Accounting & Bookkeeping & Small Business Forum

[Badger2003]

Hello -

I'm going to be forming a staffing company in either Michigan or Colorado, which will start as a means for myself to be an independent contractor.

My company's first client, which is based in the UK, has a need for engineering assistance in Michigan. I live in Colorado, and will be doing much of the work from home there. I will be doing a bit of travel to both Michigan, and later Arizona to support this position.

What do I need to consider regarding bookkeeping of travel costs, and what I can deduct. If in the contract, I indicate that the job is based in Michigan, but supported remotely from Colorado, can I deduct expenses related to travel to Michigan as necessary? Same for Arizona?

If I do this, and I form the company in Colorado, do I need to register as a foreign entity in Michigan to complete this transaction?

Lots of grey areas with this one in this telecommuting age... Any guidance would be much appreciated!

Cheers, Badger

[Richard Noot]

Badger2003 wrote: Hello -

I'm going to be forming a staffing company in either Michigan or Colorado, which will start as a means for myself to be an independent contractor.

My company's first client, which is based in the UK, has a need for engineering assistance in Michigan. I live in Colorado, and will be doing much of the work from home there. I will be doing a bit of travel to both Michigan, and later Arizona to support this position.

What do I need to consider regarding bookkeeping of travel costs, and what I can deduct. If in the contract, I indicate that the job is based in Michigan, but supported remotely from Colorado, can I deduct expenses related to travel to Michigan as necessary? Same for Arizona?

If I do this, and I form the company in Colorado, do I need to register as a foreign entity in Michigan to complete this transaction?

Lots of grey areas with this one in this telecommuting age... Any guidance would be much appreciated!

Cheers, Badger You will have to determine what tour tax home is. This usually is determined by where most of the work is done and where most of the money is made. If this is determined to be your home office then you will need to setup an office in home. This will allow you to deduct your meals transportation and lodging expenses. Without an office in home your deductions including mileage would basically be zero.

[dp1903]

See this link:

http://www.irs.gov/publications/p463/ch01.html