The value of the benefit should not be the normal fare for the class of travel, but rather a discounted rate because of the numerous restrictions on these flights. Know that transportation passes can be tax-free. If you're an employee of a transportation company, travel passes could be tax-free. Employees of bus and rail companies will not be taxed on passes received. And if you're a retired employee of any transportation company, all passes will be tax-free.
Business owners have it made.
Businesses are allowed to deduct any reasonable costs incurred for the purpose of earning income from the business, including travel costs. These costs include air or train fares, automobile expenses, taxis or rental cars, accommodation and meals. Don't forget that only 50 per cent of dining and entertainment expenses are deductible. And in the case of convention expenses, your business can deduct the costs of attending only two conventions related to your business each year. Tim Cestnick is president of The WaterStreet Group, and Suzanne Schultz is a senior tax manager for the company.