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Free State Filing Income Tax

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Free State Filing Income Tax

Free state filing income tax 26. Free state filing income tax   Car Expenses and Other Employee Business Expenses Table of Contents What's New Introduction Useful Items - You may want to see: Travel ExpensesTraveling Away From Home Tax Home Temporary Assignment or Job What Travel Expenses Are Deductible? Travel in the United States Travel Outside the United States Conventions Entertainment Expenses50% Limit What Entertainment Expenses Are Deductible? What Entertainment Expenses Are Not Deductible? Gift Expenses Transportation ExpensesArmed Forces reservists. Free state filing income tax Parking fees. Free state filing income tax Advertising display on car. Free state filing income tax Car pools. Free state filing income tax Hauling tools or instruments. Free state filing income tax Union members' trips from a union hall. Free state filing income tax Car Expenses RecordkeepingHow To Prove Expenses How Long To Keep Records and Receipts How To ReportGifts. Free state filing income tax Statutory employees. Free state filing income tax Reimbursements Completing Forms 2106 and 2106-EZ Special Rules What's New Standard mileage rate. Free state filing income tax  For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. Free state filing income tax Car expenses and use of the standard mileage rate are explained under Transportation Expenses , later. Free state filing income tax Depreciation limits on cars, trucks, and vans. Free state filing income tax  For 2013, the first-year limit on the total section 179 deduction, special depreciation allowance, and depreciation deduction for cars remains at $11,160 ($3,160 if you elect not to claim the special depreciation allowance). Free state filing income tax For trucks and vans the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). Free state filing income tax For more information, see Depreciation limits in Publication 463. Free state filing income tax Introduction You may be able to deduct the ordinary and necessary business-related expenses you have for: Travel, Entertainment, Gifts, or Transportation. Free state filing income tax An ordinary expense is one that is common and accepted in your trade or business. Free state filing income tax A necessary expense is one that is helpful and appropriate for your business. Free state filing income tax An expense does not have to be required to be considered necessary. Free state filing income tax This chapter explains the following. Free state filing income tax What expenses are deductible. Free state filing income tax How to report your expenses on your return. Free state filing income tax What records you need to prove your expenses. Free state filing income tax How to treat any expense reimbursements you may receive. Free state filing income tax Who does not need to use this chapter. Free state filing income tax   If you are an employee, you will not need to read this chapter if all of the following are true. Free state filing income tax You fully accounted to your employer for your work-related expenses. Free state filing income tax You received full reimbursement for your expenses. Free state filing income tax Your employer required you to return any excess reimbursement and you did so. Free state filing income tax There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement. Free state filing income tax If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. Free state filing income tax See Reimbursements , later, if you would like more information on reimbursements and accounting to your employer. Free state filing income tax    If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2. Free state filing income tax Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business Schedule C-EZ (Form 1040) Net Profit From Business Schedule F (Form 1040) Profit or Loss From Farming Form 2106 Employee Business Expenses Form 2106-EZ Unreimbursed Employee Business Expenses Travel Expenses If you temporarily travel away from your tax home, you can use this section to determine if you have deductible travel expenses. Free state filing income tax This section discusses: Traveling away from home, Tax home, Temporary assignment or job, and What travel expenses are deductible. Free state filing income tax It also discusses the standard meal allowance, rules for travel inside and outside the United States, and deductible convention expenses. Free state filing income tax Travel expenses defined. Free state filing income tax   For tax purposes, travel expenses are the ordinary and necessary expenses (defined earlier) of traveling away from home for your business, profession, or job. Free state filing income tax   You will find examples of deductible travel expenses in Table 26-1 . Free state filing income tax Traveling Away From Home You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day's work, and You need to sleep or rest to meet the demands of your work while away from home. Free state filing income tax This rest requirement is not satisfied by merely napping in your car. Free state filing income tax You do not have to be away from your tax home for a whole day or from dusk to dawn as long as your relief from duty is long enough to get necessary sleep or rest. Free state filing income tax Example 1. Free state filing income tax You are a railroad conductor. Free state filing income tax You leave your home terminal on a regularly scheduled round-trip run between two cities and return home 16 hours later. Free state filing income tax During the run, you have 6 hours off at your turnaround point where you eat two meals and rent a hotel room to get necessary sleep before starting the return trip. Free state filing income tax You are considered to be away from home. Free state filing income tax Example 2. Free state filing income tax You are a truck driver. Free state filing income tax You leave your terminal and return to it later the same day. Free state filing income tax You get an hour off at your turnaround point to eat. Free state filing income tax Because you are not off to get necessary sleep and the brief time off is not an adequate rest period, you are not traveling away from home. Free state filing income tax Members of the Armed Forces. Free state filing income tax   If you are a member of the U. Free state filing income tax S. Free state filing income tax Armed Forces on a permanent duty assignment overseas, you are not traveling away from home. Free state filing income tax You cannot deduct your expenses for meals and lodging. Free state filing income tax You cannot deduct these expenses even if you have to maintain a home in the United States for your family members who are not allowed to accompany you overseas. Free state filing income tax If you are transferred from one permanent duty station to another, you may have deductible moving expenses, which are explained in Publication 521, Moving Expenses. Free state filing income tax    A naval officer assigned to permanent duty aboard a ship that has regular eating and living facilities has a tax home aboard ship for travel expense purposes. Free state filing income tax Tax Home To determine whether you are traveling away from home, you must first determine the location of your tax home. Free state filing income tax Generally, your tax home is your regular place of business or post of duty, regardless of where you maintain your family home. Free state filing income tax It includes the entire city or general area in which your business or work is located. Free state filing income tax If you have more than one regular place of business, your tax home is your main place of business. Free state filing income tax See Main place of business or work , later. Free state filing income tax If you do not have a regular or a main place of business because of the nature of your work, then your tax home may be the place where you regularly live. Free state filing income tax See No main place of business or work , later. Free state filing income tax If you do not have a regular or a main place of business or post of duty and there is no place where you regularly live, you are considered an itinerant (a transient) and your tax home is wherever you work. Free state filing income tax As an itinerant, you cannot claim a travel expense deduction because you are never considered to be traveling away from home. Free state filing income tax Main place of business or work. Free state filing income tax   If you have more than one place of business or work, consider the following when determining which one is your main place of business or work. Free state filing income tax The total time you ordinarily spend in each place. Free state filing income tax The level of your business activity in each place. Free state filing income tax Whether your income from each place is significant or insignificant. Free state filing income tax Example. Free state filing income tax You live in Cincinnati where you have a seasonal job for 8 months each year and earn $40,000. Free state filing income tax You work the other 4 months in Miami, also at a seasonal job, and earn $15,000. Free state filing income tax Cincinnati is your main place of work because you spend most of your time there and earn most of your income there. Free state filing income tax No main place of business or work. Free state filing income tax   You may have a tax home even if you do not have a regular or main place of business or work. Free state filing income tax Your tax home may be the home where you regularly live. Free state filing income tax Factors used to determine tax home. Free state filing income tax   If you do not have a regular or main place of business or work, use the following three factors to determine where your tax home is. Free state filing income tax You perform part of your business in the area of your main home and use that home for lodging while doing business in the area. Free state filing income tax You have living expenses at your main home that you duplicate because your business requires you to be away from that home. Free state filing income tax You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging. Free state filing income tax   If you satisfy all three factors, your tax home is the home where you regularly live. Free state filing income tax If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances. Free state filing income tax If you satisfy only one factor, you are an itinerant; your tax home is wherever you work and you cannot deduct travel expenses. Free state filing income tax Example. Free state filing income tax You are single and live in Boston in an apartment you rent. Free state filing income tax You have worked for your employer in Boston for a number of years. Free state filing income tax Your employer enrolls you in a 12-month executive training program. Free state filing income tax You do not expect to return to work in Boston after you complete your training. Free state filing income tax During your training, you do not do any work in Boston. Free state filing income tax Instead, you receive classroom and on-the-job training throughout the United States. Free state filing income tax You keep your apartment in Boston and return to it frequently. Free state filing income tax You use your apartment to conduct your personal business. Free state filing income tax You also keep up your community contacts in Boston. Free state filing income tax When you complete your training, you are transferred to Los Angeles. Free state filing income tax You do not satisfy factor (1) because you did not work in Boston. Free state filing income tax You satisfy factor (2) because you had duplicate living expenses. Free state filing income tax You also satisfy factor (3) because you did not abandon your apartment in Boston as your main home, you kept your community contacts, and you frequently returned to live in your apartment. Free state filing income tax Therefore, you have a tax home in Boston. Free state filing income tax Tax home different from family home. Free state filing income tax   If you (and your family) do not live at your tax home (defined earlier), you cannot deduct the cost of traveling between your tax home and your family home. Free state filing income tax You also cannot deduct the cost of meals and lodging while at your tax home. Free state filing income tax See Example 1 . Free state filing income tax   If you are working temporarily in the same city where you and your family live, you may be considered as traveling away from home. Free state filing income tax See Example 2 . Free state filing income tax Example 1. Free state filing income tax You are a truck driver and you and your family live in Tucson. Free state filing income tax You are employed by a trucking firm that has its terminal in Phoenix. Free state filing income tax At the end of your long runs, you return to your home terminal in Phoenix and spend one night there before returning home. Free state filing income tax You cannot deduct any expenses you have for meals and lodging in Phoenix or the cost of traveling from Phoenix to Tucson. Free state filing income tax This is because Phoenix is your tax home. Free state filing income tax Example 2. Free state filing income tax Your family home is in Pittsburgh, where you work 12 weeks a year. Free state filing income tax The rest of the year you work for the same employer in Baltimore. Free state filing income tax In Baltimore, you eat in restaurants and sleep in a rooming house. Free state filing income tax Your salary is the same whether you are in Pittsburgh or Baltimore. Free state filing income tax Because you spend most of your working time and earn most of your salary in Baltimore, that city is your tax home. Free state filing income tax You cannot deduct any expenses you have for meals and lodging there. Free state filing income tax However, when you return to work in Pittsburgh, you are away from your tax home even though you stay at your family home. Free state filing income tax You can deduct the cost of your round trip between Baltimore and Pittsburgh. Free state filing income tax You can also deduct your part of your family's living expenses for meals and lodging while you are living and working in Pittsburgh. Free state filing income tax Temporary Assignment or Job You may regularly work at your tax home and also work at another location. Free state filing income tax It may not be practical to return to your tax home from this other location at the end of each work day. Free state filing income tax Temporary assignment vs. Free state filing income tax indefinite assignment. Free state filing income tax   If your assignment or job away from your main place of work is temporary, your tax home does not change. Free state filing income tax You are considered to be away from home for the whole period you are away from your main place of work. Free state filing income tax You can deduct your travel expenses if they otherwise qualify for deduction. Free state filing income tax Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less. Free state filing income tax   However, if your assignment or job is indefinite, the location of the assignment or job becomes your new tax home and you cannot deduct your travel expenses while there. Free state filing income tax An assignment or job in a single location is considered indefinite if it is realistically expected to last for more than 1 year, whether or not it actually lasts for more than 1 year. Free state filing income tax   If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called travel allowances and you account to your employer for them. Free state filing income tax You may be able to deduct the cost of relocating to your new tax home as a moving expense. Free state filing income tax See Publication 521 for more information. Free state filing income tax Exception for federal crime investigations or prosecutions. Free state filing income tax   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule. Free state filing income tax This means you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year, provided you meet the other requirements for deductibility. Free state filing income tax   For you to qualify, the Attorney General (or his or her designee) must certify that you are traveling: For the federal government, In a temporary duty status, and To investigate or prosecute, or provide support services for the investigation or prosecution of a federal crime. Free state filing income tax Determining temporary or indefinite. Free state filing income tax   You must determine whether your assignment is temporary or indefinite when you start work. Free state filing income tax If you expect an assignment or job to last for 1 year or less, it is temporary unless there are facts and circumstances that indicate otherwise. Free state filing income tax An assignment or job that is initially temporary may become indefinite due to changed circumstances. Free state filing income tax A series of assignments to the same location, all for short periods but that together cover a long period, may be considered an indefinite assignment. Free state filing income tax Going home on days off. Free state filing income tax   If you go back to your tax home from a temporary assignment on your days off, you are not considered away from home while you are in your hometown. Free state filing income tax You cannot deduct the cost of your meals and lodging there. Free state filing income tax However, you can deduct your travel expenses, including meals and lodging, while traveling between your temporary place of work and your tax home. Free state filing income tax You can claim these expenses up to the amount it would have cost you to stay at your temporary place of work. Free state filing income tax   If you keep your hotel room during your visit home, you can deduct the cost of your hotel room. Free state filing income tax In addition, you can deduct your expenses of returning home up to the amount you would have spent for meals had you stayed at your temporary place of work. Free state filing income tax Probationary work period. Free state filing income tax   If you take a job that requires you to move, with the understanding that you will keep the job if your work is satisfactory during a probationary period, the job is indefinite. Free state filing income tax You cannot deduct any of your expenses for meals and lodging during the probationary period. Free state filing income tax What Travel Expenses Are Deductible? Once you have determined that you are traveling away from your tax home, you can determine what travel expenses are deductible. Free state filing income tax You can deduct ordinary and necessary expenses you have when you travel away from home on business. Free state filing income tax The type of expense you can deduct depends on the facts and your circumstances. Free state filing income tax Table 26-1 summarizes travel expenses you may be able to deduct. Free state filing income tax You may have other deductible travel expenses that are not covered there, depending on the facts and your circumstances. Free state filing income tax When you travel away from home on business, you should keep records of all the expenses you have and any advances you receive from your employer. Free state filing income tax You can use a log, diary, notebook, or any other written record to keep track of your expenses. Free state filing income tax The types of expenses you need to record, along with supporting documentation, are described in Table 26-2 , later. Free state filing income tax Separating costs. Free state filing income tax   If you have one expense that includes the costs of meals, entertainment, and other services (such as lodging or transportation), you must allocate that expense between the cost of meals and entertainment and the cost of other services. Free state filing income tax You must have a reasonable basis for making this allocation. Free state filing income tax For example, you must allocate your expenses if a hotel includes one or more meals in its room charge. Free state filing income tax Travel expenses for another individual. Free state filing income tax   If a spouse, dependent, or other individual goes with you (or your employee) on a business trip or to a business convention, you generally cannot deduct his or her travel expenses. Free state filing income tax Employee. Free state filing income tax   You can deduct the travel expenses of someone who goes with you if that person: Is your employee, Has a bona fide business purpose for the travel, and Would otherwise be allowed to deduct the travel expenses. Free state filing income tax Business associate. Free state filing income tax   If a business associate travels with you and meets the conditions in (2) and (3) above, you can deduct the travel expenses you have for that person. Free state filing income tax A business associate is someone with whom you could reasonably expect to engage or deal in the active conduct of your business. Free state filing income tax A business associate can be a current or prospective (likely to become) customer, client, supplier, employee, agent, partner, or professional advisor. Free state filing income tax Bona fide business purpose. Free state filing income tax   A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Free state filing income tax Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible. Free state filing income tax Example. Free state filing income tax Jerry drives to Chicago on business and takes his wife, Linda, with him. Free state filing income tax Linda is not Jerry's employee. Free state filing income tax Linda occasionally types notes, performs similar services, and accompanies Jerry to luncheons and dinners. Free state filing income tax The performance of these services does not establish that her presence on the trip is necessary to the conduct of Jerry's business. Free state filing income tax Her expenses are not deductible. Free state filing income tax Jerry pays $199 a day for a double room. Free state filing income tax A single room costs $149 a day. Free state filing income tax He can deduct the total cost of driving his car to and from Chicago, but only $149 a day for his hotel room. Free state filing income tax If he uses public transportation, he can deduct only his fare. Free state filing income tax Table 26-1. Free state filing income tax Travel Expenses You Can Deduct This chart summarizes expenses you can deduct when you travel away from home for business purposes. Free state filing income tax IF you have expenses for. Free state filing income tax . Free state filing income tax . Free state filing income tax THEN you can deduct the cost of. Free state filing income tax . Free state filing income tax . Free state filing income tax transportation travel by airplane, train, bus, or car between your home and your business destination. Free state filing income tax If you were provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero. Free state filing income tax If you travel by ship, see Luxury Water Travel and Cruise ships (under Conventions) in Publication 463 for additional rules and limits. Free state filing income tax taxi, commuter bus, and airport limousine fares for these and other types of transportation that take you between: The airport or station and your hotel, and The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location. Free state filing income tax baggage and shipping sending baggage and sample or display material between your regular and temporary work locations. Free state filing income tax car operating and maintaining your car when traveling away from home on business. Free state filing income tax You can deduct actual expenses or the standard mileage rate as well as business-related tolls and parking. Free state filing income tax If you rent a car while away from home on business, you can deduct only the business-use portion of the expenses. Free state filing income tax lodging and meals your lodging and meals if your business trip is overnight or long enough that you need to stop for sleep or rest to properly perform your duties. Free state filing income tax Meals include amounts spent for food, beverages, taxes, and related tips. Free state filing income tax See Meals and Incidental Expenses for additional rules and limits. Free state filing income tax cleaning dry cleaning and laundry. Free state filing income tax telephone business calls while on your business trip. Free state filing income tax This includes business communication by fax machine or other communication devices. Free state filing income tax tips tips you pay for any expenses in this chart. Free state filing income tax other other similar ordinary and necessary expenses related to your business travel. Free state filing income tax These expenses might include transportation to or from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer. Free state filing income tax Meals and Incidental Expenses You can deduct the cost of meals in either of the following situations. Free state filing income tax It is necessary for you to stop for substantial sleep or rest to properly perform your duties while traveling away from home on business. Free state filing income tax The meal is business-related entertainment. Free state filing income tax Business-related entertainment is discussed under Entertainment Expenses , later. Free state filing income tax The following discussion deals only with meals (and incidental expenses) that are not business-related entertainment. Free state filing income tax Lavish or extravagant. Free state filing income tax   You cannot deduct expenses for meals that are lavish or extravagant. Free state filing income tax An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances. Free state filing income tax Expenses will not be disallowed merely because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Free state filing income tax 50% limit on meals. Free state filing income tax   You can figure your meal expenses using either of the following methods. Free state filing income tax Actual cost. Free state filing income tax The standard meal allowance. Free state filing income tax Both of these methods are explained below. Free state filing income tax But, regardless of the method you use, you generally can deduct only 50% of the unreimbursed cost of your meals. Free state filing income tax   If you are reimbursed for the cost of your meals, how you apply the 50% limit depends on whether your employer's reimbursement plan was accountable or nonaccountable. Free state filing income tax If you are not reimbursed, the 50% limit applies whether the unreimbursed meal expense is for business travel or business entertainment. Free state filing income tax The 50% limit is explained later under Entertainment Expenses . Free state filing income tax Accountable and nonaccountable plans are discussed later under Reimbursements . Free state filing income tax Actual cost. Free state filing income tax   You can use the actual cost of your meals to figure the amount of your expense before reimbursement and application of the 50% deduction limit. Free state filing income tax If you use this method, you must keep records of your actual cost. Free state filing income tax Standard meal allowance. Free state filing income tax   Generally, you can use the “standard meal allowance” method as an alternative to the actual cost method. Free state filing income tax It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs. Free state filing income tax The set amount varies depending on where and when you travel. Free state filing income tax In this chapter, “standard meal allowance” refers to the federal rate for M&IE, discussed later under Amount of standard meal allowance . Free state filing income tax If you use the standard meal allowance, you still must keep records to prove the time, place, and business purpose of your travel. Free state filing income tax See Recordkeeping , later. Free state filing income tax Incidental expenses. Free state filing income tax   The term “incidental expenses” means fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Free state filing income tax Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings. Free state filing income tax Incidental expenses only method. Free state filing income tax   You can use an optional method (instead of actual cost) for deducting incidental expenses only. Free state filing income tax The amount of the deduction is $5 a day. Free state filing income tax You can use this method only if you did not pay or incur any meal expenses. Free state filing income tax You cannot use this method on any day that you use the standard meal allowance. Free state filing income tax    Federal employees should refer to the Federal Travel Regulations at  www. Free state filing income tax gsa. Free state filing income tax gov. Free state filing income tax Find “What GSA Offers” and click on “Regulations: FMR, FTR, & FAR” for Federal Travel Regulation (FTR) for changes affecting claims for reimbursement. Free state filing income tax 50% limit may apply. Free state filing income tax   If you use the standard meal allowance method for meal expenses and you are not reimbursed or you are reimbursed under a nonaccountable plan, you can generally deduct only 50% of the standard meal allowance. Free state filing income tax If you are reimbursed under an accountable plan and you are deducting amounts that are more than your reimbursements, you can deduct only 50% of the excess amount. Free state filing income tax The 50% limit is explained later under Entertainment Expenses . Free state filing income tax Accountable and nonaccountable plans are discussed later under Reimbursements . Free state filing income tax There is no optional standard lodging amount similar to the standard meal allowance. Free state filing income tax Your allowable lodging expense deduction is your actual cost. Free state filing income tax Who can use the standard meal allowance. Free state filing income tax   You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses. Free state filing income tax   Use of the standard meal allowance for other travel. Free state filing income tax    You can use the standard meal allowance to figure your meal expenses when you travel in connection with investment and other income-producing property. Free state filing income tax You can also use it to figure your meal expenses when you travel for qualifying educational purposes. Free state filing income tax You cannot use the standard meal allowance to figure the cost of your meals when you travel for medical or charitable purposes. Free state filing income tax Amount of standard meal allowance. Free state filing income tax   The standard meal allowance is the federal M&IE rate. Free state filing income tax For travel in 2013, the daily rate for most small localities in the United States is $46. Free state filing income tax   Most major cities and many other localities in the United States are designated as high-cost areas, qualifying for higher standard meal allowances. Free state filing income tax You can find this information (organized by state) on the Internet at www. Free state filing income tax gsa. Free state filing income tax gov. Free state filing income tax Click on “Per Diem Rates,” then select “2013” for the period January 1, 2013 – September 30, 2013, and select “2014” for the period October 1, 2013 – December 31, 2013. Free state filing income tax However, you can apply the rates in effect before October 1, 2013, for expenses of all travel within the United States for 2013 instead of the updated rates. Free state filing income tax You must consistently use either the rates for the first 9 months for all of 2013 or the updated rates for the period of October 1, 2013, through December 31, 2013. Free state filing income tax   If you travel to more than one location in one day, use the rate in effect for the area where you stop for sleep or rest. Free state filing income tax If you work in the transportation industry, however, see Special rate for transportation workers , later. Free state filing income tax Standard meal allowance for areas outside the continental United States. Free state filing income tax    The standard meal allowance rates above do not apply to travel in Alaska, Hawaii, or any other location outside the continental United States. Free state filing income tax The Department of Defense establishes per diem rates for Alaska, Hawaii, Puerto Rico, American Samoa, Guam, Midway, the Northern Mariana Islands, the U. Free state filing income tax S. Free state filing income tax Virgin Islands, Wake Island, and other non-foreign areas outside the continental United States. Free state filing income tax The Department of State establishes per diem rates for all other foreign areas. Free state filing income tax    You can access per diem rates for non-foreign areas outside the continental United States at: www. Free state filing income tax defensetravel. Free state filing income tax dod. Free state filing income tax mil/site/perdiemCalc. Free state filing income tax cfm. Free state filing income tax You can access all other foreign per diem rates at www. Free state filing income tax state. Free state filing income tax gov/travel/. Free state filing income tax Click on “Travel Per Diem Allowances for Foreign Areas” under “Foreign Per Diem Rates,” to obtain the latest foreign per diem rates. Free state filing income tax Special rate for transportation workers. Free state filing income tax   You can use a special standard meal allowance if you work in the transportation industry. Free state filing income tax You are in the transportation industry if your work: Directly involves moving people or goods by airplane, barge, bus, ship, train, or truck, and Regularly requires you to travel away from home and, during any single trip, usually involves travel to areas eligible for different standard meal allowance rates. Free state filing income tax If this applies to you, you can claim a standard daily meal allowance of $59 ($65 for travel outside the continental United States). Free state filing income tax   Using the special rate for transportation workers eliminates the need for you to determine the standard meal allowance for every area where you stop for sleep or rest. Free state filing income tax If you choose to use the special rate for any trip, you must use the special rate (and not use the regular standard meal allowance rates) for all trips you take that year. Free state filing income tax Travel for days you depart and return. Free state filing income tax   For both the day you depart for and the day you return from a business trip, you must prorate the standard meal allowance (figure a reduced amount for each day). Free state filing income tax You can do so by one of two methods. Free state filing income tax Method 1: You can claim 3/4 of the standard meal allowance. Free state filing income tax Method 2: You can prorate using any method that you consistently apply and that is in accordance with reasonable business practice. Free state filing income tax Example. Free state filing income tax Jen is employed in New Orleans as a convention planner. Free state filing income tax In March, her employer sent her on a 3-day trip to Washington, DC, to attend a planning seminar. Free state filing income tax She left her home in New Orleans at 10 a. Free state filing income tax m. Free state filing income tax on Wednesday and arrived in Washington, DC, at 5:30 p. Free state filing income tax m. Free state filing income tax After spending two nights there, she flew back to New Orleans on Friday and arrived back home at 8:00 p. Free state filing income tax m. Free state filing income tax Jen's employer gave her a flat amount to cover her expenses and included it with her wages. Free state filing income tax Under Method 1, Jen can claim 2½ days of the standard meal allowance for Washington, DC: 3/4 of the daily rate for Wednesday and Friday (the days she departed and returned), and the full daily rate for Thursday. Free state filing income tax Under Method 2, Jen could also use any method that she applies consistently and that is in accordance with reasonable business practice. Free state filing income tax For example, she could claim 3 days of the standard meal allowance even though a federal employee would have to use Method 1 and be limited to only 2½ days. Free state filing income tax Travel in the United States The following discussion applies to travel in the United States. Free state filing income tax For this purpose, the United States includes only the 50 states and the District of Columbia. Free state filing income tax The treatment of your travel expenses depends on how much of your trip was business related and on how much of your trip occurred within the United States. Free state filing income tax See Part of Trip Outside the United States , later. Free state filing income tax Trip Primarily for Business You can deduct all your travel expenses if your trip was entirely business related. Free state filing income tax If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct your business-related travel expenses. Free state filing income tax These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination. Free state filing income tax Example. Free state filing income tax You work in Atlanta and take a business trip to New Orleans in May. Free state filing income tax On your way home, you stop in Mobile to visit your parents. Free state filing income tax You spend $1,996 for the 9 days you are away from home for travel, meals, lodging, and other travel expenses. Free state filing income tax If you had not stopped in Mobile, you would have been gone only 6 days, and your total cost would have been $1,696. Free state filing income tax You can deduct $1,696 for your trip, including the cost of round-trip transportation to and from New Orleans. Free state filing income tax The deduction for your meals is subject to the 50% limit on meals mentioned earlier. Free state filing income tax Trip Primarily for Personal Reasons If your trip was primarily for personal reasons, such as a vacation, the entire cost of the trip is a nondeductible personal expense. Free state filing income tax However, you can deduct any expenses you have while at your destination that are directly related to your business. Free state filing income tax A trip to a resort or on a cruise ship may be a vacation even if the promoter advertises that it is primarily for business. Free state filing income tax The scheduling of incidental business activities during a trip, such as viewing videotapes or attending lectures dealing with general subjects, will not change what is really a vacation into a business trip. Free state filing income tax Part of Trip Outside the United States If part of your trip is outside the United States, use the rules described later under Travel Outside the United States for that part of the trip. Free state filing income tax For the part of your trip that is inside the United States, use the rules for travel in the United States. Free state filing income tax Travel outside the United States does not include travel from one point in the United States to another point in the United States. Free state filing income tax The following discussion can help you determine whether your trip was entirely within the United States. Free state filing income tax Public transportation. Free state filing income tax   If you travel by public transportation, any place in the United States where that vehicle makes a scheduled stop is a point in the United States. Free state filing income tax Once the vehicle leaves the last scheduled stop in the United States on its way to a point outside the United States, you apply the rules under Travel Outside the United States . Free state filing income tax Example. Free state filing income tax You fly from New York to Puerto Rico with a scheduled stop in Miami. Free state filing income tax You return to New York nonstop. Free state filing income tax The flight from New York to Miami is in the United States, so only the flight from Miami to Puerto Rico is outside the United States. Free state filing income tax Because there are no scheduled stops between Puerto Rico and New York, all of the return trip is outside the United States. Free state filing income tax Private car. Free state filing income tax   Travel by private car in the United States is travel between points in the United States, even when you are on your way to a destination outside the United States. Free state filing income tax Example. Free state filing income tax You travel by car from Denver to Mexico City and return. Free state filing income tax Your travel from Denver to the border and from the border back to Denver is travel in the United States, and the rules in this section apply. Free state filing income tax The rules under Travel Outside the United States apply to your trip from the border to Mexico City and back to the border. Free state filing income tax Travel Outside the United States If any part of your business travel is outside the United States, some of your deductions for the cost of getting to and from your destination may be limited. Free state filing income tax For this purpose, the United States includes only the 50 states and the District of Columbia. Free state filing income tax How much of your travel expenses you can deduct depends in part upon how much of your trip outside the United States was business related. Free state filing income tax See chapter 1 of Publication 463 for information on luxury water travel. Free state filing income tax Travel Entirely for Business or Considered Entirely for Business You can deduct all your travel expenses of getting to and from your business destination if your trip is entirely for business or considered entirely for business. Free state filing income tax Travel entirely for business. Free state filing income tax   If you travel outside the United States and you spend the entire time on business activities, you can deduct all of your travel expenses. Free state filing income tax Travel considered entirely for business. Free state filing income tax   Even if you did not spend your entire time on business activities, your trip is considered entirely for business if you meet at least one of the following four exceptions. Free state filing income tax Exception 1 - No substantial control. Free state filing income tax   Your trip is considered entirely for business if you did not have substantial control over arranging the trip. Free state filing income tax The fact that you control the timing of your trip does not, by itself, mean that you have substantial control over arranging your trip. Free state filing income tax   You do not have substantial control over your trip if you: Are an employee who was reimbursed or paid a travel expense allowance, Are not related to your employer, and Are not a managing executive. Free state filing income tax    “Related to your employer” is defined later in this chapter under Per Diem and Car Allowances . Free state filing income tax   A “managing executive” is an employee who has the authority and responsibility, without being subject to the veto of another, to decide on the need for the business travel. Free state filing income tax    A self-employed person generally has substantial control over arranging business trips. Free state filing income tax Exception 2 - Outside United States no more than a week. Free state filing income tax   Your trip is considered entirely for business if you were outside the United States for a week or less, combining business and nonbusiness activities. Free state filing income tax One week means 7 consecutive days. Free state filing income tax In counting the days, do not count the day you leave the United States, but do count the day you return to the United States. Free state filing income tax Exception 3 - Less than 25% of time on personal activities. Free state filing income tax   Your trip is considered entirely for business if: You were outside the United States for more than a week, and You spent less than 25% of the total time you were outside the United States on nonbusiness activities. Free state filing income tax For this purpose, count both the day your trip began and the day it ended. Free state filing income tax Exception 4 - Vacation not a major consideration. Free state filing income tax   Your trip is considered entirely for business if you can establish that a personal vacation was not a major consideration, even if you have substantial control over arranging the trip. Free state filing income tax Travel Primarily for Business If you travel outside the United States primarily for business but spend some of your time on nonbusiness activities, you generally cannot deduct all of your travel expenses. Free state filing income tax You can only deduct the business portion of your cost of getting to and from your destination. Free state filing income tax You must allocate the costs between your business and nonbusiness activities to determine your deductible amount. Free state filing income tax These travel allocation rules are discussed in chapter 1 of Publication 463. Free state filing income tax You do not have to allocate your travel expense deduction if you meet one of the four exceptions listed earlier under Travel considered entirely for business. Free state filing income tax In those cases, you can deduct the total cost of getting to and from your destination. Free state filing income tax Travel Primarily for Personal Reasons If you travel outside the United States primarily for vacation or for investment purposes, the entire cost of the trip is a nondeductible personal expense. Free state filing income tax If you spend some time attending brief professional seminars or a continuing education program, you can deduct your registration fees and other expenses you have that are directly related to your business. Free state filing income tax Conventions You can deduct your travel expenses when you attend a convention if you can show that your attendance benefits your trade or business. Free state filing income tax You cannot deduct the travel expenses for your family. Free state filing income tax If the convention is for investment, political, social, or other purposes unrelated to your trade or business, you cannot deduct the expenses. Free state filing income tax Your appointment or election as a delegate does not, in itself, determine whether you can deduct travel expenses. Free state filing income tax You can deduct your travel expenses only if your attendance is connected to your own trade or business. Free state filing income tax Convention agenda. Free state filing income tax   The convention agenda or program generally shows the purpose of the convention. Free state filing income tax You can show your attendance at the convention benefits your trade or business by comparing the agenda with the official duties and responsibilities of your position. Free state filing income tax The agenda does not have to deal specifically with your official duties and responsibilities; it will be enough if the agenda is so related to your position that it shows your attendance was for business purposes. Free state filing income tax Conventions held outside the North American area. Free state filing income tax    See chapter 1 of Publication 463 for information on conventions held outside the North American area. Free state filing income tax Entertainment Expenses You may be able to deduct business-related entertainment expenses you have for entertaining a client, customer, or employee. Free state filing income tax You can deduct entertainment expenses only if they are both ordinary and necessary (defined earlier in the Introduction ) and meet one of the following tests. Free state filing income tax Directly-related test. Free state filing income tax Associated test. Free state filing income tax Both of these tests are explained in chapter 2 of Publication 463. Free state filing income tax The amount you can deduct for entertainment expenses may be limited. Free state filing income tax Generally, you can deduct only 50% of your unreimbursed entertainment expenses. Free state filing income tax This limit is discussed next. Free state filing income tax 50% Limit In general, you can deduct only 50% of your business-related meal and entertainment expenses. Free state filing income tax (If you are subject to the Department of Transportation's “hours of service” limits, you can deduct 80% of your business-related meal and entertainment expenses. Free state filing income tax See Individuals subject to “hours of service” limits , later. Free state filing income tax ) The 50% limit applies to employees or their employers, and to self-employed persons (including independent contractors) or their clients, depending on whether the expenses are reimbursed. Free state filing income tax Figure 26-A summarizes the general rules explained in this section. Free state filing income tax The 50% limit applies to business meals or entertainment expenses you have while: Traveling away from home (whether eating alone or with others) on business, Entertaining customers at your place of business, a restaurant, or other location, or Attending a business convention or reception, business meeting, or business luncheon at a club. Free state filing income tax Included expenses. Free state filing income tax   Expenses subject to the 50% limit include: Taxes and tips relating to a business meal or entertainment activity, Cover charges for admission to a nightclub, Rent paid for a room in which you hold a dinner or cocktail party, and Amounts paid for parking at a sports arena. Free state filing income tax However, the cost of transportation to and from a business meal or a business-related entertainment activity is not subject to the 50% limit. Free state filing income tax Application of 50% limit. Free state filing income tax   The 50% limit on meal and entertainment expenses applies if the expense is otherwise deductible and is not covered by one of the exceptions discussed later in this section. Free state filing income tax   The 50% limit also applies to certain meal and entertainment expenses that are not business related. Free state filing income tax It applies to meal and entertainment expenses incurred for the production of income, including rental or royalty income. Free state filing income tax It also applies to the cost of meals included in deductible educational expenses. Free state filing income tax When to apply the 50% limit. Free state filing income tax   You apply the 50% limit after determining the amount that would otherwise qualify for a deduction. Free state filing income tax You first have to determine the amount of meal and entertainment expenses that would be deductible under the other rules discussed in this chapter. Free state filing income tax Example 1. Free state filing income tax You spend $200 for a business-related meal. Free state filing income tax If $110 of that amount is not allowable because it is lavish and extravagant, the remaining $90 is subject to the 50% limit. Free state filing income tax Your deduction cannot be more than $45 (. Free state filing income tax 50 × $90). Free state filing income tax Example 2. Free state filing income tax You purchase two tickets to a concert and give them to a client. Free state filing income tax You purchased the tickets through a ticket agent. Free state filing income tax You paid $200 for the two tickets, which had a face value of $80 each ($160 total). Free state filing income tax Your deduction cannot be more than $80 (. Free state filing income tax 50 × $160). Free state filing income tax Exceptions to the 50% Limit Generally, business-related meal and entertainment expenses are subject to the 50% limit. Free state filing income tax Figure 26-A can help you determine if the 50% limit applies to you. Free state filing income tax Your meal or entertainment expense is not subject to the 50% limit if the expense meets one of the following exceptions. Free state filing income tax Employee's reimbursed expenses. Free state filing income tax   If you are an employee, you are not subject to the 50% limit on expenses for which your employer reimburses you under an accountable plan. Free state filing income tax Accountable plans are discussed later under Reimbursements . Free state filing income tax Individuals subject to “hours of service” limits. Free state filing income tax   You can deduct a higher percentage of your meal expenses while traveling away from your tax home if the meals take place during or incident to any period subject to the Department of Transportation's “hours of service” limits. Free state filing income tax The percentage is 80%. Free state filing income tax   Individuals subject to the Department of Transportation's “hours of service” limits include the following persons. Free state filing income tax Certain air transportation workers (such as pilots, crew, dispatchers, mechanics, and control tower operators) who are under Federal Aviation Administration regulations. Free state filing income tax Interstate truck operators and bus drivers who are under Department of Transportation regulations. Free state filing income tax Certain railroad employees (such as engineers, conductors, train crews, dispatchers, and control operations personnel) who are under Federal Railroad Administration regulations. Free state filing income tax Certain merchant mariners who are under Coast Guard regulations. Free state filing income tax Other exceptions. Free state filing income tax   There are also exceptions for the self-employed, advertising expenses, selling meals or entertainment, and charitable sports events. Free state filing income tax These are discussed in Publication 463. Free state filing income tax Figure 26-A. Free state filing income tax Does the 50% Limit Apply to Your Expenses? There are exceptions to these rules. Free state filing income tax See Exceptions to the 50% Limit . Free state filing income tax Please click here for the text description of the image. Free state filing income tax Entertainment expenses: 50% limit What Entertainment Expenses Are Deductible? This section explains different types of entertainment expenses you may be able to deduct. Free state filing income tax Entertainment. Free state filing income tax    Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation. Free state filing income tax Examples include entertaining guests at nightclubs; at social, athletic, and sporting clubs; at theaters; at sporting events; or on hunting, fishing, vacation, and similar trips. Free state filing income tax A meal as a form of entertainment. Free state filing income tax   Entertainment includes the cost of a meal you provide to a customer or client, whether the meal is a part of other entertainment or by itself. Free state filing income tax A meal expense includes the cost of food, beverages, taxes, and tips for the meal. Free state filing income tax To deduct an entertainment-related meal, you or your employee must be present when the food or beverages are provided. Free state filing income tax You cannot claim the cost of your meal both as an entertainment expense and as a travel expense. Free state filing income tax Separating costs. Free state filing income tax   If you have one expense that includes the costs of entertainment and other services (such as lodging or transportation), you must allocate that expense between the cost of entertainment and the cost of other services. Free state filing income tax You must have a reasonable basis for making this allocation. Free state filing income tax For example, you must allocate your expenses if a hotel includes entertainment in its lounge on the same bill with your room charge. Free state filing income tax Taking turns paying for meals or entertainment. Free state filing income tax   If a group of business acquaintances take turns picking up each others' meal or entertainment checks without regard to whether any business purposes are served, no member of the group can deduct any part of the expense. Free state filing income tax Lavish or extravagant expenses. Free state filing income tax   You cannot deduct expenses for entertainment that are lavish or extravagant. Free state filing income tax An expense is not considered lavish or extravagant if it is reasonable considering the facts and circumstances. Free state filing income tax Expenses will not be disallowed just because they are more than a fixed dollar amount or take place at deluxe restaurants, hotels, nightclubs, or resorts. Free state filing income tax Trade association meetings. Free state filing income tax    You can deduct entertainment expenses that are directly related to, and necessary for, attending business meetings or conventions of certain exempt organizations if the expenses of your attendance are related to your active trade or business. Free state filing income tax These organizations include business leagues, chambers of commerce, real estate boards, trade associations, and professional associations. Free state filing income tax Entertainment tickets. Free state filing income tax   Generally, you cannot deduct more than the face value of an entertainment ticket, even if you paid a higher price. Free state filing income tax For example, you cannot deduct service fees you pay to ticket agencies or brokers or any amount over the face value of the tickets you pay to scalpers. Free state filing income tax What Entertainment Expenses Are Not Deductible? This section explains different types of entertainment expenses you generally may not be able to deduct. Free state filing income tax Club dues and membership fees. Free state filing income tax   You cannot deduct dues (including initiation fees) for membership in any club organized for: Business, Pleasure, Recreation, or Other social purpose. Free state filing income tax This rule applies to any membership organization if one of its principal purposes is either: To conduct entertainment activities for members or their guests, or To provide members or their guests with access to entertainment facilities. Free state filing income tax   The purposes and activities of a club, not its name, will determine whether or not you can deduct the dues. Free state filing income tax You cannot deduct dues paid to: Country clubs, Golf and athletic clubs, Airline clubs, Hotel clubs, and Clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. Free state filing income tax Entertainment facilities. Free state filing income tax   Generally, you cannot deduct any expense for the use of an entertainment facility. Free state filing income tax This includes expenses for depreciation and operating costs such as rent, utilities, maintenance, and protection. Free state filing income tax   An entertainment facility is any property you own, rent, or use for entertainment. Free state filing income tax Examples include a yacht, hunting lodge, fishing camp, swimming pool, tennis court, bowling alley, car, airplane, apartment, hotel suite, or home in a vacation resort. Free state filing income tax Out-of-pocket expenses. Free state filing income tax   You can deduct out-of-pocket expenses, such as for food and beverages, catering, gas, and fishing bait, that you provided during entertainment at a facility. Free state filing income tax These are not expenses for the use of an entertainment facility. Free state filing income tax However, these expenses are subject to the directly-related and associated tests and to the 50% Limit discussed earlier. Free state filing income tax Additional information. Free state filing income tax   For more information on entertainment expenses, including discussions of the directly-related and associated tests, see chapter 2 of Publication 463. Free state filing income tax Gift Expenses If you give gifts in the course of your trade or business, you can deduct all or part of the cost. Free state filing income tax This section explains the limits and rules for deducting the costs of gifts. Free state filing income tax $25 limit. Free state filing income tax   You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year. Free state filing income tax A gift to a company that is intended for the eventual personal use or benefit of a particular person or a limited class of people will be considered an indirect gift to that particular person or to the individuals within that class of people who receive the gift. Free state filing income tax   If you give a gift to a member of a customer's family, the gift is generally considered to be an indirect gift to the customer. Free state filing income tax This rule does not apply if you have a bona fide, independent business connection with that family member and the gift is not intended for the customer's eventual use or benefit. Free state filing income tax   If you and your spouse both give gifts, both of you are treated as one taxpayer. Free state filing income tax It does not matter whether you have separate businesses, are separately employed, or whether each of you has an independent connection with the recipient. Free state filing income tax If a partnership gives gifts, the partnership and the partners are treated as one taxpayer. Free state filing income tax Incidental costs. Free state filing income tax   Incidental costs, such as engraving on jewelry, or packaging, insuring, and mailing, are generally not included in determining the cost of a gift for purposes of the $25 limit. Free state filing income tax   A cost is incidental only if it does not add substantial value to the gift. Free state filing income tax For example, the cost of customary gift wrapping is an incidental cost. Free state filing income tax However, the purchase of an ornamental basket for packaging fruit is not an incidental cost if the value of the basket is substantial compared to the value of the fruit. Free state filing income tax Exceptions. Free state filing income tax   The following items are not considered gifts for purposes of the $25 limit. Free state filing income tax An item that costs $4 or less and: Has your name clearly and permanently imprinted on the gift, and Is one of a number of identical items you widely distribute. Free state filing income tax Examples include pens, desk sets, and plastic bags and cases. Free state filing income tax Signs, display racks, or other promotional material to be used on the business premises of the recipient. Free state filing income tax Gift or entertainment. Free state filing income tax   Any item that might be considered either a gift or entertainment generally will be considered entertainment. Free state filing income tax However, if you give a customer packaged food or beverages you intend the customer to use at a later date, treat it as a gift. Free state filing income tax    If you give a customer tickets to a theater performance or sporting event and you do not go with the customer to the performance or event, you have a choice. Free state filing income tax You can treat the cost of the tickets as either a gift expense or an entertainment expense, whichever is to your advantage. Free state filing income tax    If you go with the customer to the event, you must treat the cost of the tickets as an entertainment expense. Free state filing income tax You cannot choose, in this case, to treat the cost of the tickets as a gift expense. Free state filing income tax Transportation Expenses This section discusses expenses you can deduct for business transportation when you are not traveling away from home as defined earlier under Travel Expenses . Free state filing income tax These expenses include the cost of transportation by air, rail, bus, taxi, etc. Free state filing income tax , and the cost of driving and maintaining your car. Free state filing income tax Transportation expenses include the ordinary and necessary costs of all of the following. Free state filing income tax Getting from one workplace to another in the course of your business or profession when you are traveling within the area of your tax home. Free state filing income tax (Tax home is defined earlier under Travel Expenses . Free state filing income tax ) Visiting clients or customers. Free state filing income tax Going to a business meeting away from your regular workplace. Free state filing income tax Getting from your home to a temporary workplace when you have one or more regular places of work. Free state filing income tax These temporary workplaces can be either within the area of your tax home or outside that area. Free state filing income tax Transportation expenses do not include expenses you have while traveling away from home overnight. Free state filing income tax Those expenses are travel expenses, discussed earlier. Free state filing income tax However, if you use your car while traveling away from home overnight, use the rules in this section to figure your car expense deduction. Free state filing income tax See Car Expenses , later. Free state filing income tax Illustration of transportation expenses. Free state filing income tax    Figure 26-B illustrates the rules for when you can deduct transportation expenses when you have a regular or main job away from your home. Free state filing income tax You may want to refer to it when deciding whether you can deduct your transportation expenses. Free state filing income tax Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses. Free state filing income tax However, there are many exceptions for deducting transportation expenses, like whether your work location is temporary (inside or outside the metropolitan area), traveling for same trade or business, or if you have a home office. Free state filing income tax Temporary work location. Free state filing income tax   If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance. Free state filing income tax   If your employment at a work location is realistically expected to last (and does in fact last) for 1 year or less, the employment is temporary unless there are facts and circumstances that would indicate otherwise. Free state filing income tax   If your employment at a work location is realistically expected to last for more than 1 year or if there is no realistic expectation that the employment will last for 1 year or less, the employment is not temporary, regardless of whether it actually lasts for more than 1 year. Free state filing income tax   If employment at a work location initially is realistically expected to last for 1 year or less, but at some later date the employment is realistically expected to last more than 1 year, that employment will be treated as temporary (unless there are facts and circumstances that would indicate otherwise) until your expectation changes. Free state filing income tax It will not be treated as temporary after the date you determine it will last more than 1 year. Free state filing income tax   If the temporary work location is beyond the general area of your regular place of work and you stay overnight, you are traveling away from home. Free state filing income tax You may have deductible travel expenses as discussed earlier in this chapter. Free state filing income tax No regular place of work. Free state filing income tax   If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. Free state filing income tax   Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. Free state filing income tax   You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. Free state filing income tax These are nondeductible commuting expenses. Free state filing income tax Two places of work. Free state filing income tax   If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. Free state filing income tax However, if for some personal reason you do not go directly from one location to the other, you cannot deduct more than the amount it would have cost you to go directly from the first location to the second. Free state filing income tax   Transportation expenses you have in going between home and a part-time job on a day off from your main job are commuting expenses. Free state filing income tax You cannot deduct them. Free state filing income tax Armed Forces reservists. Free state filing income tax   A meeting of an Armed Forces reserve unit is a second place of business if the meeting is held on a day on which you work at your regular job. Free state filing income tax You can deduct the expense of getting from one workplace to the other as just discussed under Two places of work , earlier. Free state filing income tax   You usually cannot deduct the expense if the reserve meeting is held on a day on which you do not work at your regular job. Free state filing income tax In this case, your transportation generally is a nondeductible commuting expense. Free state filing income tax However, you can deduct your transportation expenses if the location of the meeting is temporary and you have one or more regular places of work. Free state filing income tax   If you ordinarily work in a particular metropolitan area but not at any specific location and the reserve meeting is held at a temporary location outside that metropolitan area, you can deduct your transportation expenses. Free state filing income tax   If you travel away from home overnight to attend a guard or reserve meeting, you can deduct your travel expenses. Free state filing income tax These expenses are discussed earlier under Travel Expenses . Free state filing income tax   If you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you may be able to deduct some of your reserve-related travel costs as an adjustment to income rather than as an itemized deduction. Free state filing income tax See Armed Forces reservists traveling more than 100 miles from home under Special Rules, later. Free state filing income tax Commuting expenses. Free state filing income tax   You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or of driving a car between your home and your main or regular place of work. Free state filing income tax These costs are personal commuting expenses. Free state filing income tax You cannot deduct commuting expenses no matter how far your home is from your regular place of work. Free state filing income tax You cannot deduct commuting expenses even if you work during the commuting trip. Free state filing income tax Example. Free state filing income tax You sometimes use your cell phone to make business calls while commuting to and from work. Free state filing income tax Sometimes business associates ride with you to and from work, and you have a business discussion in the car. Free state filing income tax These activities do not change the trip from personal to business. Free state filing income tax You cannot deduct your commuting expenses. Free state filing income tax Parking fees. Free state filing income tax   Fees you pay to park your car at your place of business are nondeductible commuting expenses. Free state filing income tax You can, however, deduct business-related parking fees when visiting a customer or client. Free state filing income tax Advertising display on car. Free state filing income tax   Putting display material that advertises your business on your car does not change the use of your car from personal use to business use. Free state filing income tax If you use this car for commuting or other personal uses, you still cannot deduct your expenses for those uses. Free state filing income tax Car pools. Free state filing income tax   You cannot deduct the cost of using your car in a nonprofit car pool. Free state filing income tax Do not include payments you receive from the passengers in your income. Free state filing income tax These payments are considered reimbursements of your expenses. Free state filing income tax However, if you operate a car pool for a profit, you must include payments from passengers in your income. Free state filing income tax You can then deduct your car expenses (using the rules in this chapter). Free state filing income tax Hauling tools or instruments. Free state filing income tax   Hauling tools or instruments in your car while commuting to and from work does not make your car expenses deductible. Free state filing income tax However, you can deduct any additional costs you have for hauling tools or instruments (such as for renting a trailer you tow with your car). Free state filing income tax Union members' trips from a union hall. Free state filing income tax   If you get your work assignments at a union hall and then go to your place of work, the costs of getting from the union hall to your place of work are nondeductible commuting expenses. Free state filing income tax Although you need the union to get your work assignments, you are employed where you work, not where the union hall is located. Free state filing income tax Office in the home. Free state filing income tax   If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. Free state filing income tax (See chapter 28 for information on determining if your home office qualifies as a principal place of business. Free state filing income tax ) Figure 26-B. Free state filing income tax When Are Transportation Expenses Deductible? Most employees and self-employed persons can use this chart. Free state filing income tax (Do not use this chart if your home is your principal place of business. Free state filing income tax See Office in the home . Free state filing income tax ) Please click here for the text description of the image. Free state filing income tax Figure 26-B. Free state filing income tax Local Transportation Examples of deductible transportation. Free state filing income tax   The following examples show when you can deduct transportation expenses based on the location of your work and your home. Free state filing income tax Example 1. Free state filing income tax You regularly work in an office in the city where you live. Free state filing income tax Your employer sends you to a 1-week training session at a different office in the same city. Free state filing income tax You travel directly from your home to the training location and return each day. Free state filing income tax You can deduct the cost of your daily round-trip transportation between your home and the training location. Free state filing income tax Example 2. Free state filing income tax Your principal place of business is in your home. Free state filing income tax You can deduct the cost of round-trip transportation between your qualifying home office and your client's or customer's place of business. Free state filing income tax Example 3. Free state filing income tax You have no regular office, and you do not have an office in your home. Free state filing income tax In this case, the location of your first business contact inside the metropolitan area is considered your office. Free state filing income tax Transportation expenses between your home and this first contact are nondeductible commuting expenses. Free state filing income tax Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. Free state filing income tax While you cannot deduct the costs of these first and last trips, you can deduct the costs of going from one client or customer to another. Free state filing income tax With no regular or home office, the costs of travel between two or more business contacts in a metropolitan area are deductible while the costs of travel between the home to (and from) business contacts are not deductible. Free state filing income tax Car Expenses If you use your car for business purposes, you may be able to deduct car expenses. Free state filing income tax You generally can use one of the two following methods to figure your deductible expenses. Free state filing income tax Standard mileage rate. Free state filing income tax Actual car expenses. Free state filing income tax If you use actual car expenses to figure your deduction for a car you lease, there are rules that affect the amount of your lease payments you can deduct. Free state filing income tax See Leasing a car under Actual Car Expenses, later. Free state filing income tax In this chapter, “car” includes a van, pickup, or panel truck. Free state filing income tax Rural mail carriers. Free state filing income tax   If you are a rural mail carrier, you may be able to treat the amount of qualified reimbursement you received as the amount of your allowable expense. Free state filing income tax Because the qualified reimbursement is treated as paid under an accountable plan, your employer should not include the amount of reimbursement in your income. Free state filing income tax   If your vehicle expenses are more than the amount of your reimbursement, you can deduct the unreimbursed expenses as an itemized deduction on Schedule A (Form 1040). Free state filing income tax You must complete Form 2106 and attach it to your Form 1040. Free state filing income tax   A “qualified reimbursement” is the reimbursement you receive that meets both of the following conditions. Free state filing income tax It is given as an equipment maintenance allowance (EMA) to employees of the U. Free state filing income tax S. Free state filing income tax Postal Service. Free state filing income tax It is at the rate contained in the 1991 collective bargaining agreement. Free state filing income tax Any later agreement cannot increase the qualified reimbursement amount by more than the rate of inflation. Free state filing income tax See your employer for information on your reimbursement. Free state filing income tax If you are a rural mail carrier and received a qualified reimbursement, you cannot use the standard mileage rate. Free state filing income tax Standard Mileage Rate You may be able to use the standard mileage rate to figure the deductible costs of operating your car for business purposes. Free state filing income tax For 2013, the standard mileage rate for business use is 56½ cents per mile. Free state filing income tax If you use the standard mileage rate for a year, you cannot deduct your actual car expenses for that year, but see Parking fees and tolls, later. Free state filing income tax You generally can use the standard mileage rate whether or not you are reimbursed and whether or not any reimbursement is more or less than the amount figured using the standard mileage rate. Free state filing income tax See Reimbursements under How To Report, later. Free state filing income tax Choosing the standard mileage rate. Free state filing income tax   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Free state filing income tax Then in later years, you can choose to use either the standard mileage rate or actual expenses. Free state filing income tax   If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period. Free state filing income tax   You must make the choice to use the standard mileage rate by the due date (including extensions) of your return. Free state filing income tax You cannot revoke the choice. Free state filing income tax However, in a later year, you can switch from the standard mileage rate to the actual expenses method. Free state filing income tax If you change to the actual expenses method in a later year, but before your car is fully depreciated, you have to estimate the remaining useful life of the car and use straight line depreciation. Free state filing income tax Example. Free state filing income tax Larry is an employee who occasionally uses his own car for business purposes. Free state filing income tax He purchased the car in 2011, but he did not claim any unreimburse
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Understanding your CP259 Notice

We've sent you this notice because our records indicate you didn't file the required business tax return identified in the notice.

Printable samples of this notice (PDF)

Tax publications you may find useful

How to get help

Calling the 1-800 number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).
 


What you need to do

  • File your required business return immediately.
    • If eligible, file your return electronically with all required schedules, using your e-file provider, or
    • File a paper return with all required schedules
  • Complete the Response form enclosed with your notice and mail it to us, using the enclosed envelope:
    • To explain why you are filing late.
    • To explain why you don’t think you need to file.
    • If you have already filed and it's been more than four weeks, or if you used a different name or Employer ID number (EIN) than shown on the notice when filing.
  • If you have filed within the last four weeks using the same name and EIN shown on the notice, you may disregard this notice.

You may want to...

  • Review Tax Information for Businesses which provides information regarding various business filing issues.
  • Review your records and ensure all returns are filed timely.

Answers to Common Questions

Why did I receive multiple CP 259 notices?
If your business hasn't filed tax returns, a notice will be generated and mailed for each tax form and tax period the IRS shows as delinquent.

I have never had employees and or filed this return previously so why did I receive a notice requesting me to file?
When you apply for an Employer Identification number, filing requirements are established requiring specific types of returns to be filed (e.g. Form 940, Employer's Annual Federal Unemployment Tax Return; Form 941, Employer's Quarterly Federal Tax Return; Form 1120, U.S. Corporation Income Tax Return, etc.). When the return is not filed, the IRS considers it to be delinquent and generates a notice requesting the return be filed.

Do I still need to file a tax return even if I had no employees or business activity during the tax period(s) in question?
If you had no employees or business activity during a tax period you are not required to file a return for that tax period. You still need to respond to this notice. If you made Federal Tax Deposits or other payments or credits for the tax period, you must file a signed return showing the payments to get a refund.


Tips for next year

File all required returns by the appropriate due date.


Understanding your notice

Reading your notice
Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP259, Page 1

Notice CP259, Page 2

Notice CP259, Page 3

Notice CP259, Page 4

Page Last Reviewed or Updated: 28-Mar-2014

The Free State Filing Income Tax

Free state filing income tax There are three ways you can request an automatic extension of time to file a U.S. individual income tax return: (1) you can electronically file Form 4868 (PDF), Application For Automatic Extension of Time To File U.S. Individual Tax Return; (2) you can pay all or part of your estimated income tax due using a credit or debit card or by using the Electronic Federal Tax Payment System (EFTPS); or (3) you can file a paper Form 4868 by mail. Free state filing income tax Free state filing income tax If you file your Form 4868 electronically you will receive an acknowledgement or confirmation number for your records and you do not need to mail in Form 4868. If you need to pay additional taxes when filing Form 4868 electronically, you may do so through the outside service provider or through e-file. You can refer to your tax software or tax professional for ways to file electronically using e-file services. Several companies offer free filing of Form 4868 through the Free File program that you can access on the IRS.gov website. If you wish to file electronically, be sure to have a copy of last year's tax return. You will be asked to provide the adjusted gross income (AGI) from the return for taxpayer verification. Free state filing income tax Free state filing income tax A second way of requesting an automatic extension of time to file your individual income tax return is to pay part or your entire estimated income tax due by credit card or debit card or by using EFTPS. You may pay by phone or Internet through one of the service providers listed on Form 4868. Each service provider will charge a convenience fee based on the amount of the tax payment. At the completion of the transaction, you will receive a confirmation number for your records. Free state filing income tax Free state filing income tax Finally, you can request an automatic extension of time to file your individual income tax return by completing paper Form 4868 and mailing it to the appropriate address provided on the form. Free state filing income tax Free state filing income tax Please be aware that an extension of time to file is NOT an extension of time to pay.