Did you know that your travel expenses can save you as much as 50% in taxes or save you ZERO taxes? You may be surprised to hear this but there is actually a RIGHT way and a WRONG way to take your tax deductions.
One of the most common mistakes many make is tax deductions being taken in the wrong place. Take the example Bill who is a pilot. Bill also has a business where he sells nutritional products. For all of Bills’s travel costs, his tax preparer took those deductions on his Schedule A as reimbursed employee business expenses. Based on his income level and the limitations on Schedule A, he was unable to benefit from any of his $20,000 of travel costs.
Had he correctly reported these travel costs to be part of his business expenses (ie: on his business tax return or Schedule C), he would have been able to increase his tax refund by close to $10,000.
The lesson to be learned is to make sure you are taking your tax deductions on the right forms and schedules!