Travel Expenses, Meals And Entertainment, Educational Expenses (LO 3.4, 3.5, 3.6)

Bob is a self-employed lawyer and is required to take a week of continuing legal education every year to maintain his license. This year he paid $1,295 in course fees for his continuing legal education in a different city. He also paid $467 for airfare and a hotel room and paid $250 for meals, all of which were provided by the hotels restaurant. Bob also purchased a $6 bag of snacks from a newsstand while waiting for his plane in the airport because he missed lunch.

What is the total amount he can deduct on his Schedule C related to these expenses? $fill in the blank 1

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Travel expenses are defined as ordinary and necessary expenses incurred in traveling away from home in pursuit of the taxpayer's trade or business. These expenses are deductible as long as they can be substantiated and are not lavish or extravagant. Expenses included as part of the travel deduction include the cost of such items as meals, lodging, taxis, tips, and laundry. Most travel expenses are fully deductible, but Congress decided that a portion of the cost of meals is a personal expense. Therefore, only 100 percent of the cost of meals is deductible.

There are two tests related to the deduction of educational expenses, at least one of which must be met to deduct the expenses. Educational expenses are not deductible, even if one of the tests is met, if (1) the education is required to meet the minimum requirements for the taxpayer's current job, or (2) the education is part of a program that will lead to a new trade or business even if the taxpayer does not intend to enter that new trade or business.