Dine and Deduct: Business Meal Taxes Explained
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- Опубліковано 15 чер 2024
- In this video I explain the business meals tax deduction. Specifically, I discuss:
Why the IRS even allows business owners to deduct meals…I think if you understand this concept, it will eliminate a lot of your questions about why is a meal deductible or not.
What meals are not deductible at all, what meals may be 50% deductible and what meals are 100% deductible.
What you should do in your bookkeeping software to keep track meals vs. entertainment.
What do you need to do for record keeping? Is having a receipt good enough?
What to avoid when deducting meals as a business expense?
What is “ordinary and necessary” as it relates to deducting meals for business?
I’ll wrap things up by giving you some tips and tricks such as how to deduct meals for your spouse, what to do if you split the bill with someone and a couple other helpful items so make sure you watch till the end or you’ll miss those important items.
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📒 Video Notes and Resources 📒
00:00 Topic: Deducting Business Meals
00:15 Questions I'll be answering
02:07 Why does the IRS allow business owners to deduct meals?
03:03 What meals are not deductible at all, what meals may be 50% deductible and what meals are 100% deductible?
03:13 Meals that are 0% deductible
04:02 Meals that are 50% deductible
05:06 Meals that are 100% deductible
06:05 Bookkeeping for business meals
07:04 Meals vs. Entertainment
08:00 What do you need to do for record keeping?
08:42 What is “ordinary and necessary” as it relates to deducting meals for business?
09:44 What to avoid when deducting meals as a business expense.
10:30 Tips, tricks and strategy
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This video was created for informational purposes and it is not to be construed as legal and tax advice specific to your unique situation. Some of the links above are affiliate links which means that if you purchase a product or service with the provided link, I may receive a commission with no additional cost to you.
© Navi Maraj CPA PLLC. All rights reserved.
#taxdeductions #taxstrategy #meals #foodie
Thank you Navi for the useful information! My girlfriend and I just started a business and we want to do most things right from the start. Your videos help out a lot!
You’re welcome! Glad I could help.
The sass made me subscribe... well done.
Thanku Navi sir, i just start my mobile welding business, your videos helps me a lot. I still have lots of questions in my mind but answering these questions after watching your each and every videos.
Subscribed and going to sign up for your tax training course tonight.
Outstanding!
Great video! I have always used Concur for my expenses while working for large companies. This helps a lot now that I am working for myself.
Thanks! I always hated doing my expense reports. You’re right though, once you start a business, keeping track of things can get overwhelming. Glad the video was helpful!
@@NaviMarajCPA Wish you were taking on new clients. :)
thank you for your videos !
You’re welcome Michael. Thanks for watching!
Hey Navi! Great video. One question: For the 100% meal deduction, is there a distinction between employees and founders?
What would be the deduction in the following scenarios where everyone is present:
- Company of 2 founders
- Company of 2 founders and 1 employee (would this be considered under 50% employees?)
Hi, how to track 50% vs 100% meal? Do I put it in different category? Thanks
Traveling to the next town over for a service related job which is like a 45 min drive would only be 50% then. Is there a specific distance from your office or an overnight stay requirement for travel meals?
This is good information! I am curious, though, about my specific situation. From what it sounded like, travel meals are only deductible when traveling out of town. I am a pet sitter who stays at other people's houses very often. I bring my own groceries and meals and occasionally dine out. My location is never more than 30 minutes' drive away from home. Does this mean I cannot deduct meals and groceries for while I am pet sitting?
Hello I love you videos great content. I was wondering if you could please help me out with a problem I am currently having. I recently spent too much of my saving on buying coins on ebay and I love them but I realized I spent too much money. My question is as long as I have a receipt of what I paid for the coin would I be able to sell it and if I didn't make money off of it would it not count as taxable income? Or income gain? I'm not sure I know your busy but If you could just give me an idea I would greatly appreciate it
How about the Per dime deductible?, is there any issue with that as a business expenses?
At around 5 minutes, you mention office snacks, coffee, water, ordering food for employees doing overtime, etc. What if you are your only employee and you work from a home office, would these expenses for just yourself still count as 50% deductible?
Thanks for watching and for the question.
No, if you are the only employee and you’re eating/drinking by yourself it is not tax deductible. The exception would be if you are traveling away on business. In that scenario, you could deduct a meal by yourself.
@@NaviMarajCPA Ok thanks :) Love your channel!
Thanks for the info! What about RESTAURANT MEALS during international business travel for tax year 2022? I made a few short international business trips last year. Are they 100% deductible because of the special meal rule during COVID? Or does that only apply in the U.S. territories?
My thought is they are 100% deductible. I understand why you have that question though. Sometimes we (myself included) overthink things.
@@NaviMarajCPA I apologize for asking the question. I thought the rules were different for that type of meal last year due to the fact that international travel is deducted differently than travel in the U.S.. For example, I'm able to deduct the whole international business trip if the trip is 7 days or less.
Thanks Navi! You are awesome!!
What If i travel to Europe for 3-6 months, are all my meals deductible the while time? Is there a limit? How do I know what the limit is? Is it only meals? What about hotel & travel?
I am a vendor. I know i can deduct out travel meals, what about meals where I can not leave the facility (eat on site) or bring my own food while at my booth as I can not leave?
If you are alone but having a meal during a business call (or a business call with your meal), can you deduct it 50% ? I notice this happens a lot with tradesman. Thanks.
What if you buy someone lunch in exchange for them helping you on a rental property (providing labor) Complete a task? Is it 100% deductible?
You should also be able to have as many real business meals with your spouse as you want and get taxed accordingly
If you are a realtor, going to showing, inspections, walk throughs, meeting new clients, etc. and you swing through a drive thru for yourself, are you able to write off 100% of my meal?
I had a question, I am at 10:99 contractor and I am running my finances through my personal LLC in the state of South Carolina. I do landscaping work and need beverages to help keep me hydrated in the hot weather. I’ve been buying it with my business card because that’s what I use it for, would that be considered 50%?
This is a great question and to be honest I’m not 100% sure. Staying hydrated by purchasing water etc. seems like an ordinary and necessary business expense given the type of business you have. I’m leaning towards it being 50% deductible and you might be able to make the case that it is 100% deductible.
Thank you kindly sir, we do have a CPA we work with but it’s always good to hear a second opinion.
I am a Uber driver is my meals 100% when I am on the road?
what form is this?
Is it possible to set up a Dependent Care FSA as a 1099 Sole Member LLC? I can't set up a Healthcare FSA because my health insurance is through my husband's work, but I would like to figure out how to figure out a Dependent Care FSA to pay for daycare expenses since it would be a greater tax savings than the child care credit. I just can't figure out how, or if I'm allowed to do so without being an Scorp
For the sake of saving time, I would like to say I'm not already a Scorp bc I live in Tennessee.
What about if my client pays for the meal and I pay the tip. Can I deduct the tip that I pay?
Tips are included as part of the meals expense so, in my opinion, you could deduct the tip. The deductibility of the tip (0%, 50%, or 100%) would follow the same rules of the meal itself.
@@NaviMarajCPA Great! That clarified a lot for me. I truly appreciate!
i am a truck driver is my meals 50% or 100% when i am on the road
Truck drivers have a special set of rules so best to speak with a tax pro that understands them. I’m not super familiar with it. Check this link: turbotax.intuit.com/tax-tips/self-employment-taxes/what-you-need-to-know-about-truck-driver-tax-deductions/amp/L68YC61fS#article_header_1
Hey Navi, my wife and I are starting a venture together should we start a MM LLC or a single LLC. Also she has an EIN and a Tax Sales permit two years ago. Now that we are getting in business together should she dissolve her original EIN and Tax Permit for a new one under our LLC or should keep them? Thanks
Doesn't sound right. No matter your job. You should have whatever kind of meal want and get Taxed accordingly if it was $5 or $500
Hey there! Are your comments questions or are you just giving your opinion that you don’t like the IRS rules?
$200 isn’t much anymore.