Deductions For Business Owners
Business owners, big or small, have probably made plans to send cards to their clients, give gifts to their employees, and possibly throw a team-building part. You may have considered charitable donations from your company or other expenses to make the holidays more memorable. Some of these expenses are large and make a lasting impression on clients. For business reasons, you may be able to claim certain deductions.
Hidden Holiday Deductions
Some of these holiday deductions are less obvious. Other write-offs were hiding right under your nose. Rejoice in these possible hidden holiday deductions for business owners.
Gatherings
- Office holiday meals, parties, and events can be deducted from your taxes as they involve company morale. Hold your holiday meal at a restaurant for a 100% write-off. Grocery receipts usually only receive up to 50% write-offs. If this is for a party, it may count 100%
- Catered events and parties are 100% deductible if they are only for employees and their spouses. Friends and clients invited means you are only allowed a 50% deduction.
- Ensure your parties are not too seemingly lavish. Make a party within the financial means of your company. While no specific amount is specified, you don’t want your holiday party to exceed the glamour of your business. Champagne may not be appropriate cost-wise for a small bakery. Extravagant expenses are likely to raise red flags for the IRS.
- Invite all of your employees and document everything with your accountant.
Unpaid Items
Your tax accountant can deduct some bills and debts from your taxes. Here are some tips on finding those hidden holiday deductions in the form of bills and debts.
- If you owe money to clients, employees, or anything business related, you may be able to write off the debts on your tax refund. Loans may even count. Speak with your business tax accountant.
- Saving bills toward the end of December ensures you won’t receive money till next year. That will result in a tax write-off. While this seems counterintuitive, it helps you to balance your finances.
Time of Year Expenses
Expenses from the holidays are not only for parties. Gifts and other items may qualify.
- Gifts are anything given to your employees or clients. You can write off $25 per gift.
- Treats and decorations count as write-offs so long as they are not too extravagant. After all, extravagant write-offs would raise red flags. Who would want an audit?
- Advertisements are allowed deductions.
- Charitable donations are not allowed on business taxes, but you can transfer them to your account. Check out the IRS guidelines to determine the appropriate holiday deductions on business or personal taxes.
Speaking with your Accountant
Make sure you run expenses by a reliable and trusted accountant. You want an accountant with experience that has a good reputation in your community. Looking for an accountant is like looking for a lawyer. If you choose the wrong one, you will lose big time. Don’t get behind in your deductions. Contact a reliable tax accountant like Joe Franek. Don’t panic. Call Franek.