Don't Let the IRS Destroy Your Small Business: Seventy-Six Mistakes to Avoid

By Michael Savage | Go to book overview
Save to active project

Chapter Five
Travel and Entertainment
Expenses

A few years ago many business owners woke up to discover that the IRS was assessing payroll taxes on the money they had given to their employees (including themselves) for their travel and entertainment expenses. It was quite a surprise. For decades, businesses had given their top employees liberal expense accounts and had required little or no proof that the money was actually spent, let alone spent for a remotely business-related purpose. For many businesses, the expense account was simply a means of rewarding good employees off the payroll.

From a tax standpoint, expense account money was deductible by the business however it was spent. It was a travel or entertainment expense if the employee actually spent the money on the business, or additional compensation to the employee if he didn't spend the money on the business. If there were tax consequences, they were essentially the employee's problems: If he were audited by the IRS, he would have to prove the business purpose of the expenses that he had deducted; otherwise, he would be taxed on the expense account money that he had

-44-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited page

Bookmark this page
Don't Let the IRS Destroy Your Small Business: Seventy-Six Mistakes to Avoid
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen
/ 174

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?