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Denver Business Tax Preparation Meal Expenditure Requirements

February 21, 2018

Depending on your status and the impending circumstances some meals are deductible when compiling your tax return. While the details vary significantly and can be difficult to cycle through, there are essentially three main categories for deduction purposes.

First, employees cannot deduct their expenditures if they are being reimbursed for them through their employer. Only non-reimbursed expenses may be accounted for and even then only a limited amount is deductible.

The three main areas for potential deductions involve each of the following concepts: meals while traveling, meals for business purposes, and special events.

Meals While Traveling

When you are required to spend the night away from your home area or office then meals can be deducted but only at a 50-percent rate. The specifics involved are detailed and described by the Internal Revenue Service (IRS) through Publication 463 but essentially if an overnight or multiple nights stay is required then half of all meals are deductible. This includes food, drink, and any gratuity added to the final bill.

Meals For Business Purposes

Sometimes employees, owners, and corporations will use meals as a method of conducting business with potential clients or for specific business propositions. When these occur, then the same rate of 50-percent from the total bill may also be deducted. While still qualifying as a potential business meal while traveling, if applicable, these type deductions require more than one individual and some type of business related activity occurring either just prior, during, or following the conclusion of the meal in question.

Special Events

Meals conducted for the purposes of training or special events like holiday parties are 100-percent deductible. These are corporate functions and can either be open to the general public for purposes of conjuring up more business or even limited to employees with their spouses. At times, even the occasional break room coffee and donuts will apply.

The most important aspect of any deduction is keeping a good track record of the anticipated meal expenses. There are a few general rules to consider as the IRS will not allow “extravagant” deductions and could also view an extremely high bar tab as an environment not conducive to business related activities. For these reasons, keeping the drinks to a minimum and always documenting who was present, the business discussed, and any results, if applicable, is vitally important.

The experts at Bloch, Rothman, and Associates can help you examine records and determine which meals are applicable and what records will be necessary in order to claim them. In addition to providing expert tax advice, we can also assist with a variety of bookkeeping and other payroll options. These associates at Bloch-Rothman are happy to help view specific data as every tax situation is unique, along with finding resolutions for your issues and estate complications making certain you receive the most profitable deductions on your return. All services can and will be completed in a timely manner. Whether you need an explanation for an acquired tax form, are in need of representation, or would like help with a variety of other services then our tax experts are ready and willing to assist. Call 303-321-7160 or contact us for your initial free no obligation consultation.