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Confused about business travel tax deductions? Take a look at these four examples to see what you can and can't deduct

by , 04 June 2014
If you carry on business as a sole proprietor, partnership, company or close corporation, and use a vehicle for business purposes, you can deduct the business expense in terms of the general deduction formula.

In other words, you can deduct any expenditure and loss you incur in the production of income for your business, as long as it's not of a capital nature (Section 11(a) of the Income Tax Act).

Since this is a bit tricky, use the following four examples as a guide if you're not sure when you can and can't make business travel tax deductions.

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Four examples that show when you can and can't make business travel tax deductions

Example 1: Travel to and from your home and your business or office isn't business travel. This means SARS won't allow you to make this deduction.

Example 2: The Practical Tax Loose Leaf Service says traveling from home to your rental property, from which you derive rental income, to supervise repairs isn't business travel. You also can't make a deduction.

But, if you travel to do the repairs, it's business travel and you can make a deduction.

Example 3: If your office is in your home, travelling from home to clients is business travel. You can make a deduction because your home is the 'base' from which you carry out your business.

Here's one more example for you if you're still not sure about business travel tax deductions

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One business travel tax deduction example

Example 4: If your company director travels between different places to attend directors' meetings, SARS won't allow him to deduct the expenses he incurs from the directors' fees he gets.

But, he can qualify for a business travel deduction against the travel allowance you give him.

We hope these examples have made things clear regarding business travel tax deductions. Make sure you comply now that you know what you can and can't deduct.
 

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