BOOKENDS is By The Books’ deeper dive into our social media posts. Message, email or call us with suggestions or questions you’d like to have answers to.
February 18, 2019
TRUE OR FALSE: I’m taking a potential client to dinner and should be able to expense the meal.
TRUE…actually that’s a half truth. As we mentioned in our February 13th post, you can expense 50% of dining out. It must be an ordinary dinner and a necessary business expense. The meal cannot be lavish or extravagant. The receipt will already contain the location and date, but you should write on the receipt the names of all those that attended and a very brief description of the topic discussed. That good buddy of yours, who is also a client, doesn’t qualify if the discussion will likely revolve around how to best dress out the new deer camp.
February 13, 2019
TRUE OR FALSE: I want to take a couple of clients to a ball game. I should be able to write off the cost as entertainment.
False. Beginning with the current tax filing season, the new regulations don’t allow for any deductions for entertainment. The tickets to the game are all on you, but if you buy food at the game, pay for it separately. You can expense 50% of the food cost. We’ll go a little deeper into food deductions in next Monday’s post.
February 11, 2019
TRUE OR FALSE: I should be able to expense any new equipment I might decide to buy.
True. Anything that you buy for your business can either be immediately expensed or can be capitalized (expensed over time). You can immediately expense things that will last less than one year. You must capitalize things that will last longer than one year. Capitalizing is also referred to as depreciating or amortizing. The rules for this can be complicated and confusing, so if you need answers, we’re happy to help clear the air. Please give us a shout via social media, email or phone.
February 7, 2019
TRUE OR FALSE: Because I have my office in my home, I should be able to expense my home the same way I would any other business location.
False. Home office deduction rules say that in order to be able to deduct any portion of your home, your business office must be an entire room and that room cannot have any other function. For example that room cannot also be the guest bedroom. If you have met that requirement, then you can deduct a percentage of your home expenses, such as insurance and utilities. That percentage is calculated by dividing the square footage of that room by the square footage of the entire house.
February 4, 2019
TRUE OR FALSE: I should be able to write off my personal vehicle because it has signage for my business on it.
False. You can expense the cost of the signage as advertising, but having the sign on the vehicle does not instantly turn your personally owned vehicle into a 100% deductible business vehicle. Think about it this way, if buy a sign to go on the side of city bus, the cost of the sign is just advertising expense; you don’t get to deduct the costs of the city bus. A sign for advertising is just a sign for advertising regardless of the location of the sign. As a side note, the 2019 milage rate is $.58 per mile.