How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Megan C Your Own Question
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16580
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
23669918
Type Your Tax Question Here...
Megan C is online now
A new question is answered every 9 seconds

I have a client who was advised since he travels so much (merchant

This answer was rated:

I have a client who was advised since he travels so much (merchant seaman) that he could either file as an independent contractor with his company or file travel expenses in a stand-alone entity. He has two organizations and three different EIN's. I am trying to make heads or tails of this. He stated he created the "travel company" to deduct his travel expenses. I recently obtained this client for bookkeeping and tax preparation and think I got more than I bargained for. I am looking for some advice on why my client would have been consulted to do that. Am I missing something here? My understanding is any unreimbursed travel expenses can be deducted on personal return or as a business expense if self-employed.

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

you are correct...you can deduct travel expenses as unreimbursed employee expenses on a personal return or as a business return as an ordinary expense. I do not know why he would be advised to open a company simply for the ability to deduct travel expenses. This sounds incorrect to me.

Customer:

Okay, I wanted to make sure that i didnt miss something. If this is the only explaination the prior accountant explained to him, then am sure that he was just following there counsel. He has not filed any returns under the two ein's that he created. I will send a request to have them closed. I will focus on the one corporation that has actual activity in and allocate the expenses between the 1040 for his employment that he is W2'd for and his food carts that he has properly incorporated

Customer:

* I am

MyVirtualCPA :

Sounds good. I don't know why you would have a separate entity for expenses. Sorry for any inconvenience

MyVirtualCPA :

Is there anything else you need assistance with?

Customer:

No, that was the only thing stumping me with this client. I think i will us this service for advice.

Customer:

Thanks have a good one

MyVirtualCPA :

You too. Please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

Is ther a way to get u again

Customer:

*there

MyVirtualCPA :

Yes, you can request me directly by putting "for MyVirtualCPA" in the subject of your question.

Customer:

aww man great!

Customer:

Now i can finish working and enjoy my weekend knowing im on the right tract

Customer:

nite nite

MyVirtualCPA :

If you would, please rate my response as "excellent'

MyVirtualCPA :

So that I may receive credit for assisting you today

Megan C and 2 other Tax Specialists are ready to help you