of work, you took a job on a construction project in Fresno. Free taxact 2011 Your job was scheduled to end in 8 months. Free taxact 2011 The job actually lasted 10 months. Free taxact 2011 You realistically expected the job in Fresno to last 8 months. Free taxact 2011 The job actually did last less than 1 year. Free taxact 2011 The job is temporary and your tax home is still in Los Angeles. Free taxact 2011 Example 2. Free taxact 2011 The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 18 months. Free taxact 2011 The job actually was completed in 10 months. Free taxact 2011 Your job in Fresno is indefinite because you realistically expected the work to last longer than 1 year, even though it actually lasted less than 1 year. Free taxact 2011 You cannot deduct any travel expenses you had in Fresno because Fresno became your tax home. Free taxact 2011 Example 3. Free taxact 2011 The facts are the same as in Example 1, except that you realistically expected the work in Fresno to last 9 months. Free taxact 2011 After 8 months, however, you were asked to remain for 7 more months (for a total actual stay of 15 months). Free taxact 2011 Initially, you realistically expected the job in Fresno to last for only 9 months. Free taxact 2011 However, due to changed circumstances occurring after 8 months, it was no longer realistic for you to expect that the job in Fresno would last for 1 year or less. Free taxact 2011 You can only deduct your travel expenses for the first 8 months. Free taxact 2011 You cannot deduct any travel expenses you had after that time because Fresno became your tax home when the job became indefinite. Free taxact 2011 Going home on days off. Free taxact 2011   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. Free taxact 2011 You cannot deduct the cost of your meals and lodging there. Free taxact 2011 However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. Free taxact 2011 You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. Free taxact 2011   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. Free taxact 2011 In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. Free taxact 2011 Probationary work period. Free taxact 2011   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. Free taxact 2011 You cannot deduct any of your expenses for meals and lodging during the probationary period. Free taxact 2011 What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. Free taxact 2011 You can deduct ordinary and necessary expenses you have when you travel away from home on business. Free taxact 2011 The type of expense you can deduct depends on the facts and your circumstances. Free taxact 2011 Table 1-1 summarizes travel expenses you may be able to deduct. Free taxact 2011 You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. Free taxact 2011 When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. Free taxact 2011 You can use a log, diary, notebook, or any other written record to keep track of your expenses. Free taxact 2011 The types of expenses you need to record, along with supporting documentation, are described in Table 5-1 (see chapter 5). Free taxact 2011 Separating costs. Free taxact 2011   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. Free taxact 2011 You must have a reasonable basis for making this allocation. Free taxact 2011 For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. Free taxact 2011 Travel expenses for another individual. Free taxact 2011    If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. Free taxact 2011 Employee. Free taxact 2011   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. Free taxact 2011 Business associate. Free taxact 2011   If a business associate travels with you and meets the conditions in (2) and (3), earlier, you can deduct the travel expenses you have for that person. Free taxact 2011 A business associate is someone with whom you could reasonably expect to actively conduct business. Free taxact 2011 A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. Free taxact 2011 Bona fide business purpose. Free taxact 2011   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Free taxact 2011 Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. Free taxact 2011 Table 1-1. Free taxact 2011 Travel Expenses You Can Deduct   This chart summarizes expenses you can deduct when you travel away from home for business purposes. Free taxact 2011 IF you have expenses for. Free taxact 2011 . Free taxact 2011 . Free taxact 2011 THEN you can deduct the cost of. Free taxact 2011 . Free taxact 2011 . Free taxact 2011 transportation travel by airplane, train, bus, or car between your home and your business destination. Free taxact 2011 If you were provided with a free ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. Free taxact 2011 If you travel by ship, see Luxury Water Travel and Cruise Ships (under Conventions) for additional rules and limits. Free taxact 2011 taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. Free taxact 2011 baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. Free taxact 2011 car operating and maintaining your car when traveling away from home on business. Free taxact 2011 You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking. Free taxact 2011 If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Free taxact 2011 lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Free taxact 2011 Meals include amounts spent for food, beverages, taxes, and related tips. Free taxact 2011 See Meals for additional rules and limits. Free taxact 2011 cleaning dry cleaning and laundry. Free taxact 2011 telephone business calls while on your business trip. Free taxact 2011 This includes business communication by fax machine or other communication devices. Free taxact 2011 tips tips you pay for any expenses in this chart. Free taxact 2011 other other similar ordinary and necessary expenses related to your business travel. Free taxact 2011 These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. Free taxact 2011 Example. Free taxact 2011 Jerry drives to Chicago on business and takes his wife, Linda, with him. Free taxact 2011 Linda is not Jerry's employee. Free taxact 2011 Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. Free taxact 2011 The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. Free taxact 2011 Her expenses are not deductible. Free taxact 2011 Jerry pays $199 a day for a double room. Free taxact 2011 A single room costs $149 a day. Free taxact 2011 He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. Free taxact 2011 If he uses public transportation, he can deduct only his fare. Free taxact 2011 Meals You can deduct the cost of meals in either of the following situations. Free taxact 2011 It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. Free taxact 2011 The meal is business-related entertainment. Free taxact 2011 Business-related entertainment is discussed in chapter 2 . Free taxact 2011 The following discussion deals only with meals that are not business-related entertainment. Free taxact 2011 Lavish or extravagant. Free taxact 2011   You cannot deduct expenses for meals that are lavish or extravagant. Free taxact 2011 An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Free taxact 2011 Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Free taxact 2011 50% limit on meals. Free taxact 2011   You can figure your meals expense using either of the following methods. Free taxact 2011 Actual cost. Free taxact 2011 The standard meal allowance. Free taxact 2011 Both of these methods are explained below. Free taxact 2011 But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. Free taxact 2011   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. Free taxact 2011 If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. Free taxact 2011 Chapter 2 discusses the 50% Limit in more detail, and chapter 6 discusses accountable and nonaccountable plans. Free taxact 2011 Actual Cost You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. Free taxact 2011 If you use this method, you must keep records of your actual cost. Free taxact 2011 Standard Meal Allowance Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. Free taxact 2011 It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. Free taxact 2011 The set amount varies depending on where and when you travel. Free taxact 2011 In this publication, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . Free taxact 2011 If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. Free taxact 2011 See the recordkeeping rules for travel in chapter 5 . Free taxact 2011 Incidental expenses. Free taxact 2011   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Free taxact 2011   Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. Free taxact 2011 Incidental-expenses-only method. Free taxact 2011   You can use an optional method (instead of actual cost) for deducting incidental expenses only. Free taxact 2011 The amount of the deduction is $5 a day. Free taxact 2011 You can use this method only if you did not pay or incur any meal expenses. Free taxact 2011 You cannot use this method on any day that you use the standard meal allowance. Free taxact 2011 This method is subject to the proration rules for partial days. Free taxact 2011 See Travel for days you depart and return , later in this chapter. Free taxact 2011 Note. Free taxact 2011 The incidental-expenses-only method is not subject to the 50% limit discussed below. Free taxact 2011 Federal employees should refer to the Federal Travel Regulations at www. Free taxact 2011 gsa. Free taxact 2011 gov. Free taxact 2011 Find the “Most Requested Links” on the upper left and click on “Regulations: FAR, FMR, FTR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. Free taxact 2011 50% limit may apply. Free taxact 2011   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. Free taxact 2011 If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. Free taxact 2011 The 50% limit is discussed in more detail in chapter 2, and accountable and nonaccountable plans are discussed in chapter 6. Free taxact 2011 There is no optional standard lodging amount similar to the standard meal allowance. Free taxact 2011 Your allowable lodging expense deduction is your actual cost. Free taxact 2011 Who can use the standard meal allowance. Free taxact 2011   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. Free taxact 2011 Use of the standard meal allowance for other travel. Free taxact 2011   You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. Free taxact 2011 You can also use it to figure your meal expenses when you travel for qualifying educational purposes. Free taxact 2011 You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. Free taxact 2011 Amount of standard meal allowance. Free taxact 2011   The standard meal allowance is the federal M&IE rate. Free taxact 2011 For travel in 2013, the rate for most small localities in the United States is $46 a day. Free taxact 2011    Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. Free taxact 2011    You can find this information (organized by state) on the Internet at www. Free taxact 2011 gsa. Free taxact 2011 gov/perdiem. Free taxact 2011 Enter a zip code or select a city and state for the per diem rates for the current fiscal year. Free taxact 2011 Per diem rates for prior fiscal years are available by using the drop down menu under “Search by State. Free taxact 2011 ”   Per diem rates are listed by the Federal government's fiscal year which runs from October 1 to September 30. Free taxact 2011 You can choose to use the rates from the 2013 fiscal year per diem tables or the rates from the 2014 fiscal year tables, but you must consistently use the same tables for all travel you are reporting on your income tax return for the year. Free taxact 2011   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. Free taxact 2011 If you work in the transportation industry, however, see Special rate for transportation workers , later. Free taxact 2011 Standard meal allowance for areas outside the continental United States. Free taxact 2011   The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. Free taxact 2011 The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. Free taxact 2011 S. Free taxact 2011 Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. Free taxact 2011 The Department of State establishes per diem rates for all other foreign areas. Free taxact 2011    You can access per diem rates for non-foreign areas outside the continental United States at: www. Free taxact 2011 defensetravel. Free taxact 2011 dod. Free taxact 2011 mil/site/perdiemCalc. Free taxact 2011 cfm. Free taxact 2011 You can access all other foreign per diem rates at: www. Free taxact 2011 state. Free taxact 2011 gov/travel/. Free taxact 2011 Click on “Travel Per Diem Allowances for Foreign Areas,” under “Foreign Per Diem Rates” to obtain the latest foreign per diem rates. Free taxact 2011 Special rate for transportation workers. Free taxact 2011   You can use a special standard meal allowance if you work in the transportation industry. Free taxact 2011 You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. Free taxact 2011 If this applies to you, you can claim a standard meal allowance of $59 a day ($65 for travel outside the continental United States). Free taxact 2011   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. Free taxact 2011 If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. Free taxact 2011 Travel for days you depart and return. Free taxact 2011   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). Free taxact 2011 You can do so by one of two methods. Free taxact 2011 Method 1: You can claim 3/4 of the standard meal allowance. Free taxact 2011 Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. Free taxact 2011 Example. Free taxact 2011 Jen is employed in New Orleans as a convention planner. Free taxact 2011 In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. Free taxact 2011 She left her home in New Orleans at 10 a. Free taxact 2011 m. Free taxact 2011 on Wednesday and arrived in Washington, DC, at 5:30 p. Free taxact 2011 m. Free taxact 2011 After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. Free taxact 2011 m. Free taxact 2011 Jen's employer gave her a flat amount to cover her expenses and included it with her wages. Free taxact 2011 Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. Free taxact 2011 Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. Free taxact 2011 For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. Free taxact 2011 Travel in the United States The following discussion applies to travel in the United States. Free taxact 2011 For this purpose, the United States includes the 50 states and the District of Columbia. Free taxact 2011 The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. Free taxact 2011 See Part of Trip Outside the United States , later. Free taxact 2011 Trip Primarily for Business You can deduct all of your travel expenses if your trip was entirely business related. Free taxact 2011 If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct only your business-related travel expenses. Free taxact 2011 These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. Free taxact 2011 Example. Free taxact 2011 You work in Atlanta and take a business trip to New Orleans in May. Free taxact 2011 Your business travel totals 850 miles round trip. Free taxact 2011 On your way, you stop in Mobile to visit your parents. Free taxact 2011 You spend $2,120 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. Free taxact 2011 If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,820. Free taxact 2011 You can deduct $1,820 for your trip, including the cost of round-trip transportation to and from New Orleans. Free taxact 2011 The deduction for your meals is subject to the 50% limit on meals mentioned earlier. Free taxact 2011 Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. Free taxact 2011 However, you can deduct any expenses you have while at your destination that are directly related to your business. Free taxact 2011 A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. Free taxact 2011 The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. Free taxact 2011 Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later in this chapter under Travel Outside the United States for that part of the trip. Free taxact 2011 For the part of your trip that is inside the United States, use the rules for travel in the United States. Free taxact 2011 Travel outside the United States does not include travel from one point in the United States to another point in the United States. Free taxact 2011 The following discussion can help you determine whether your trip was entirely within the United States. Free taxact 2011 Public transportation. Free taxact 2011   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. Free taxact 2011 Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . Free taxact 2011 Example. Free taxact 2011 You fly from New York to Puerto Rico with a scheduled stop in Miami. Free taxact 2011 You return to New York nonstop. Free taxact 2011 The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. Free taxact 2011 Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. Free taxact 2011 Private car. Free taxact 2011   Travel by private car in the United States is travel between points in the United States, even though you are on your way to a destination outside the United States. Free taxact 2011 Example. Free taxact 2011 You travel by car from Denver to Mexico City and return. Free taxact 2011 Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. Free taxact 2011 The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. Free taxact 2011 Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. Free taxact 2011 For this purpose, the United States includes the 50 states and the District of Columbia. Free taxact 2011 How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. Free taxact 2011 Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. Free taxact 2011 Travel entirely for business. Free taxact 2011   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. Free taxact 2011 Travel considered entirely for business. Free taxact 2011   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. Free taxact 2011 Exception 1 - No substantial control. Free taxact 2011   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. Free taxact 2011 The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. Free taxact 2011   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, and Are not related to your employer, or Are not a managing executive. Free taxact 2011    “Related to your employer” is defined later in chapter 6 under Per Diem and Car Allowances . Free taxact 2011   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. Free taxact 2011   A self-employed person generally has substantial control over arranging business trips. Free taxact 2011 Exception 2 - Outside United States no more than a week. Free taxact 2011   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. Free taxact 2011 One week means 7 consecutive days. Free taxact 2011 In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. Free taxact 2011 Example. Free taxact 2011 You traveled to Brussels primarily for business. Free taxact 2011 You left Denver on Tuesday and flew to New York. Free taxact 2011 On Wednesday, you flew from New York to Brussels, arriving the next morning. Free taxact 2011 On Thursday and Friday, you had business discussions, and from Saturday until Tuesday, you were sightseeing. Free taxact 2011 You flew back to New York, arriving Wednesday afternoon. Free taxact 2011 On Thursday, you flew back to Denver. Free taxact 2011 Although you were away from your home in Denver for more than a week, you were not outside the United States for more than a week. Free taxact 2011 This is because the day you depart does not count as a day outside the United States. Free taxact 2011 You can deduct your cost of the round-trip flight between Denver and Brussels. Free taxact 2011 You can also deduct the cost of your stay in Brussels for Thursday and Friday while you conducted business. Free taxact 2011 However, you cannot deduct the cost of your stay in Brussels from Saturday through Tuesday because those days were spent on nonbusiness activities. Free taxact 2011 Exception 3 - Less than 25% of time on personal activities. Free taxact 2011   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. Free taxact 2011 For this purpose, count both the day your trip began and the day it ended. Free taxact 2011 Example. Free taxact 2011 You flew from Seattle to Tokyo, where you spent 14 days on business and 5 days on personal matters. Free taxact 2011 You then flew back to Seattle. Free taxact 2011 You spent 1 day flying in each direction. Free taxact 2011 Because only 5/21 (less than 25%) of your total time abroad was for nonbusiness activities, you can deduct as travel expenses what it would have cost you to make the trip if you had not engaged in any nonbusiness activity. Free taxact 2011 The amount you can deduct is the cost of the round-trip plane fare and 16 days of meals (subject to the 50% limit), lodging, and other related expenses. Free taxact 2011 Exception 4 - Vacation not a major consideration. Free taxact 2011   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. Free taxact 2011 Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on other activities, you generally cannot deduct all of your travel expenses. Free taxact 2011 You can only deduct the business portion of your cost of getting to and from your destination. Free taxact 2011 You must allocate the costs between your business and other activities to determine your deductible amount. Free taxact 2011 See Travel allocation rules , later. Free taxact 2011 You do not have to allocate your travel expenses if you meet one of the four exceptions listed earlier under Travel considered entirely for business . Free taxact 2011 In those cases, you can deduct the total cost of getting to and from your destination. Free taxact 2011 Travel allocation rules. Free taxact 2011   If your trip outside the United States was primarily for business, you must allocate your travel time on a day-to-day basis between business days and nonbusiness days. Free taxact 2011 The days you depart from and return to the United States are both counted as days outside the United States. Free taxact 2011   To figure the deductible amount of your round-trip travel expenses, use the following fraction. Free taxact 2011 The numerator (top number) is the total number of business days outside the United States. Free taxact 2011 The denominator (bottom number) is the total number of business and nonbusiness days of travel. Free taxact 2011 Counting business days. Free taxact 2011   Your business days include transportation days, days your presence was required, days you spent on business, and certain weekends and holidays. Free taxact 2011 Transportation day. Free taxact 2011   Count as a business day any day you spend traveling to or from a business destination. Free taxact 2011 However, if because of a nonbusiness activity you do not travel by a direct route, your business days are the days it would take you to travel a reasonably direct route to your business destination. Free taxact 2011 Extra days for side trips or nonbusiness activities cannot be counted as business days. Free taxact 2011 Presence required. Free taxact 2011   Count as a business day any day your presence is required at a particular place for a specific business purpose. Free taxact 2011 Count it as a business day even if you spend most of the day on nonbusiness activities. Free taxact 2011 Day spent on business. Free taxact 2011   If your principal activity during working hours is the pursuit of your trade or business, count the day as a business day. Free taxact 2011 Also, count as a business day any day you are prevented from working because of circumstances beyond your control. Free taxact 2011 Certain weekends and holidays. Free taxact 2011   Count weekends, holidays, and other necessary standby days as business days if they fall between business days. Free taxact 2011 But if they follow your business meetings or activity and you remain at your business destination for nonbusiness or personal reasons, do not count them as business days. Free taxact 2011 Example 1. Free taxact 2011 Your tax home is New York City. Free taxact 2011 You travel to Quebec, where you have a business appointment on Friday. Free taxact 2011 You have another appointment on the following Monday. Free taxact 2011 Because your presence was required on both Friday and Monday, they are business days. Free taxact 2011 Because the weekend is between business days, Saturday and Sunday are counted as business days. Free taxact 2011 This is true even though you use the weekend for sightseeing, visiting friends, or other nonbusiness activity. Free taxact 2011 Example 2. Free taxact 2011 If, in Example 1, you had no business in Quebec after Friday, but stayed until Monday before starting home, Saturday and Sunday would be nonbusiness days. Free taxact 2011 Nonbusiness activity on the way to or from your business destination. Free taxact 2011   If you stopped for a vacation or other nonbusiness activity either on the way from the United States to your business destination, or on the way back to the United States from your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Free taxact 2011   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your nonbusiness destination and a return to the point where travel outside the United States ends. Free taxact 2011   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Free taxact 2011 The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Free taxact 2011 Example. Free taxact 2011 You live in New York. Free taxact 2011 On May 4 you flew to Paris to attend a business conference that began on May 5. Free taxact 2011 The conference ended at noon on May 14. Free taxact 2011 That evening you flew to Dublin where you visited with friends until the afternoon of May 21, when you flew directly home to New York. Free taxact 2011 The primary purpose for the trip was to attend the conference. Free taxact 2011 If you had not stopped in Dublin, you would have arrived home the evening of May 14. Free taxact 2011 You do not meet any of the exceptions that would allow you to consider your travel entirely for business. Free taxact 2011 May 4 through May 14 (11 days) are business days and May 15 through May 21 (7 days) are nonbusiness days. Free taxact 2011 You can deduct the cost of your meals (subject to the 50% limit), lodging, and other business-related travel expenses while in Paris. Free taxact 2011 You cannot deduct your expenses while in Dublin. Free taxact 2011 You also cannot deduct 7/18 of what it would have cost you to travel round-trip between New York and Dublin. Free taxact 2011 You paid $750 to fly from New York to Paris, $400 to fly from Paris to Dublin, and $700 to fly from Dublin back to New York. Free taxact 2011 Round-trip airfare from New York to Dublin would have been $1,250. Free taxact 2011 You figure the deductible part of your air travel expenses by subtracting 7/18 of the round-trip fare and other expenses you would have had in traveling directly between New York and Dublin ($1,250 × 7/18 = $486) from your total expenses in traveling from New York to Paris to Dublin and back to New York ($750 + $400 + $700 = $1,850). Free taxact 2011 Your deductible air travel expense is $1,364 ($1,850 − $486). Free taxact 2011 Nonbusiness activity at, near, or beyond business destination. Free taxact 2011   If you had a vacation or other nonbusiness activity at, near, or beyond your business destination, you must allocate part of your travel expenses to the nonbusiness activity. Free taxact 2011   The part you must allocate is the amount it would have cost you to travel between the point where travel outside the United States begins and your business destination and a return to the point where travel outside the United States ends. Free taxact 2011   You determine the nonbusiness portion of that expense by multiplying it by a fraction. Free taxact 2011 The numerator (top number) of the fraction is the number of nonbusiness days during your travel outside the United States and the denominator (bottom number) is the total number of days you spend outside the United States. Free taxact 2011   None of your travel expenses for nonbusiness activities at, near, or beyond your business destination are deductible. Free taxact 2011 Example. Free taxact 2011 Assume that the dates are the same as in the previous example but that instead of going to Dublin for your vacation, you fly to Venice, Italy, for a vacation. Free taxact 2011 You cannot deduct any part of the cost of your trip from Paris to Venice and return to Paris. Free taxact 2011 In addition, you cannot deduct 7/18 of the airfare and other expenses from New York to Paris and back to New York. Free taxact 2011 You can deduct 11/18 of the round-trip plane fare and other travel expenses from New York to Paris, plus your meals (subject to the 50% limit), lodging, and any other business expenses you had in Paris. Free taxact 2011 (Assume these expenses total $4,939. Free taxact 2011 ) If the round-trip plane fare and other travel-related expenses (such as food during the trip) are $1,750, you can deduct travel costs of $1,069 (11/18 × $1,750), plus the full $4,939 for the expenses you had in Paris. Free taxact 2011 Other methods. Free taxact 2011   You can use another method of counting business days if you establish that it more clearly reflects the time spent on other than business activities outside the United States. Free taxact 2011 Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. Free taxact 2011 However, if you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. Free taxact 2011 Example. Free taxact 2011 The university from which you graduated has a continuing education program for members of its alumni association. Free taxact 2011 This program consists of trips to various foreign countries where academic exercises and conferences are set up to acquaint individuals in most occupations with selected facilities in several regions of the world. Free taxact 2011 However, none of the conferences are directed toward specific occupations or professions. Free taxact 2011 It is up to each participant to seek out specialists and organizational settings appropriate to his or her occupational interests. Free taxact 2011 Three-hour sessions are held each day over a 5-day period at each of the selected overseas facilities where participants can meet with individual practitioners. Free taxact 2011 These sessions are composed of a variety of activities including workshops, mini-lectures, role playing, skill development, and exercises. Free taxact 2011 Professional conference directors schedule and conduct the sessions. Free taxact 2011 Participants can choose those sessions they wish to attend. Free taxact 2011 You can participate in this program since you are a member of the alumni association. Free taxact 2011 You and your family take one of the trips. Free taxact 2011 You spend about 2 hours at each of the planned sessions. Free taxact 2011 The rest of the time you go touring and sightseeing with your family. Free taxact 2011 The trip lasts less than 1 week. Free taxact 2011 Your travel expenses for the trip are not deductible since the trip was primarily a vacation. Free taxact 2011 However, registration fees and any other incidental expenses you have for the five planned sessions you attended that are directly related and beneficial to your business are deductible business expenses. Free taxact 2011 These expenses should be specifically stated in your records to ensure proper allocation of your deductible business expenses. Free taxact 2011 Luxury Water Travel If you travel by ocean liner, cruise ship, or other form of luxury water transportation for business purposes, there is a daily limit on the amount you can deduct. Free taxact 2011 The limit is twice the highest federal per diem rate allowable at the time of your travel. Free taxact 2011 (Generally, the federal per diem is the amount paid to federal government employees for daily living expenses when they travel away from home, but in the United States, for business purposes. Free taxact 2011 ) Daily limit on luxury water travel. Free taxact 2011   The highest federal per diem rate allowed and the daily limit for luxury water travel in 2013 is shown in the following table. Free taxact 2011   2013 Dates Highest Federal Per Diem Daily Limit on Luxury Water Travel   Jan. Free taxact 2011 1 – Mar. Free taxact 2011 31 $367 $734   Apr. Free taxact 2011 1 – June 30 312 624   July 1 – Aug. Free taxact 2011 31 310 620   Sept. Free taxact 2011 1 – Sept. Free taxact 2011 30 366 732   Oct. Free taxact 2011 1 – Dec. Free taxact 2011 31 374 748 Example. Free taxact 2011 Caroline, a travel agent, traveled by ocean liner from New York to London, England, on business in May. Free taxact 2011 Her expense for the 6-day cruise was $5,200. Free taxact 2011 Caroline's deduction for the cruise cannot exceed $3,744 (6 days × $624 daily limit). Free taxact 2011 Meals and entertainment. Free taxact 2011   If your expenses for luxury water travel include separately stated amounts for meals or entertainment, those amounts are subject to the 50% limit on meals and entertainment before you apply the daily limit. Free taxact 2011 For a discussion of the 50% Limit , see chapter 2. Free taxact 2011 Example. Free taxact 2011 In the previous example, Caroline's luxury water travel had a total cost of $5,200. Free taxact 2011 Of that amount, $3,700 was separately stated as meals and entertainment. Free taxact 2011 Caroline, who is self-employed, is not reimbursed for any of her travel expenses. Free taxact 2011 Caroline figures her deductible travel expenses as follows. Free taxact 2011 Meals and entertainment $3,700   50% limit × . Free taxact 2011 50   Allowable meals &     entertainment $1,850   Other travel expenses + 1,800   Allowable cost before the daily limit $3,650 Daily limit for May 2013 $624   Times number of days × 6   Maximum luxury water travel     deduction $3,744 Amount of allowable deduction $3,650 Caroline's deduction for her cruise is limited to $3,650, even though the limit on luxury water travel is slightly higher. Free taxact 2011 Not separately stated. Free taxact 2011   If your meal or entertainment charges are not separately stated or are not clearly identifiable, you do not have to allocate any portion of the total charge to meals or entertainment. Free taxact 2011 Exceptions The daily limit on luxury water travel (discussed earlier) does not apply to expenses you have to attend a convention, seminar, or meeting on board a cruise ship. Free taxact 2011 See Cruise Ships under Conventions. Free taxact 2011 Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. Free taxact 2011 You cannot deduct the travel expenses for your family. Free taxact 2011 If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. Free taxact 2011 Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. Free taxact 2011 You can deduct your travel expenses only if your attendance is connected to your own trade or business. Free taxact 2011 Convention agenda. Free taxact 2011   The convention agenda or program generally shows the purpose of the convention. Free taxact 2011 You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. Free taxact 2011 The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. Free taxact 2011 Conventions Held Outside the North American Area You cannot deduct expenses for attending a convention, seminar, or similar meeting held outside the North American area unless: The meeting is directly related to your trade or business, and It is reasonable to hold the meeting outside the North American area. Free taxact 2011 See Reasonableness test , later. Free taxact 2011 If the meeting meets these requirements, you also must satisfy the rules for deducting expenses for business trips in general, discussed earlier under Travel Outside the United States . Free taxact 2011 North American area. Free taxact 2011   The North American area includes the following locations. Free taxact 2011 American Samoa Johnston Island Antigua and Barbuda Kingman Reef Aruba Marshall Islands Bahamas Mexico Baker Island Micronesia Barbados Midway Islands Bermuda Netherlands Antilles Canada Northern Mariana Costa Rica Islands Dominica Palau Dominican Republic Palmyra Atoll Grenada Panama Guam Puerto Rico Guyana Trinidad and Tobago Honduras USA Howland Island U. Free taxact 2011 S. Free taxact 2011 Virgin Islands Jamaica Wake Island Jarvis Island   The North American area also includes U. Free taxact 2011 S. Free taxact 2011 islands, cays, and reefs that are possessions of the United States and not part of the fifty states or the District of Columbia. Free taxact 2011 Reasonableness test. Free taxact 2011   The following factors are taken into account to determine if it was reasonable to hold the meeting outside the North American area. Free taxact 2011 The purpose of the meeting and the activities taking place at the meeting. Free taxact 2011 The purposes and activities of the sponsoring organizations or groups. Free taxact 2011 The homes of the active members of the sponsoring organizations and the places at which other meetings of the sponsoring organizations or groups have been or will be held. Free taxact 2011 Other relevant factors you may present. Free taxact 2011 Cruise Ships You can deduct up to $2,000 per year of your expenses of attending conventions, seminars, or similar meetings held on cruise ships. Free taxact 2011 All ships that sail are considered cruise ships. Free taxact 2011 You can deduct these expenses only if all of the following requirements are met. Free taxact 2011 The convention, seminar, or meeting is directly related to your trade or business. Free taxact 2011 The cruise ship is a vessel registered in the United States. Free taxact 2011 All of the cruise ship's ports of call are in the United States or in possessions of the United States. Free taxact 2011 You attach to your return a written statement signed by you that includes information about: The total days of the trip (not including the days of transportation to and from the cruise ship port), The number of hours each day that you devoted to scheduled business activities, and A program of the scheduled business activities of the meeting. Free taxact 2011 You attach to your return a written statement signed by an officer of the organization or group sponsoring the meeting that includes: A schedule of the business activities of each day of the meeting, and The number of hours you attended the scheduled business activities. Free taxact 2011 Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Hurricane Isaac in Louisiana

LA/MS-2012-15, Sept. 5, 2012

Updated 10/22/12 to include Pointe Coupee and West Baton Rouge parishes

Updated 10/3/12 to include Allen, Morehouse and St. Martin parishes

Updated 9/17/12 to include East Baton Rouge, East Feliciana and West Feliciana parishes.

Updated 9/10/12 to include Assumption, Iberville, St. Helena, St. James, St. Mary, Tangipahoa, Terrebonne, and Washington parishes.

NEW ORLEANS — Victims of Hurricane Isaac that began on Aug. 26, 2012 in parts of Louisiana may qualify for tax relief from the Internal Revenue Service.

Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in Louisiana will receive tax relief, and other locations may be added in coming days based on additional damage assessments by FEMA.

The President has declared the parishes of Allen, Ascension, Assumption, East Baton Rouge, East Feliciana, Iberville, Jefferson, Lafourche, Livingston, Morehouse, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Mary,  St. Tammany,  Tangipahoa, Terrebonne, Washington,  West Baton Rouge and West Feliciana a federal disaster area. Individuals who reside or have a business in these parishes may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 26, and on or before Jan. 11, 2013, have been postponed to Jan. 11, 2013. This includes the quarterly estimated tax payment due on Sept. 17, 2012.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 26, and on or before Sept. 10, as long as the deposits are made by Sept. 10, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The parishes listed above constitutes a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and is entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Jan. 11, 2013, to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 26 and on or before Jan. 11, 2013.

The IRS also gives affected taxpayers until Jan. 11, 2013, to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 26 and on or before Jan. 11, 2013.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 26 and on or before Sept. 10 provided the taxpayer makes these deposits by Sept. 10.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year's return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year's return should put the Disaster Designation “LOUISIANA/HURRICANE ISAAC” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, IRS.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Page Last Reviewed or Updated: 18-Sep-2013

The Free Taxact 2011

Free taxact 2011 6. Free taxact 2011   Catch-Up Contributions Table of Contents The most that can be contributed to your 403(b) account is the lesser of your limit on annual additions or your limit on elective deferrals. Free taxact 2011 If you will be age 50 or older by the end of the year, you may also be able to make additional catch-up contributions. Free taxact 2011 These additional contributions cannot be made with after-tax employee contributions. Free taxact 2011 You are eligible to make catch-up contributions if: You will have reached age 50 by the end of the year, and The maximum amount of elective deferrals that can be made to your 403(b) account have been made for the plan year. Free taxact 2011 The maximum amount of catch-up contributions is the lesser of: $5,500 for 2013 and unchanged for 2014, or The excess of your compensation for the year, over the elective deferrals that are not catch-up contributions. Free taxact 2011 Figuring catch-up contributions. Free taxact 2011   When figuring allowable catch-up contributions, combine all catch-up contributions made by your employer on your behalf to the following plans. Free taxact 2011 Qualified retirement plans. Free taxact 2011 (To determine if your plan is a qualified plan, ask your plan administrator. Free taxact 2011 ) 403(b) plans. Free taxact 2011 Simplified employee pension (SEP) plans. Free taxact 2011 SIMPLE plans. Free taxact 2011   The total amount of the catch-up contributions on your behalf to all plans maintained by your employer cannot be more than the annual limit. Free taxact 2011 For 2013 the limit is $5,500, unchanged for 2014. Free taxact 2011    If you are eligible for both the 15-year rule increase in elective deferrals and the age 50 catch-up, allocate amounts first under the 15-year rule and next as an age 50 catch-up. Free taxact 2011    Catch-up contributions do not affect your MAC. Free taxact 2011 Therefore, the maximum amount that you are allowed to have contributed to your 403(b) account is your MAC plus your allowable catch-up contribution. Free taxact 2011 You can use Worksheet C in chapter 9 to figure your limit on catch-up contributions. Free taxact 2011 Prev  Up  Next   Home   More Online Publications