Business expense account

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Nov 21, 2006 8:29 am

has anyone every hear of this? it works like a flexible spending account, but for business expenses. The money comes out pretax.


my question is can you still write off business miles if you use this. also, does any out there use this?

Nov 21, 2006 8:31 am

sorry for the grammer errors, my laptop skips letter sometimes

Nov 21, 2006 7:58 pm

Yes it exists.



You can deduct anything that is affiliated with running your business.



Miles need to be justified using a firm-developed worksheet... you tally

the miles, they do the math, and your firm deposit the appropriate

amount of $$'s back into your account once your BM approves the

expense.



When employed at a wirehouse, I did $600 per month. This usually

covered a small portion of the expenses. I generally did not use the

mileage deduction, but did run all my other expenses through the

reimbursement program. Meals are only 50% deductible on your 1040. If

you run them through your expense system, you can essentially get

reimbursed fully using pre-tax $'s for all meal expenditures.



The mileage deduction is easiest to be taken on your 1040, IMHO. Also,

for some people who are subject to AMT, you will find that the expense

reimbursement will also allow for the full deduction of your expenses

without the deduction having to be taken on your 1040... if you are

subject to AMT, your deductions are phased out and may not be taken at

all.



My plan was to take the tougher deductions (meals, gifts, computer

expenses) on through my reimbursement plan, with the easier deductions

(mileage) taken through my 1040.



Just one way to do it, but a worthwile consideration.



Good luck.



C