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4 Ways to Make Sure Your Meals are Tax Deductible

As a small business owner, we want to make sure you get ALL the business deductions you’re entitled to so that you KEEP MORE MONEY IN THE BANK! 

Meals are a fantastic deduction allowed to you AND 100% of your business meals are tax deductible in 2021 (instead of the usual 50%) so let’s make sure you are taking full advantage and know exactly what to ask your tax advisor in your mid-year check-in with them! 

There are four general types of meal expenses that you, as a business owner can use to create a tax deduction.

1. Business meals 

Business meals – you can deduct 100% (2021) of your bill when dining out with a business partner, client, vendor, colleague, employee or even a potential client when discussing business. I love this deduction and use it all the time. 

My favorite is dining with colleagues to bounce ideas and strategy off of. I get a deduction while helping my business make more money. And right now is a great time to help local restaurants recover from a tough year. 

Remember to always follow the rules and keep documentation 🙂


2. Meals on business trips

All meals when traveling for business are deductible, even when you’re eating by yourself. 

A great way to save money on your taxes is to turn your trips and vacations into business trips. Ask your tax strategist, “How can I turn these planned vacations into business trips?” This allows you to create deductions out of what you were already doing…Saving you thousands of dollars!!


3. Food during events in the workplace

When you bring food into your office for training, meetings, or presentations it is a tax deduction. Bringing meals into your office increases productivity and efficiency. Creating a win-win for you and your employees!

4. Tax allowance for dinner when working overtime

When there’s overtime work and you give your employees let’s say $50 for dinner you get a 100% deduction. Plus it’s tax-free for the employees.

 

Now that you have an idea of what is deductible, it’s time to make sure you are keeping all the documentation you need to keep your meal deductions…

  • Keep good records of your meals expenses.
  • Write on the receipt – who you were with and the purpose of the expense.
  • Take a picture of the receipt and upload it to a folder or accounting software for tracking. 
  • Keep bank statements or credit card statements to back up your receipts. 

Bottom line is, food or meals, whether it’s consumed at a restaurant, a business event or just at your office, can add up to A LOT MORE DOLLARS in your bank account, if done correctly. 

When deducting meals or any business deduction there are rules to follow. Always talk to your tax strategist to save the most money possible, maximize the strategy and get things set-up properly!  

Right now my team is taking tax strategy calls. Saving clients thousands of dollars – Book Your Tax Strategy Call TODAY!

 

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Questions Your Small Business Tax Accountant Should Be Asking You

Want to know if you have a solid small business tax accountant? Pay attention to the questions they are asking you. The last thing you want is to be a one-and-done client. When a tax accountant asks you thorough questions, it shows they care about your financial well-being and that they want to help guide you toward your best financial future.  Below, I have put together a list of key questions to listen for in the next meeting with your accountant so you can make sure you’re in the right hands.

1. Tell me about yourself.

I know this seems obvious, but this is actually way overlooked. Your small business tax accountant’s expressed interest in who you are reflects their genuine care and commitment toward you. Your small business tax accountant should be making genuine efforts to build rapport and trust. This means getting to know you beyond just your financial books.

2. How can I best support you?

The first conversation you have with your small business tax accountant should really be about how they can best serve you. Rather than them providing a laundry list of what they specialize in, they should be keen to know what you are specifically looking for. From there, evaluate how they respond to meet your unique needs. What really sets a small business tax accountant apart from the rest is how devoted they are to adjusting and molding their skills and services to fit your needs.

3. What are your biggest, wildest goals?

Now is the time to discuss your wildest goals and dreams. Your small business tax accountant should support you in refining your goals into ones that are stretchy yet attainable. They should also be interested in more than just your financial goals and be asking you about your larger life vision. This is huge in creating a financial business plan that supports the lifestyle you desire.  They should show compassion for not only your current life vision but your retired life as well.  Exploring your plans and helping you create a pre retirement checklist will set you up for the future of your dreams.

4. What is your biggest financial block?

You know you’ve hit the jackpot in finding a small business tax accountant if you hear this question, as it tends to be forgotten. Financial blocks encompass much more than your cash flow, financial status, investments and retirement. It is also important to address your internal blocks and any limiting beliefs you have so that you can begin to create good money habits that support you. A major role of of your accountant is to make you feel comfortable opening up about these blocks, identify how they are limiting you and create new strategies and solutions. Their goal should be to have you feeling at ease and confident about the decisions you are making for your business.

5. Can you provide your personal finance records?

A successful business is built on proper and efficient bookkeeping. A small business tax accountant should be searching for every way to help you reduce taxes and debt, including your personal finances. Many tax accountants only ask for business books, which does not provide the whole picture. Many times expenses that are typically considered personal can be converted into business expenses, greatly reducing your taxes. Also, it’s not safe to assume your current numbers are correct. It is crucial that your business finance coach is asking for additional records to verify that your numbers match up and make sense.

The bottom line is that you don’t take your chosen engagement with a small business accountant lightly. Pay attention to the questions they ask and how safe you feel with them. During the conversation, make sure to integrate questions for the money coach as well. I hope that my tips are helpful to you. If you have any questions, please leave them in the comments below.