PDA

View Full Version : meals and entertainment



huggytree
09-26-2012, 10:02 PM
i take customers out for meals all the time and pay w/ the business credit card....im even on a trap shooting team with customers and the business pays for it all

now a new thing just came up....one of my wholesalers and Kohler are sponsoring an expo at a family resort/water park...fantastic rooms are only $112 per night and water park passes are free....meals are even free....for $224 i get a fun weekend and maybe ill visit Kohler and see how they make toilets.....and its all paid for by my business ($224 is the cost whether i go alone or bring the family)

am i correct?

i always hear about people taking trips to Florida and taking a 1/2 day class or business meeting and then deducting the whole trip as a business expense....id never consider going that far, but this weekend getaway sounds like its tax man legit

nealrm
09-26-2012, 11:14 PM
per the IRS site

You can deduct all of your travel expenses if your trip was entirely business related. If your trip was primarily for business and, while at your business destination, you extended your stay for a vacation, made a personal side trip, or had other personal activities, you can deduct only your business-related travel expenses. These expenses include the travel costs of getting to and from your business destination and any business-related expenses at your business destination.

A bona fide business purpose exists if you can prove a real business purpose for the individual's presence. Incidental services, such as typing notes or assisting in entertaining customers, are not enough to make the expenses deductible.

So you might be able to pro-rate some of the expenses for you, but not for your family. However, it still sounds like a good deal.

Steve B
09-27-2012, 07:48 AM
We did this kind of thing all the time in the corporate world. The fact that it doesn't cost any extra for the family would mean you would deduct the whole thing. I guess the concept is that we were building business relationships. Any extra expenses for the family like souvenirs or any other extras, of course, would not be covered.

Evan
09-27-2012, 08:09 PM
now a new thing just came up....one of my wholesalers and Kohler are sponsoring an expo at a family resort/water park...fantastic rooms are only $112 per night and water park passes are free....meals are even free....for $224 i get a fun weekend and maybe ill visit Kohler and see how they make toilets.....and its all paid for by my business ($224 is the cost whether i go alone or bring the family)

am i correct?

Yes. But if the room rate jumped from $112 to $150 because you had additional family, then presumably that difference would be personal. Though if the business is sponsoring an expo at the water park, presumably you're there for business as well. You should certainly document what the nature of the expo was and what you were there for. Again, if you were audited and they suspected you just went to a waterpark with the family, you're the one that needs to show that it was for a business purpose. Therefore, showing that you were there for business would be a good idea.

huggytree
09-27-2012, 10:08 PM
its the same price for me alone or if i bring the family....its even got a magic show after dinner for entertainment...the rooms have a fort inside the room w/bunk beds....they have 'make your own snowman' workshops....camp fires w/smores .......oh yea and a class or 2 for me to take to make it a business trip...my plan is to skip the classes and take a Kohler tour...ill most likely look through the expo and check out the new products

nealrm
09-27-2012, 11:28 PM
Does sound like a very good deal, I would defiantly do it. The tax write-off is not going to amount to much. $224 for the ticket, plus your transportation cost (everything else appears to be paid for). So total cost of around $600 dollars if you fly, less if you drive. That will reduce your total taxes by under $200. Fines with the IRS start around $100 and go up quickly.

huggytree
09-29-2012, 11:39 AM
its a 1 hour drive away.....and i didnt even think about including mileage ...thanks!

Wozcreative
09-29-2012, 03:28 PM
There is usually a limit to this based on how much you make. You will need to keep track of this and write down names, phone numbers and what you guys talked about incase you get questioned about it. This can happen if you go overboard and claim too much for food/entertainment.