Business Meals Archives

How to Maximize Your Business Meal Tax Deductions

By Office Staff|2025-03-12T16:07:08-07:00March 12, 2025|Categories: Business Advice|Tags: Business Meals|0 Comments

When it comes to business-related tax deductions, one of the most confusing areas is whether business owners can deduct the cost of their own meals on their next tax filing. Only questions about auto expenses are more frequent, and we covered that issue in our last post (Maximizing Your Business Auto Deductions).

But with meal tax deductions, we’ve been asked about it so often that we’re starting to wonder if people are running businesses or just looking for a way to expense their sushi habit!

In most cases, the U.S. Federal Tax Code allows businesses (including small businesses and the self-employed) to deduct 50 percent of the cost of meals directly related to business activities. These include meals with clients, business partners, and so on for business-related purposes.

However, in some cases, businesses are allowed to deduct 100 percent of the cost of a business meal and beverages. If you’re not taking advantage of these exceptions to the rule, you’re just leaving money on the restaurant table.

In this post, we review the basic rules and then highlight the notable exceptions that can save you money.

IRS Rules for Deducting Meal and Entertainment Expenses

Generally, the following rules apply to tax deductions for business meals and entertainment: Continue reading… Continue reading… Continue reading…

Year-End Tax-Savings Tips for Small-Business Owners and Entrepreneurs

By Office Staff|2022-11-09T16:58:58-08:00November 9, 2022|Categories: Business Taxes|Tags: Bonus Depreciation, Business Meals, Retirement Accounts|1 Comment

Here at SWC, we’re currently meeting with clients to project what they’re likely to owe in 2022 and discuss ways that they can reduce their tax liability for this year and beyond. In preparation for these meetings, it’s always a good idea for clients to start thinking about steps they can take to lower their upcoming tax bill.

Last week, we presented 6 Personal Tax Savings Steps for Individuals to Take Now — Before End of Year 2022. This week, we turn our attention to tax-savings tips for small-business owners and entrepreneurs.

With only about two months remaining in 2022, time is quickly running out to take advantage of a few attractive tax deductions/credits available only to business owners and entrepreneurs. If you’re planning to delay taking on certain expenses until 2023, you may want to reconsider your approach after reading this post. Some deductions/credits may not be available in 2023, or they may be significantly reduced.

Take advantage now of larger deductions for business meals.

There are four steps that — if you take now — could result in considerable tax savings.

Step 1: Maximize your retirement plan contributions.

If your business already has a retirement plan, consider maximizing tax-deductible contributions before the end of the year. If your business doesn’t have a retirement plan, now’s a good time to consider starting one. With a retirement plan in place, you can make tax-deductible contributions to the plan that grow tax-free until the funds are withdrawn. A retirement plan is a great way for you and your employees to build wealth while reducing your tax burden.

You can set up various types of retirement plans, including the following: Continue reading… Continue reading… Continue reading…

2021 Year-End Tax-planning Tips for Business Owners

By Office Staff|2021-12-08T14:55:45-08:00November 23, 2021|Categories: Taxes|Tags: American Rescue Plan Act, Build Back Better, Business Meals, Business Taxes, Cryptocurrency, Employee Retention Credit, SBA, Work Opportunity Tax Credit|0 Comments

As we covered in “2021 Year-End Tax-Planning Tips for Individuals,” what you do this year can make a big difference in how much you pay in state and federal tax next year. And perhaps more important if you’re a business owner, it can impact your net worth for decades to come.

Because it stands to reason the more you save on taxes, the more money you have to invest in your businesses and your own future.

Paying attention to tax rules and regulations and how they impact your business finances has become especially important in recent years with the flurry of changes in response to the global pandemic and its economic impact, major shifts in government policies (and spending), business slowdowns and shutdowns, and more.

In this environment of disruption and uncertainty, having a well-thought-out tax plan in place enables you to minimize your obligations while using your tax savings to protect and grow your business and personal wealth.

Here at SWC, we encourage business owners to schedule a year-end tax planning and financial strategy session with your CPA. And if you are a business client of ours, you already know that we can help you reassess your business taxes and finances, adjust your plan to optimize outcomes, and take any year-end steps that can save the business money and protect and grow your personal net worth.

In the meantime, whether you’re a client of ours or you work with another firm, here’s a look at some tax issues for business owners to consider as you approach year-end 2021: Continue reading… Continue reading… Continue reading…

Deducting the Costs of Business Meals, Entertainment, and Gifts, Part 10: Small Business Guide to Reducing Your Tax Burden Legally

By Office Staff|2020-10-08T20:45:15-07:00October 8, 2020|Categories: Small Business Guide to Legally Reducing Your Tax Burden|Tags: Business Gifts, Business Meals, Entertainment|0 Comments

As a small-business owner, you know that you can easily rack up a considerable amount in expenses over the course of the year dining with and entertaining clients, colleagues, and partners. Then there’s hosting “free” seminars or presentations for prospective clients. And feeding your employees (for example, donuts and coffee for a morning meeting or pizza and soft drinks for a team that’s working overtime on a project). You may even have additional expenses related to gifts presented to customers and vendors to show your appreciation for their business and efforts on your behalf.

All this is money leaving the business and not going into your pocket, so it should be deductible, right? Yes, it is, but just how deductible it is depends on the context in which that money is spent and who received the benefit.

In this post — No. 10 of 12 in our Small Business Guide to Reducing Your Tax Burden Legally series — we break down business deductions for meals, entertainment, and gifts, to ensure that you’re taking full advantage of what the government allows, taking care to not do something that may prompt the government to question any of your deductions.

Deducting the Cost of Meals Out

If you’re in a business such as management consulting, marketing services, insurance, or personal finances, you likely spend considerable time meeting with clients over lunch, coffee, or drinks. In other businesses, you may meet with partners or colleagues to discuss plans for business ventures or projects you’re currently working on together. As long as meals you pay for under either of those scenarios are for a legitimate business purpose — with existing clients, new business prospects, and business colleagues such as vendors you work with — they’re deductible.

Costs for business meals (food and beverage) are generally deductible up to 50 percent, but expenses must meet the following conditions: Continue reading… Continue reading… Continue reading…

Understanding Small-Business Tax Deductions

By Laura Stees, CPA|2020-04-15T15:45:42-07:00April 15, 2020|Categories: Taxes|Tags: Bank Fees, Business Insurance, Business Meals, Depreciation, Home Office Expense, Legal Fees, Moving Expenses, Standard Mileage Rate, Tax Cuts and Jobs Act, Tax Deductions, Travel Expenses, Write-offs|0 Comments

As part of an effort to mitigate the effects of the spread of the coronavirus known as COVID-19, the Internal Revenue Services has chosen to delay the April 15, 2020 tax filing deadline for most individual taxpayers and businesses to July 15, 2020. Regardless of the deadline, one thing that isn’t expected to change anytime soon is what a business can and cannot claim as a tax deduction. And in today’s post, we offer insight into exactly that — what small businesses can and cannot deduct, regardless of the tax filing deadline.

A deduction (or write-off) is an expense or portion of an expense subtracted from your company’s gross income that reduces the income on which taxes are calculated. Every dollar you claim as a deduction is a dollar less that is subject to federal, state, and local income tax and self-employment tax (Social Security and Medicare).

For example, if your effective federal income tax rate is 25 percent, and you pay 15.3 percent in self-employment tax and 5 percent in state and local income tax, every thousand dollars less you report in taxable income is over 450 dollars you save in taxes: (0.25 + 0.153 + 0.05) x $1,000 = 0.453 x $1,000 = $453.

The Tax Cuts and Jobs Act (TCJA), which became effective in 2018, made it less advantageous for taxpayers to itemize personal deductions. However, if you own a small business — such as a sole-proprietorship, limited liability company (LLC), or partnership — you can deduct a broad range of business expenses to lower the taxable income you earn from that business.

Here are a couple tips for claiming business deductions without getting into legal trouble:

Seek confirmation from a tax specialist or certified public accountant (CPA) before claiming any business expense as a deduction.
Keep accurate, detailed records, including invoices and receipts for all business expenses. (Your CPA can help you find accounting packages and apps to simplify your record-keeping.)

In the following sections, we present a long list of common small-business tax deductions. Continue reading… Continue reading… Continue reading…