SUBSTANTIATING YOUR EXPENSES
Business travel, meals and entertainment expenses are not deductible unless you properly substantiate your expenses and have an expectation of deriving some specific benefit from the activity. In addition, business must actually be discussed or engaged in before, during or after the activity. You should substantiate each of the following four elements of your expense:
- Time and Place
- Business Purpose
- Dollar Amount
- Business Relationship
In addition to recording this information, you will need receipts, tickets or other supporting documentation for expenditures of $75.00 or more (other than lodging).
CHILD CARE CREDIT
A child care credit of 20% to 35% of your child care expenses is available for working parents who pay child care for their children under the age of 13. The amount of eligible expenses is $3000 for one child, and $6000 for two or more children. To be able to claim this credit, you must know the total amount paid to each child care provider, the provider’s legal name and Social Security number or Employer Identification number, the provider’s address and phone number.
PENALTY FOR EARLY DISTRIBUTION OF AN IRA/PENSION
Are you considering cashing in your IRA or pension? Unless you are over age 59-1/2, or meet the qualifications for penalty exceptions, you will be subject to a 10% penalty on distributions from an IRA or pension. This is in addition to your regular tax liability. You may want to consider “rolling” the IRA or pension into another plan. Ask the holder of your IRA or your company’s benefits person for details.
Don’t navigate the murky waters of tax deductions alone! Call Tax & Accounting Plus at 309-827-4010 for an appointment. Our professional, knowledgeable staff is here to help you file quickly and correctly to get you the biggest refund possible. Call today!
This information is not intended to be a substitute for legal, accounting, investment or other professional services. Always contact a professional to resolve your specific questions.
