Travel, Auto, Meals
- B. Travel & Auto Expenses.
- Consultants who use their car for travel in their practice may deduct either the actual expenses (gas, parking, repairs, and depreciation) or the standard mileage rate of 55.5 cents per mile for the business use of their personal car. The IRS requires the use of a mileage log to record business activity. An individual whose principal place of business is their home can deduct travel to their virtual office, meetings and client locations.
- C. Meals & Entertainment (M&E).
- The consultant can deduct 50% of the cost of M&E with existing clients to discuss a legitimate business purpose. For potential clients, the consultant must have more than just a general expectation of a future business benefit. Similar to the mileage log requirement, a journal of the time, place, client, and business discussed should be kept. You cannot deduct the cost of your own daily meals just because you are self-employed, unless you are traveling away from home on business. However, the consultant attending a professional association meeting may deduct the cost of his own meal as entertainment.
Tax Tip: Consultants who are considering purchasing a new car may write off up to $11,700 in accelerated depreciation in the year of purchase, provided the business use percentage is greater than 50%.