Business deductions are very tricky to decipher, and what can cause even more inaccurate reporting, is a lack of or simply inadequate, records.
It’s your business and knowing the guidelines will help you prepare your budget and make decisions for your success. While you can’t change the history of last year, these tips will help you determine what is the best use of business expenses and assist you when reviewing your bookkeeping records now and for years to come.
When it comes to travel, the guidelines are bit different than some other business deductions.
- Business travel is fully deductible. Expenses for business Travel & Entertainment (T & E) must meet some tests, in order to be deductible.
- Incurred in business by the taxpayer
- Ordinary and necessary to your business
- Serve a clear business purpose
- Be directly related to the active conduct of the business
- Some travel deductions can include:
- Travel by air, bus, taxi, train, or vehicle
- Lodging expenses
- Baggage charges
- Cleaning and laundry expenses incurred and necessary during travel
- Temporary labor costs that take place during the business travel, for example, an assistant or additional service to handle communication
- Reasonable tips
- Extra expense to transport display materials or samples
- Meals and Entertainment (M & E) are only partially deductible. There are also guidelines for the deduction to be allowed.
- Entertainment is no longer deductible (this is accurate as of date of publication).
- There must be someone in direct representation of the company, present and involved during business M & E.
- There must have been a substantial business discussion directly before, during or after the meal.
- Accurately documenting your calendar and/or a documented receipt, in order to verify the details of the discussion, as well as others involved in the conversation and the topic, is effective tool for reference should you need it.
- Some Meal deductions can include;
- Food, beverage, taxes and tips
- Meals on business travel
- Meals furnished to employees at the place of business
- Transportation to and from the restaurant or location of meal
This expense category is one of the most questioned and misunderstood. It is very common to have the discussion with our clients regarding what is or isn’t deductible. We give some of these basic guidelines but ultimately, we direct them to discuss this with their CPA or tax advisor. The bottom line is, just because you believe something is deductible, doesn’t mean it is the best use of your company funds and time. Surround yourself with trusted expert advisors who provide the services you need. Plan your budget at the beginning of the year, using direction and guidelines from your entrusted experts. Tax deductions change. Stay knowledgeable and keep accurate and timely records, for the best success for your business.
A little more about us:
We guide, assist and manage your bookkeeping operations, customizing our service to fit within your needs, budget and timeframe.
Providing daily, weekly, monthly or occasional BOOKKEEPING SERVICES. We assist to the degree that meets your needs and your budget. We provide you with a clear picture of your finances.
- Handling A/P and A/R entries, monthly financial reports, yearly audit assistance, state banking regulation audits, payroll processing, sales tax filing, and developing and implementing work-flow systems to ensure documentation requirements are accurate and complete.
- Creating the foundation for a cost-effective accounting system for NEW BUSINESSES, and those working to get more established, then providing customized, agreed-upon bookkeeping services contracting with clients for a clear understanding of the services to be provided.
- SCRUTINIZING existing financials to determine more timely, accurate and EFFICIENT bookkeeping options.
- Training of bookkeeping personnel in QUICKBOOKS as a Certified ProAdvisor.
Examining financials to provide DECISION-MAKING INFORMATION regarding financial department personnel needs, resources and timing for product and service expansion, financial strategies for real estate or asset purchases, etc.
MANAGING your books in a way that allows YOU to do what YOU DO BEST, sell your product or provide your services, while staying as involved in the bookkeeping as needed for proper management of your financials.
CONSULTING on-call for client financial questions.
OrganizerForU offers a 20- to 30-minute complementary phone consultation. We value your time and we know that time efficiency is cost effective. During our call, we listen as you describe the current financial situation of your business, asking the right questions to determine how our services can meet your needs. We take time to briefly explain how our services are provided, to ensure we are a good fit for your needs and situation.