Meals & Travel TAX Deductions (bookkeeper's guide)
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- เผยแพร่เมื่อ 23 ส.ค. 2024
- Meals and travel tax deductions: a bookkeeper's guide. If you have a bookkeeping business (or any small business), you may have found these tax deductions confusing. In this video I talk about 50% and 100% meal tax deductions for business, how to use your own car and deduct a percentage (or you can use the standard milage deduction), and also the ins-and-outs of deducting business trips.
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What other questions do you have about tax deductions?
Plz prep vedio on PTET credit ded. In Ind. Return
I so appreciate your channel! I’ve been binging it getting my bookkeeping biz up and running
Thanks for watching!
Krista (FinePoints Admin)
Great video. Thank you
Thank you for sharing, this was a great way to start the day.
You are so welcome!
Can you discuss how to work on reimbursements in QB?
Hi Jennifer! I will let Morgan know this is a topic you are interested in getting more information on. Thank you!
Krista (FinePoints Admin)
For the meal expenses, are you calculating the 50% meals based on the receipt and entering that amount in QBO?
You put the whole amount in QBO and the tax preparer is the one who enters it as 50% (outside of QB). Good question.
@@FinePointsBookkeeping Great to know! Thank you 😊
@@FinePointsBookkeepingdoesn’t this affect the P&L? We were told to code 50% to the expense and 50% as a draw to offset the fact that it was a cash flow loss that doesn’t match the P&L due to deductability. What do you think?
@eastwoodisme this is my question
Love the topic! This helps me a lot
Glad it was helpful!
If the client is tracking either actual expenses or mileage, is there a JE we need to enter at year end for the deduction they get on their tax return? Is recording actual expenses or mileage not necessary?
Hey! Morgan recommends talking to your client's tax preparer to find out how they want you record the deductions.
Krista (FinePoints Admin)
I have a trip to Dubai next month. Im supposed to meet up with a manager of a potential client. How can i record proof of the meetings to support the trip as a write-off?
I am currently working as a bookkeeper in my country and know a little about the tax laws, and now i want to work as a freelance bookkeeper on fiverr, upwork etc, but dont know how much and what kind of tax laws should i have to learn, somebody please help.
How do you reimburse employees for business expenses they paid?
Good question. Usually the employee would fill out some kind of reimbursement form (or log) and attach a receipt. Then, the business can write them a paper check or (in my experience, ie in Gusto) there is usually a "reimbursement" area in a payroll company--so it would be direct deposited with their paycheck.
@@FinePointsBookkeeping OK, I would like to see a video how you deal with it in quick books how you record it because I also want to bring in the expense.
Yes!! I’m needing this help too!
If you’re booking travel for a conference in January, which year are you filing that under? Because the money is paid in one year and the event will be in the next year.
Hey! That’s a great question! Morgan always categorizes the transaction in the year that the money is spent. So in this case, you would file it under the month that you purchased the tickets to travel.
Krista (FinePoints Admin)
Thank you for the info! I have a question if you don't mind. Can I write a bookkeeping course off as an education expense? If I were to do so should the course be purchased after I create my llc for my bookkeeping business just so I can buy it with my business bank account or it doesn't matter? I will appreciate any light on this matter.
Yes! That's a biz expense. If you buy it with personal $$ you can do a journal entry after you get your bank/books set up. What class are you thinking of taking?
Here's a video on start up costs: th-cam.com/video/01o_6OUHB54/w-d-xo.html
Thank you very much for your insight. I'm still shopping around for courses but I do Like the "60 day bookkeeper" course because everything comes with the course and there are no upsells. @@FinePointsBookkeeping
What about if I buy snacks during while traveling? Can those be expensed? Also, are all of their meals while traveling deductible or just those while we talk business? Thanks for clarifying.
Hi Gretell. While on a business trip, any meals that need to be paid for can be expensed. Not just the ones where you are out with clients.
Krista (FinePoints Admin)
How do you do that?
@@FinePointsBookkeepingand snacks on travel are 50%?
If I’m traveling for work, can I deduct my on road food expenses??
Yep, there's different ways to do it that I go over in the video.
All meals are 100% for the year. For temporary relief.
Yay! Thanks for clarifying. This is a nice temporary change.
Only from restaurants…not coffee bar, etc…
Morgan how soon do you think bookkeepers be out of a job due to AI?
Morgan does not believe a career in bookkeeping is coming to an end, and she believes that it is here for the long run. The first thing business owners want to take off their plate in most cases is organizing their finances and books. There are some great automated options coming out, but even with those, business owners like the comfort of knowing their books are being done well, and they don't have to be hands-on with them. So, yes, Morgan does think a bookkeeping business is still a sustainable long-term career.
Krista (FinePoints Admin)
lee's discount liquor , is this 100 %?
Ha, it may depend on the policies of the business
so if a meals is 50% deductible. where does the other 50% go?
Expenses are good because they reduce your income (so you don't have to pay as much in taxes). So, if a meal cost $100 ... only $50 goes to REDUCE your income. But, you still need to pay $100 for the food.