Wednesday September 14, 2016
If you are wondering if Meals & Entertainment expenses can be deducted on taxes, the answer is a definite YES!
However, this only works if the expenses are protected and kept with proper documentation. What is proper documentation? Well, to further help you with the documentation process, below is a list of information which you have to take note on whenever you have a meal or entertainment expense to record.
- Amount of each separate expense
- Description of each separate expense
- Date of expense
- Location of expense
- Business Purpose of expense
- Name and business relationship of the people involved
This may seem like a lot of work for each expense however, one thing you can always count on during an audit is request for documentation supporting deductions for these expenses. The IRS has found that this is one of the most abused expenses and has generated a lot of additional revenue where an audit found a lack of appropriate documentation. Get a receipt and most of the information will already be on it. You will just need to write down who you met with and what was discussed. It is ok to write it on the receipt but others may want to take more detailed notes. Keep a notebook with you and take notes. Once you get back to your computer, scan the receipt. Receipts tend to fade over time and this way you will have a hard copy.