Category Archives: Miscellaneous

What can my business deduct?

Is it ordinary and necessary?  The IRS hasn’t issued a comprehensive list specifying what  is deductible.  The general rule is that if the expenditure ordinary and necessary and not addressed in some other context it is an acceptable business deduction.

More info here:  https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses

Some specific limitations, reductions, and non-deductible expenses do exist so if something seems questionable, talk to your CPA.

Here are a few costs asked about frequently:

Deductible:

  • Business Insurance
  • Mileage or Actual Expenses (ask your accountant)
  • Business Meals (50% Deductible)
  • Business Travel (with some rules)
  • Website Costs
  • Business Assets (stuff you aren’t reselling and plan to use for more than 1 year – computers, cameras, equipment etc. via depreciation)
  • Software Subscriptions
  • Licenses
  • Business Insurance
  • Office Supplies
  • Small Tools
  • Client Gifts (Up to $25…worth a discussion with your advisor)
  • Office or Business Rent
  • Bridge Tolls

Not Deductible:

  • Non-Uniform Clothing (sorry no suits, ties, dress shoes, dresses, etc. even if it is to “look nice for client meetings”).
  • Life Insurance
  • Entertainment (Thanks TCJA…)
    • Sporting Event Tickets
    • Fishing Trips
    • Etc.
  • Vacation Travel
  • Traffic Tickets
  • Club Dues
  • Commuting Costs

Maximize the Virtual Meeting

We use virtual meetings regularly.  Some tasks, training, & topics actually work better virtually.  This type of structure can save drive time or allow us to work with clients easily who may be across the country.

Most of these tips have become part of our regular operations already, maybe they could improve the way you work?

Better virtual meetings
Tips can help far-flung participants interact successfully.

 

2018 YEAR END TIP: Break Out Meals From Entertainment

Many businesses historically have lumped “Meals & Entertainment” into one account because they were both subject to the 50% limitation.  In fact, until 2018 they actually went on the same line of most business tax returns.
We finally have some clarity from the IRS on the TCJA changes (see our post from October 3) so it’s time to get those two split apart if you haven’t already. Make sure your bookkeeper has categorized these separately before you hand your 2018 data to your tax preparer.
 
  • Business Meals are now 50% deductible 
    • Examples include: meals, coffee, drinks with prospective clients, existing clients, suppliers, etc.  (more detail here)
  • Business Entertainment is now non-deductible
    • Examples include:  sporting event tickets, sporting event boxes,  concerts, go-karting, laser tag, etc.

J of A Podcast: Why our passions are essential…

Don’t worry!  Even though this podcast was done by the Journal of Accountancy it is not accounting specific and I can almost guarantee you won’t glaze over.  John Garrett articulates this concept so well.  It is absolutely worth your 30 minutes,  to listen use the link below or find the episode on iTunes here.

Why our passions are essential to work success
John Garrett, a former accountant and stand-up comedian, speaks on how being energized by our outside interests can energize us at work.