Tax identity theft may seem like a problem only for individual taxpayers. But, according to the IRS, increasingly businesses are also becoming victims. And identity thieves have become more sophisticated, knowing filing practices, the tax code and the best ways to get valuable data.
The IRS Issued New Guidance on Business Expense Deductions for Meals and Entertainment
For the last ten months, interpretation of the 2017 TCJA tax reform was that business meals weren't deductible if a taxpayer (or employee) was dining with a customer. This was a radical change to prior rules. Fortunately, the IRS issued recent guidance on this topic and we're all breathing a sigh of relief.
IRS Notice 2018-76 states that "taxpayers may continue to deduct 50 percent of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact."
Entertainment, amusement, and recreation expenses (not meals, think hockey games) remain unallowable deductions. However, the affirmation that client business meals remain deductible is a relief for many small business owners. Feel free to contact us if you have questions on this guidance.
What the impact to your bottom line? Assume $5,000 of client meals for the year and an average 40% tax burden, and you'll save $1,000 in taxes.
The IRS's clarified position can be found on their site here.
Most business owners want to grow their companies. And one surefire sign of growth is when ownership believes the company can expand its operations to a second location.
If your business has reached this point, or is nearing it, both congratulations and caution are in order. You’ve clearly done a great job with growth, but that doesn’t necessarily mean you’re ready to expand. We recently added another location and hope that you can learn from our experience. Here are a few points for you to keep in mind.
October marks Women’s Small Business Month, and we are happy and proud to recognize women in business both locally and around the world. Successful business women of the past and present continue to forge new paths for female entrepreneurs. We celebrate all those who are breaking the glass ceiling and serving as role models and mentors to women everywhere.
To support Women’s Small Business Month, we wanted to share a few statistics to spotlight the powerful impact women have had and continue to have on the American economy. Women solely own 36 percent of small businesses in the United States, employ 9 million people, and generate $1.7 trillion in sales. Additionally, 2.5 million businesses in the United States are owned equally by women and men. These dually owned companies contribute $2.5 trillion to America’s economy, provide $189 billion in payroll, and employ 6.5 million people.
Our firm effusively congratulates each and every woman in business! Please feel free to reach out to our firm at any time for support and advisory services as needed. Our goal is that you continue to succeed.
NEW BLOOMFIELD OFFICE
Robert W. Morris & Company, PC
19 E Main St, PO Box 68
New Bloomfield, PA 17068
Hours: M - F 8:00 am - 5:00 pm
WEST SHORE OFFICE
Robert W. Morris & Company, PC
510 N Front St
Wormleysburg, PA 17043
Hours: M - F 9:00 am - 4:30 pm