Question

In: Accounting

Robert is an independent contractor who lives and works in Philadelphia, PA. Robert rarely travels out-of-town...

Robert is an independent contractor who lives and works in Philadelphia, PA. Robert rarely travels out-of-town but travels extensively in the Philadelphia area meeting with customers. He is home every evening after work. Is Robert permitted to deduct any of the expenses below?

          Automobile expenses (not including commuting expenses) $2,470

          Automobile expenses for commuting to his office $620

          Business lunches with his customers $580

          Lunch by himself in Philadelphia $750

Solutions

Expert Solution

As per the philaelphia deprtment of finance several business expenses are not allowed-

1. Expenses based on federal per-diem allowance.

2. Public transport cost

3. Commuting expenses

a) between different jobs for different emploees

b) cost to drive a vehicle between your home and main work location

and if someone earn fixed milage allownce or a per- diem allowance or ur employer reimbursed exact amount of expenses than also not allowed in excess.

For meal you have to submit proper proof like bills of meal or that the lunch is for business purpose only then allowable (and only business meals allowed) there is a law in this country that is employees dont take leave for lunch etc employers paid them for that period also.

computation of allowable expenses to Mr. Robert

Particular Amount (in $) Remarks, if any
Automobile expenses (not including commuting expenses) 2470 allowed as for business purpose only proof of expenses needs to produce like bills of fuel etc)
Automobile expenses for commuting to his office - not allowed as commuting expenses not allowable
Business lunch with his customers 580 Allowable only need to produce bills and also proof that lunch is for business purpose
Lunch by himself in philadelphia Not allowable
Total 3050

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