Business deductions for travel expenses

Question

Hi. I own a business, and I'm traveling to another state for a business seminar. I haven't made any sales from my business yet, so I'm using the paycheck from my job for the travel expenses (gas, lodging, etc). When I file my tax return, can I get a refund from the government in the amount of the travel expenses?

Answer 1

At the end of the year you will report your sales and your expenses on a Schedule C (here's the link so you can see the types of expenses you can take http://www.irs.gov/pub/irs-pdf/f1040sc.p... ).  Whatever the bottom line is on the Schedule C flows to the first page of your tax return & gets added/subtracted in/from your income.  You can have a loss on a business, but not indefinitely (there are "hobby" rules that limit the number of years you can have a business loss).

As soon as you start making a profit, make sure you don't need to make estimated payments (or increase the withholding from your regular job).  On profit from self employment you usually end up paying more in taxes because you have to pay all of the social security & medicare (if you work for somebody else they pay 1/2).  

Don't forget if you have a profit you probably will have state tax due on it, and possibly local business/merchantile taxes.

Best of luck!

Answer 2

It would be a deduction that could result in a bigger refund. Depends on many variables. You would just have to itemize in order to take the deductions.

Answer 3

Business travel expenses may be deductible.  But no deduction results in a dollar for dollar refund of your expenses.  At best you will reduce your taxable income and the tax owed.  This may result in a smaller amount of tax due, or a refund if you overpaid your tax.  You will not receive money back only because of the travel expense deduction.

You will deduct your travel expenses on Schedule C which records your business income and expenses.

Answer 4

Travel expenses are deducted against income. If you have no business income you have nothing to deduct from.

Answer 5

Depends on circumstances.  Consult a tax professional now since you will need them to handle this business.  You can also read up on it at irs.gov.

Answer 6

No.  Travel expenses may be used to reduce your business income.