Meals and entertainment gives us a great opportunity to save taxes but also is an area that we see many mistakes.
The first problem is that many salons do not deduct all of the meals and entertainment that they have coming to them. There are many opportunities that are overlooked. Think about situations with:
- Meals with customers
- Meals with staff
- Meals with stockholders
- Meals with DSC's
- Drinks and expensive meals with your accountant
- Entertainment with any of the above.
The second problem is that many salons deduct meals and entertainment but they don't "audit proof" their deduction with good records. Check out our website for a good summary of the rules: Make the Most of Business Meals/Entertainment. Let me know if you have any questions.
Larry Kopsa CPA
