| One of the keys to bringing your tax strategy full circle | | | | ____ Code your travel expenses that are not meals |
| is your bookkeeping. It's one thing to know what's | | | | and entertainment expenses to a separate travel |
| deductible and how to maximize your business | | | | account. Too many times I have seen an account |
| deductions, but unless that gets reflected in your | | | | named "Travel, meals and entertainment" (it happens |
| bookkeeping, it's as if the tax planning never happened | | | | to be a default account in a popular bookkeeping |
| at all. Use this checklist! | | | | software) and everything gets lumped into this |
| Use this checklist to make sure your bookkeeping is | | | | account. Business travel is 100% deductible so |
| maximizing your travel, meals and entertainment | | | | separate it out as part of your bookkeeping system. |
| deductions. | | | | Otherwise, you will have to sort through that account |
| ____ Get reimbursed for business expenses you pay | | | | at the end of the year, or worse, you may forget to |
| for personally. Ever been to a restaurant that only | | | | sort through that account and everything in the |
| takes cash? Or taken a taxi that only accepts cash? | | | | account is treated as only 50% deductible! |
| Or misplaced your business credit card and had to use | | | | ____ Use the memo section in your bookkeeping |
| your personal credit card? These are just a few | | | | software to make notes about who, what, when, |
| examples of when we have to pay our business | | | | where, how much and the business purpose of your |
| expenses with personal funds. It's easy to miss these | | | | travel, meals and entertainment expenses. This is a |
| expenses so keep an envelope handy and put all of | | | | great way to strengthen your documentation. |
| your receipts in this envelope. Then you've got it handy | | | | How does your bookkeeping match up? |
| when you complete your expense report. | | | | Proper bookkeeping will boost your tax deductions, |
| ____ Code meals that are 50% deductible to a | | | | particularly for travel, meals and entertainment. This is |
| separate account to keep them distinct from other | | | | an area where deductions are regularly missed and |
| expenses that are not subject to this 50% rule. Many | | | | not properly documented, but once you know the rules |
| times I see just one meal account in the chart of | | | | and use my system, you'll find more and more |
| accounts. The problem with this is that while meals are | | | | deductions! |
| generally only 50% deductible, some meals are 100% | | | | ** Important Tip! ** |
| deductible. The mistake that I see most often when I | | | | Keep your bookkeeping current! What does current |
| review a prospect's prior year tax return, is all meals | | | | mean? One easy way to make sure you are staying |
| are treated as only 50% deductible (because they are | | | | current is to review your Balance Sheet and Profit |
| all coded to one account) and there is no strategy to | | | | & Loss Statements once a month. Do this review |
| identify meals that are 100% deductible. | | | | when you receive your monthly bank statement. |
| ____ Code meals that are 100% deductible to a | | | | Simply reconcile your bank statement and then review |
| separate account to make sure these are deducted in | | | | your financial statements. |
| full and not combined with meals that are only 50% | | | | Knowing how to maximize your deductions for travel, |
| deductible. | | | | meals and entertainment is a key part of a successful |
| ____ Code your entertainment expenses to a | | | | tax strategy. |
| separate account from meals and travel. | | | | |