Tax Strategies for Business Owners

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ABA Tax Accounting | Tax Strategies for Business Owners

Entertainment Expenses: Maximizing the Tax Benefits

Tax Strategies for Business Owners

Entertainment Expenses - There are limits and restrictions on deducting meal and entertainment expenses. Most are deductible at 50%, there are a few exceptions. Meals and entertainment must be "ordinary and necessary" and not "lavish or extravagant" and directly related to or associated with your business. They must also be substantiated. For employees who are "fully reimbursed", the limits are imposed on the employer, not the employee.

Your home is considered a place conducive to business. As such, entertaining at home may be deductible providing there was business intent and business was discussed. The amount of time that business was discussed does not matter. Likewise, if you hold a small party (less than 12 people) at your home and discuss business with your guests it may be deductible as well.

Reasonable costs for food and refreshments for year-end parties for employees, as well as sales seminars and presentations held at your home are 100% deductible.

If you rent a skybox or other private luxury box for more than one event, say for the season, at the same sports arena, you generally cannot deduct more than the price of a non-luxury box seat ticket. Count each game or other performance as one event. ). Deduction for those seats is then subject to the 50% entertainment expense limit.

If expenses for food and beverages are separately stated, you can deduct these expenses in addition to the amounts allowable for the skybox, subject to the requirements and limits that apply. The amounts separately stated for food and beverages must be reasonable.

Deductions are disallowed for depreciation and upkeep of "entertainment facilities"-yachts, hunting lodges, fishing camps, swimming pools, and tennis courts. Costs of entertainment provided at such facilities are deductible subject to entertainment expense limitations.

Dues paid to country clubs or to social or golf and athletic clubs are not deductible. Dues that you pay to professional and civic organizations are deductible as long as your membership has a business purpose. Such organizations include business leagues, trade associations, chambers of commerce, boards of trade, and real estate boards.

Tip: To avoid problems qualifying for a deduction for dues paid to professional or civic organizations, document the business reasons for the membership-the contacts you make and any income generated from the membership.

Entertainment costs, taxes, tips, cover charges, room rentals, maids and waiters are all subject to the 50% limit on entertainment deductions. For no obligation free consultation contact us today!

Amare Berhie, Tax Advisor

612-282-3200

866-936-0430 Toll Free

ABA Tax Accounting | Tax Problems | St. Paul, MN Accounting Firm

Like to get out from under your tax burden completely.

Bankruptcy - Your back taxes, interest and penalties can be wiped out by filing bankruptcy. If you qualify, bankruptcy can be the best solution to resolve your crushing tax problems.

Unfortunately, not everyone qualifies to wipe out their tax debt in bankruptcy. Certain rules have to be met first. If you file bankruptcy and don't meet the rules, the IRS will still be in hot pursuit after your bankruptcy is over. Proper pre-bankruptcy planning is key to determining if bankruptcy is or can be a viable solution. For no obligation free consultation contact us today!

Amare Berhie, Senior Tax Accountant

612-282-3200

866-936-0430 Toll free

ABA Tax Accounting | Tax Strategies for Business Owners | St. Paul, MN Accounting Firm

Wednesday, August 15, 2012

Travel Expenses: Maximizing the Tax Benefits

Travel Expenses - Tax law allows you to deduct two types of travel expenses related to your business, local and what the IRS calls "away from home".

First, local travel expenses. You can deduct local transportation expenses incurred for business purposes, for example the cost of getting from one location to another via public transportation, rental car, or your own automobile.

Second, you can deduct away from home travel expenses-including meals and incidentals; however, if your employer reimburses your travel expenses, your deductions are limited.

LOCAL TRANSPORTATION COSTS

The cost of local business transportation includes rail fare and bus fare, as well as the costs of using and maintaining an automobile used for business purposes. For those whose main place of business is their personal residence, business trips from the home office and back are considered deductible transportation and not non-deductible commuting.

AWAY FROM-HOME TRAVEL EXPENSES

You can deduct one-half of the cost of meals (50%) and all of the expenses of lodging incurred while traveling away from home. The IRS also allows you to deduct 100% of your transportation expenses--as long as business is the primary reason for your trip. For no obligation free consultation contact us today!

Amare Berhie, Tax Advisor

612-282-3200

866-936-0430 Toll Free

ABA Tax Accounting | Payroll | St. Paul, MN Accounting Firm

Outsource Payroll

Payroll - When it comes to paying employees, laws and the IRS have made the payroll function a time consuming nightmare for the small business owner.

Small business owners spend an average of eight hours a month performing payroll functions. That's 12 full days a year that could be spent generating sales, prospecting new business opportunities, improving products or services, or servicing customers.

We offer payroll solutions that meet your business's needs and enable you to spend time doing what you do best--running your company.

Why Outsource Your Payroll...

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It's a Time Saver - Our payroll service eliminates the burden of customizing, updating and maintaining your own payroll system--no more data entry, no more researching updates or new laws, no more worries.
Worry Free Payroll Tax Filing - Eliminate the risks of calculating and filing your own payroll taxes by having professionals do it for you. Federal, state and local payroll tax laws are frequently changing and becoming more complex. How much time do you want to spend learning all the rules and keeping your information up to date?
Allows You To Focus On Core Competencies - Our professional staff allows you to focus on the core competencies of your business. We are accounting professionals--you get the experts working for you and with you.
Comprehensive Reports - You get a wide variety of user-friendly and accurate payroll reports. For a nominal fee, we will include union reports, certified payroll, workers' compensation reports and much more.

For more information contact us to day.

Amare Berhie, Managing Member

612-282-3200

866-936-0430 Toll free