Save Money on Taxes - Let Uncle Sam Pay for Your Fun!
"Deducting Meals and Entertainment"
O. K. You've been working really hard on these lessons. Now its time for some fun. Are you with me? Imagine if you could spend time with friends, eating, drinking and seeing shows and your company could foot the bill? Wouldn't that be GREAT! Fasten your seat belt, we're going on a (tax-deductible) journey?
Well, if I have lunch or dinner with a friend, that's NOT tax deductible. But, if I discuss business with that same person, suddenly it becomes a deductible expense. And what does it take to officially discuss business? The IRS says that that the following conversation will suffice:
Your Associate: "How's Business?"
Your Reply: "Great, but I could always use more business" (with the inherent request for referrals) That's it. You've just turned a social gathering into a legitimate business meeting and the meal becomes 50% deductible. Don't forget to document it properly.
How about dinner and a show. Or what about a full day on the golf course? The rule is that if you have a business meeting that is followed by entertainment, or entertainment that is followed by a business meeting, that's a deductible expense. The IRS wants to see that you have a table or some other flat surface available to you during the meeting, so that you can sign documents, etc. Same thing goes for skiing, the movies or even a day at the beach. How about a ball game or even the Super Bowl? Just precede or follow it with a business meeting and document what you discussed.
One more, you say. Fine here it is. Imagine that you work for a large insurance company or law firm. You're involved in a big case and you're up against a touch deadline. Your boss comes in toward the end of the day and says, "I need you to work though dinner tonight - we've got to come in under that deadline. Don't go home for dinner, just order in, on the firm". Its called "supper money" In essence, your boss has allowed the company you work for to buy your dinner.
Your own company can do the same for you. Just don't forget to document your expenses properly.
Drew Miles, The Tax Saving Attorney
Drew has combined what he learned during formal education, informal education and twenty five years of business experience in the development of programs designed to teach people how to build and preserve lasting wealth. He is an author, teacher and international speaker in the areas of asset protection, and tax saving and wealth building strategies.