Estimated Tax Tip Savings: Because transportation, lodging, and meal expenses are tax deductible, you can reduce your tax burden and enjoy a nice stay at an out-of-town resort if you handle some of your mom-and-pop S corporation business at the lodge. For example, if your two-day board meeting at the spa costs $2,200, you can not only deduct that amount from your company’s taxable income, you can also do the same for each of your four quarterly board meetings—for a total savings of $8,800.
As long as they have a direct business purpose, your travel expenses are deductible. For a husband-and-wife S corporation, this offers a chance to mix business with pleasure; by simply scheduling high-level meetings and planning during an out-of-town trip, even if you spend some of the time having fun, most of the costs of your stay can be deducted.
You may have heard that the IRS considers board meetings between a husband and wife as personal expenses and not deductible. This rumor is true, and the IRS has put up serious obstacles to prevent frivolous deductions. But luckily some brave souls have found ways around this general rule, and the lessons they learned can be broken down into four easy steps. ... Log in to view full article.