This time of year we’re all a little stressed trying to get our final accounting for the year calculated. And, as a result, many people miss a couple of tax breaks that can add up to big deductions, if you do the accounting right. Here are two breaks you don’t want to miss.
If you travel for business, the cost of your travel and the hotel is lodging, not entertainment. If you categorize the deduction as entertainment, you’re going to get a 50% reduction in the amount of hte deduction. Code it instead as lodging and you’ll get a 100% deduction.
If you furnish food for a meeting, it’s a 100% deduction. If it’s a meal out for business, it’s a 50% deduction. So, a weekly management meeting catered by a local restaurant is a 100% deduction, but going out to lunch with your accountant is just 50%. (Instead invite your accountant to the dinner. I happen to like anything that goes with with a dry red wine.)
If you bring in coffee and bagels (or in our case, pan dulce and tamales) for Friday morning meetings, they are also 100% deductible. Code it to meetings, not meals.
Chances are your tax preparer won’t have time to run through item by item with you during this busy time. Take a second and go through it yourself with your bookkeeper. You could save a lot of money in the process.