Question

During the current year, Harry, a self-employed accountant, travels from Kansas City to Miami for a 1-week business trip. While in Miami, Harry decides to stay for an additional 5 days of vacation. Harry pays $600 for airfare, $200 for meals, and $500 for lodging while on business. The cost of meals and lodging while on vacation was $300 and $500, respectively. How much may Harry deduct as travel expenses for the trip?

a.$1,200
b.$1,100
c.$600
d.$1,300
e.None of these choices are correct.

Answer 1

$1200

Step-by-step explanation:

First and foremost ,deductible expenses are directly related to a business operation . It is guided by so many rules to ensure that the deductions are not excessively charged.

In a situation where business and vacation trips are combined , it is only the business related expenses that qualify for travel expenses with exemption to trips on acquiring or starting a new business which related expenses can be charged to start up expenses. Expenses for dependent companion during a business trips also do not qualify except they are employees of the business as well.

Concerning meal expenses , it qualifies for travel expenses to the tune of 50% .

Answer 2

A

Step-by-step explanation:

$1,200 = $600 + (50% × $200) + $500